Power Costs, Maintaining and Investing in Our Infrastructure, and Increased Cost of Doing Business Drive 4.1.24 Rate Adjustment
One of the responsibilities of operating an electric system is to provide safe, affordable, and reliable service at a reasonable rate. While it is never favorable to raise rates, YVEA’s Board of Directors voted to increase rates based on several factors – power supply rate increases, maintaining and investing in our infrastructure, and the cost of doing business. They made this decision based on YVEA’s goal to operate a safe and reliable electric system.
As virtually all aspects of today’s cost of living continue to rise, YVEA has done its best to avoid the cost of service adjustments. Over this same period, we have experienced steep increases in our cost to do business (materials, labor, etc.) Therefore, our Board of Directors has approved a rate change to remain fiscally healthy and ensure fairness across rate classes.
This rate change will take place starting on April 1st, 2024 electricity usage.
2024 Rate Adjustment FAQs
*Other rate classes that are changing are Large General Service Demand, Primary Transmission, EV Charging, and Street Lighting have changed, in addition to these rates. Please visit the 2024 Redline Rate Sheets page for more details.
These new rates go into effect on April 1st, 2024. Starting on April 1st, your energy usage will be billed at this new rate.
In 2023, YVEA performed a Cost of Service Study (COSS), which showed us whether each customer class (residential, commercial, and industrial, for example) are adequately covering the costs of service, fuel, labor, equipment, etc. to serve those members. Based on the study and the 2024 rates from our power suppliers, 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: Xcel Energy has been raising their wholesale energy rates and transmission costs, and according to our COSS study, we needed to raise our rates in order to help cover energy costs. Wholesale power costs comprise almost two-thirds of all YVEA expenses, so any increase significantly impacts YVEA’s rates.
- 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 see less precipitation, we need to make sure our system helps aid in the prevention of wildfires. This includes tree trimming projects, installing more electronic reclosures, and upgrading our system so we can switch to Fire Protection Mode as quickly as needed.
- Investing in a responsive grid – We are continually upgrading our system to decrease outages’ 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.
- The Rising Cost of Doing Business: Just like our members, we are seeing increased costs affecting how we operate, and our dollar is not going as far as it once was. For us to continue to successfully run YVEA and deliver safe, reliable, and affordable power, we need to take these costs into account when budgeting for materials purchased, maintaining our fleet, hiring and retaining skilled staff who can help us maintain and support our infrastructure, and the increased cost of living, to name a few of the factors that make up the rising costs of doing business.
YVEA last raised rates in March 2023.
As a not-for-profit co-op, we give our profits back to our members, which happens in the form of Capital Credits. Our profit margins are not going towards bonuses or dividends to shareholders – it goes back to our members, the ratepayers.
For Irrigation, yes. Please see the rate charts above for the specific System Access Costs.
The System Access Cost is a fixed monthly charge that recovers some of the fixed costs that come directly from serving an individual member, regardless of how much electricity is used. These costs include the cost of the meter, wire, and other equipment used to deliver electricity to the home or business, as well as billing expenses, such as meter reading, bill preparation, and postage. Even if you do not use any power from us, there is still a cost to operating and maintaining the grid that serves you. The system access cost covers these costs.
In 2023, YVEA began to search for a new power supplier, with the goal of bringing rate stability to our members while still providing safe and reliable power to your home and business. Our decision to transition to Guzman Energy to provide wholesale power was guided by the “Four Rs” – Rates, Reliability, Renewables and Relationships. We have listened to you, our members, and this agreement will ensure that we deliver reliable and affordable electricity that incorporates more renewable sources and helps us stabilize rates. While this is exciting news, there will be a lengthy transition period of approximately five years before we officially convert from our current wholesale provider Xcel Energy. We did not make this decision lightly. We invested thousands of hours evaluating and modeling this transition and concluded that this is the right decision to serve YVEA members and create a reliable energy future.
We cannot control the costs Xcel passes on to us, their business decisions, or any other factors that come from power supplier rate increases. The vulnerability this creates for our membership motivated us to request proposals for new power suppliers and sign a fifteen year contract with Guzman Energy.
If you visit https://www.yvea.com/energy-efficiency/residential-energy-tips/ we have tips and tricks on how members can help fight energy waste. During our colder months, we see the two biggest energy wasters: electric heat tape and space heaters. Our Energy Hero page offers advice on how best to use these two products while also helping to lower your winter bill.
There are several options. Your best one is to call our Member Services team at 970-879-1160. They can work with you on paying your bill, advise you on our Budget Billing process, or help you connect with local agencies offering assistance. The bottom line is – don’t wait to ask for help. We want to help our members, so please call us.
The YVEA Board of Directors considers necessary rate changes each year. We anticipate another rate change in mid-2025 to match the proposed rate increase from our wholesale electricity provider, Xcel Energy. Xcel Energy has indicated to us that we should anticipate rate increases for the foreseeable future. Xcel has large projects coming online in the coming years, like Colorado Pathways, which will increase their costs.