Electric Rate Changes Take Effect July 1
Plumas-Sierra Rural Electric Cooperative is instituting a two-part rate increase effective July 1. PSREC does not take this rate increase lightly and has done everything possible to minimize its impact on you, the member-owners. However, to continue providing reliable, high-quality service, PSREC must implement this two-part rate increase to the fixed fees for each rate class.
The first increase takes effect July 1, and is an additional $4.32 per month for residential members; $8.05 per month for single-phase commercial members; and $11.20 per month for three-phase commercial members.
The second increase takes effect January 1, 2020, and will be an additional $2.67 per month for residential members; $4.95 per month for single-phase commercial members; and $6.85 per month for three-phase commercial members.
Our other rate classes have been notified directly of the structure of their increase.
Each year, PSREC staff members and board of directors assess many factors while reviewing the cooperative’s financial position and future direction. During this evaluation of 2019 and 2020, it became clear there was need for a rate increase. After member meetings, your board of directors approved the rate increase.
When considering a rate change, the board and staff look at both the facilities fee and the use charge. Currently, less than 20 percent of PSREC’s fixed costs are collected through the facilities charge. However, up to 70% of the cooperative’s overall costs are fixed. For this reason, it made the most sense to increase the facilities charge and not the kilowatthour charge.
On average, PSREC purchases 40% of its power from federal hydro projects. The cost of this carbon-free power has increased significantly over the past three years. California legislation has directed the cooperative to increase wildfire mitigation efforts, while also increasing burdensome planning requirements that include contracting with consultants and increased staff time. Our cost of maintaining our insurance policy has also increased due
to the catastrophic wildfires that swept through California last year.
Safety, reliability and affordability remain the main focus of your board and staff at PSREC. We are a not-for-profit, member-owned cooperative and strive every day to hold down costs while still providing the reliable, quality service you expect.
PSREC provides energy conservation and low-income programs. Information about our conservation and efficiency programs can be found on our website, or by calling us at (530) 832-4621. PSREC’s Winter Rate Assistance Program offers a discounted rate for the kilowatt-hour charge during the winter heating season, November-April. Program eligibility is based on family income. More detailed information about the WRAP program and our rate schedules is available at www.psrec.coop.
A Simple Look at Fixed Costs and use Costs and How They Impact Us
Fixed Cost Analogy…
Substations, trucks, poles, wires, transformers, meters, etc. (the co-op’s property) and personnel are referred to as “plant.” The co-op finances its plant over 15 to 25 years and must make monthly payments whether or not a single kilowatthour is sold. These are “fixed costs.”
Generally, vehicles (your property, or “plant”) are financed over extended periods of time like the co-op’s plant. Monthly payments must be made to the lending institution whether or not the car is driven a single mile. Your monthly car payment is a “fixed cost,” just like the co-op’s fixed costs.
Then There’s The Use Costs…
The basic charge pays for the co-op’s infrastructure (fixed costs) so you can have electricity at your home 24/7, whether you use any or not. Your appliances then use energy (kilowatt-hours) that are delivered to your home over the electric system. You are charged for the kWhs your appliances use and will see this charge on your electric bill.
Similarly, your car payment provides you with a vehicle (infrastructure) so you can come and go 24/7, if you choose. When you elect to use your car, the other costs begin to mount, adding to your total car expenses for the month. Simply put, the more you drive, the higher your monthly car expense—just like your electric bill. It’s the same principle.