YVEA’s rate increase goes into effect March 1, will show up on April bills
Yampa Valley Electric Association’s planned increase in energy rates will go into effect next week and will show up on member’s April bills.
The rate increase — announced in December — will add about $14 to the bill for a small general service customer that uses 874 kilowatts a month and about $36 for a medium general service customer that uses 2,470 kilowatts a month. The new rates officially start on March 1.
“Xcel Energy is raising our wholesale power supply rate by 14% in 2023,” the co-op wrote when announcing the increase. “Wholesale power costs comprise almost two-thirds of all YVEA expenses, so this increase (from Xcel) significantly impacts YVEA’s rates.”
The rate increase follows a Cost of Service Study the co-op performed last year. In addition to the increase in raw power costs, the rate hike is also due to a general rising cost of doing business and maintaining and investing in infrastructure.
This is the second rate increase for YVEA members in the last year, with a slightly smaller increase going into effect in June 2022. Prior to that increase, the co-op said Xcel had been raising wholesale power costs by 8% year over year.
The increase will impact small, medium and large general service members as well as irrigation, outdoor area lighting and street lighting customers.
The cost to access the system is also increasing for small and medium general service as well as for irrigators. The cost to access for small general service is increasing by $5.75, and medium general service by $11.50. The irrigator access rate goes up by $100.
System access costs cover the cost of the meter, wire and other equipment used to deliver electricity and are the same each month regardless of the amount of power a member uses each month.
Prior to raising rates, the co-op worked to cut its own budget by about 15%, a significant factor in why YVEA’s rebate program was pared back this year.
“These budget cuts enabled us to lessen the impact of the passthrough costs of Xcel’s rate hike on our members,” YVEA wrote on its website. “While Xcel raised our rates 14%, thanks to the reduction of our proposed 2023 budgets, we have not needed to raise our rates to match that 14%.”
For small service, the increase amounts to a 9% jump in power costs, which is the largest increase for each level of general service. That is much lower than the roughly 50% increase members saw on bills earlier this year, as Xcel added a surcharge due to higher than expected natural gas prices.
That surcharge, referred to as a power cost adjustment, added about 5 cents per kilowatt-hour to member’s January bills, the largest that charge had ever been. On bills members will receive this month, the charge will be 0.3 cents per kilowatt-hour.
The upcoming increase amounts to less than one cent more per kilowatt-hour for all general service customers.
Despite the increase, YVEA says the cost of power for members is still among the lowest in the region, with most residential electricity costs around Colorado ranging from 11.5 to 15 cents, per kilowatt-hour. The co-op is expecting another rate increase will be needed in 2024.
In an effort to give members more stability in energy costs, YVEA CEO Steve Johnson said in June that the co-op was evaluating proposals from other wholesale power suppliers. YVEA’s contract with Xcel Energy, which supplies more than 95% of the co-op’s power, requires five year’s notice to break, so the earliest a change could happen is likely in 2028.
To reach Dylan Anderson, call 970-871-4247 or email danderson@SteamboatPilot.com.
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