Arrowhead Cooperative members will notice their monthly service charge has been raised from $47 per month to $49…a 4.26 percent increase for 2020. This fixed charge is billed on top of actual power usage. The $49 charge is subject to a state and county sales tax total of $4.10. This results in a payment of $53.10 per month ($637.20 per year) before you even flip a switch. Since January 2003, the Arrowhead board has increased its monthly service charge by one hundred and forty-five percent. A particularly insidious burden for seniors on a fixed income.
The service charge is assessed on a per meter basis, so it is particularly beneficial to high volume kilowatt hour (kWh) users. For example…let’s say your month’s billing for kWh used is about equal to the fixed monthly service charge. When these two items are combined, your actual ‘out-of-pocket’ cost per kWh is, in reality, doubled. Any additional kWh usage, when averaged in a similar manner, will result in a reduced ‘out-of-pocket’ cost per kWh. The more kWh used, the greater the averaged cost per kWh.
Rather than raising the kWh charge to encourage energy conservation, Arrowhead instead uses its monthly service charge to cover operating costs. Arrowhead Cooperative currently has about 5,000 electric customers. The monthly service charges collected in 2020 will be $245,000 per month, a total of $2,940,000 for the year. The monthly service charge will also incur approximately $246,000 in state ($202,000) and county sales tax ($44,000) on its members.
The rising cost of electricity from Arrowhead Cooperative will certainly incentivize prospective customers to instead purchase, increasingly affordable, stand alone solar installations. As a result, future costs for remaining Arrowhead Cooperative members will go up accordingly. Increased service charges levied by the board to fund operations will make becoming an Arrowhead Cooperative owner-member a much less enticing proposition.
One national credit card company asks, “What’s in your wallet?” More to the point for Arrowhead members is, “What’s left in your wallet?”
Bob LaMettry, Grand
Marais
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