Fall River Rural Electric Cooperative is bringing some good news to nearly all FRE member-owners as Teton Valley settles in for another long winter.
In a meeting on Oct. 14 at the Driggs Fall River office, FRE General Manager and CEO Brian Case announced electric rate decreases that will come into effect beginning January 2022.
Fall River hasn’t raised rates since 2014, seven years ago.
The decreases come as a result of a rework of FRE’s rate-setting methods, enabled by advancements in infrastructure and technology.
Under the current rate structure, members are charged via a combination of a recurring access charge and a kilowatt-hour (kWh) charge which varies with energy use.
Under the new structure, a demand component will be added to the above considerations, which will reward energy-saving behaviors. Demand is the measurement of how much power you are using at any given time.
For example, if you are running a washer/dryer while cooking with an oven and electric range, your demand will be higher than running the appliances at separate times.
“Why add demand?” said Case. “Demand adds a fairness to our members. The reason it’s a little more fair is because we do have a lot of seasonal homes, cabin owners that come out for a weekend or two. For our (current) rate structures, collecting a lot of that money from kWh, they’re not really contributing to the base cost.”
Due to technology and metering advancements, FRE is now able to ascertain the demand measurements, in addition to the amount of the actual power, and bill on that. This enabled a rework of how rates are calculated.
“It’s always been easier to bundle them all together, but with technological advancements, we’ve been able to easily and efficiently collect that information so we can understand it and can bill on it,” said Case.
Another development that enabled a rate decrease is that FRE and other public power organizations recently petitioned the Bonneville Power Association to decrease power costs by 2.1%.
Of the power that FRE purchases off the wholesale market, 95% is bought through the BPA.
To illustrate how much savings members will see, FRE ran hypothetical billing through four types of members based on observed billing costs.
For a “high energy” user, the current rate structure produces a charge of $306.97. With the current rate structure plus demand monitored/billed separately and the 2.1% decrease, it will equate to $291.68, a savings of 5.24%.
An “average” user will see a current rate structure charge of $120.89 decrease by 2.73% to $117.68 with the 2.1% power cost decrease and demand charged separately.
A low energy user with a current rate structure charge of $79.27 will see the charge shrink to $75.16, a 5.46% decrease after the 2.1% power cost decrease and demand component are calculated.
The only group of members that will see an increase on their bill is low-energy high-demand users. These are typically second or vacation homeowners that use relatively low amounts of power over a billing cycle but require high demand when they are at the home.
These low energy/high demand members have a bill of $74.33. Once the 2.1% power cost decrease and demand component are added they will see an increase of 8.06% bringing a typical charge up to $80.85.
“90% of us are going to see a rate decrease, it varies on your energy consumption, but the individuals who will see an increase in this scenario have high demand and low kilowatt-hour usage,” said Case. “We try and set rates that are fair and equitable, we want to make sure they are understandable, that are stable.”
For those that would like to see a PowerPoint presentation on the rate decreases or would like more information, contact Fall River and they will be happy to answer any questions or provide resources concerning the rate decreases.