Rate adjustment effective Jan. 1; Phase 3 of Time-of-Day program implemented
The Lorain-Medina Rural Electric Cooperative Board of Trustees revised the cooperative's rate schedule at its October meeting, approving a $2 per month increase in the Basic Service Charge and increased the Time-of-Day rate spread between on-peak and off-peak rates by one-half cent per kilowatt-hour (kWh).
Effective Jan. 1, the difference between the on-peak and off-peak electric generation cost per kWh will increase from 1.5 cents to 2 cents. The difference between on-peak and off-peak stayed at 1 cent per kWh for three years until all 12,000 residential meters were converted to digital meters and automatically transmit electric-use data to the cooperative's office. In 2014, Phase 2 was implemented when the spread was widened to 1.5 cents per kWh.
With the implementation of the Time-of-Day rate, the cooperative's rates are able to better reflect the costs of purchased power from LMRE's wholesale power supplier, Buckeye Power, which are passed on to the member.
Basic Service Charge
The Basic Service Charge will increase from $24.25 to $26.25. Members pay the Basic Service Charge regardless of how much electricity is used each month. It offsets some of the fixed costs of providing electric service, such as the cost of poles, wires, transformers and other necessary equipment.
As in previous years, the average Purchased Power Adjustment for 2014 has been "rolled into" the base rates. The Purchased Power Adjustment fluctuates each month with the cost of power.
The average electric bill for residential members who consume 1,200 kWh a month will increase a little over $2 per month.
The increase in the Monthly Service Charge allows the cooperative to keep pace with ongoing maintenance and replacements to its 1,530 miles of distribution lines. Lorain-Medina spends an average of $2 million annually replacing aging lines and other equipment associated with delivering electricity to its members.
"Rates are gradually increasing because it costs more today to replace aging older equipment. Our statistics continue to be well below the national average because of our maintenance efforts," said General Manager Markus Bryant. "Preventive maintenance is the cheapest and best form of maintenance. We believe our members value system reliability"
What is the difference between on-peak and off-peak hours?
On-peak refers to times when electricity demand is the highest and, therefore, most expensive. Off-peak hours are during times of lower consumption, which is less expensive.
How does the Time-of-Day work?
The cooperative will gradually adjust the rates to what the actual difference is between the off-peak and on-peak kWh cost from LMREs wholesale power supplier, Buckeye Power. As the off-peak rate is adjusted down, proportionately, the on-peak rate will go up. Eventually, the difference will be between 3 and 4 cents per kWh.
How can the Time-of-Day rate benefit members?
By shifting some of their electric use to off-peak periods and paying the lower kWh rate, members have the opportunity to save money on their electric bill.