In 2025, YVEA conducted a Cost-of-Service Study (COSS) to determine whether each customer class (residential, commercial, and industrial, for example) is adequately covering the costs of service, fuel, labor, equipment, etc. to serve its members. Based on the study and the 2026 rates from our power supplier, Xcel Energy, we are raising rates to distribute costs equitably to our members. Several factors went into this decision. Here are the main drivers for the rate increase:
- Power Supply Costs: According to our COSS study, we needed to raise our rates to help cover power costs. YVEA is a distribution co-op, meaning we don’t generate our own electricity and we rely on a wholesale power provider to deliver energy to us. Wholesale power costs comprise over half of all YVEA expenses, so any increase significantly impacts YVEA’s rates.
- Transmission Costs: A portion of our wholesale power bill includes a transmission cost. This cost is related to our use of Xcel’s transmission lines to deliver electricity to the Yampa Valley. When YVEA transitions to Guzman as a power supplier in 2028, YVEA will still be accountable for paying this transmission cost. Xcel’s transmission costs include the delivery of power, upgrades to Xcel’s transmission infrastructure, wildfire mitigation, and other costs. In previous rate changes, we mentioned that Xcel has ambitious grid modernization plans and that we expect these costs to continue to increase year-over-year.
- Maintaining and Investing in Our Infrastructure, which includes:
- Construction Workplan –Every year, we invest millions of dollars back into the system, which improves our system reliability for all members.
- Wildfire Mitigation – As our summers receive less precipitation, we need to ensure our system helps aid in the prevention of wildfires. This includes tree-trimming projects, installing additional electronic reclosures, and upgrading our system so we can switch to Fire Protection Mode more efficiently.
- Investing in a responsive grid – We are continually upgrading our system to decrease the frequency, duration, and response time, and the only way to achieve this is by investing in digital technologies. We are building a smarter grid that will help to provide even greater reliability to our members.
- Aging infrastructure -YVEA makes every effort to have our equipment last as long as is practical and safe. For example, most of our distribution poles were installed between 1970-2000, and we have worked to maintain and ensure they meet our safety standards. As these poles and other equipment gets older, we will need to replace them, which contributes to our costs. Aging power lines are more prone to failures, especially during extreme weather events, leading to extended power outages.
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- The Rising Cost of Doing Business: Like our members, YVEA is experiencing higher costs across nearly every part of our operations. Our dollars do not go as far as they once did. To continue delivering safe, reliable power, we must account for increased expenses related to materials and equipment, fleet maintenance, hiring and retaining skilled employees to support our infrastructure, and the rising cost of living—among other factors that affect the cost of doing business.