Thinking that Arrowhead Electric Cooperative had held the line on rate increases for 2011 was a bit premature. Starting in February, AECI’s monthly availability fee has risen to $43.50 per month ($522/year) and per kwh rates will also increase.
Raising the per kwh rate makes good sense to cover any increase in the cost of power from AECI’s provider, Great River Energy. This increase not only keeps the AECI financially sound, but effectively encourages conservation.
Unfortunately the increase in its per kwh service rates were not applied equally to all customers. The general service rate and general
summer service rates were increased by 13.0% and 11.1% respectively. The rates for Off Peak and Dual Fuel Interruptible customers were only increased by 2.25 and 2.5% respectively. Hardly equitable cost sharing among members.
While the Off Peak and Dual Fuel Interruptible options are useful tools to reduce peak power demands, they do not promote energy conservation and may actually encourage energy consumption because these rates are so low. The general service rate and general summer service rates are now 11.3 cents per kwh and 12.7 cents per kwh respectively. The rates for Off Peak and Dual Fuel Interruptible are now 4.6 cents per kwh and 5.7 cents per kwh respectively, considerably less than half of the general service rates.
Arrowhead claims to promote energy conservation, but its monthly availability charge actually penalizes conservation by AECI members. The more you conserve, the faster the effective cost of a kwh of power rises when factoring in the availability charge.
A 1500 kwh/month user pays an effective rate of about 14 cents per kwh; 800 kwh/month yields an effective cost of 16 cents/kwh; 500 kwh/month jumps to 20 cents/kwh and 200 kwh/month costs 33 cents/kwh. That seasonal cabin owner who only uses 100 kwh/month effectively pays 55 cents/kwh.
A more equitable rate structure needs to be addressed by AECI’s management in both the monthly availability charge and its program per kwh charges.
Bob LaMettry
Grand Marais
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