2023 Rate Increase

The rate increase is divided into three parts.

1. Rising costs – The cost of doing business has dramatically increased since 2019. The ongoing pandemic, supply chain issues, and conflict overseas has all contributed to prices skyrocketing. We must increase rates to recover these costs. While we have held rates for 3 years through these difficult times, costs need to be recovered.
2. Power cost adjustment (PCA) being rolled into access charge – Members have already been paying this, it is now just formally a part of the access charge. We will still use the PCA (if necessary) for extreme market fluctuations that GRE passes on to us, or in the case of an overcollection where we pass a credit back to you.
3. New operations center – The MLEC board has decided to move forward with building a new facility. When faced with the decision of spending millions of dollars to renovate our current facility or build new, the board decided that the longevity of a new facility will serve MLEC best.

The final decision is made by the Board of Directors who have been voted in by the cooperative’s members. Cooperatives are member organizations, unlike most other businesses. This places a unique responsibility on cooperative directors to be sensitive to the needs of members and balance all members’ interests. Therefore, director decisions are not based on profit or personal interests, but on what the needs of the members are, while keeping the cooperative financially sound. All money received from members goes back into the cooperative, paying for our purchased power and funding improvements and maintenance to our infrastructure. And remember, when we have excess margins, those are returned back to members in the form of capital credits, just like you have seen the past 3 years.

When we completed our 10-year financial forecast, we had no way of knowing that the economy would take the dramatic shift it has. Volatility in the energy market, supply chain issues, and crippling cost increases for essential products are what MLEC and the rest of the world are facing. We are also seeing an increase from our wholesale power provider, Great River Energy. To keep our cooperative financially healthy and recover necessary costs, we must increase rates.

2019 – Access charge raised from $30 to $33. Plus additional $3 per load management meter

2017 – Access charge raised from $25 to $30. Plus additional 3% on all rates

The rate change is effective April 1, 2023. You will see the increase on your May bill.

2022

Access Charge                                                                                                   $ 33.00

kWh rates average (residential customer usage 10.32 cents x 1,000)              $ 103.20

Tax                                                                                                                     $ 9.36

Total                                                                                                                   $145.56*

2023

Access Charge                                                                                                   $ 49.00

kWh rates average (residential customer usage 10.32 cents x 1,000)              $ 103.20

Tax                                                                                                                     $ 9.36

Total                                                                                                                   $161.56*

(*plus or minus power cost adjustment/local taxes may apply)

The access charge is designed to cover each member’s share of the cost of maintenance for wires, transformers, meters, right-of-way clearing, and other expenses on the distribution system associated with access to the electrical grid and providing service. Members have the benefit of reliable electric service being available when they want it, and the access charge ensures everyone pays their fair share of the fixed costs. Some of our members are large electricity consumers, and some of our members use very little electricity. Regardless of the time spent at these properties, or the amount of power these members consume, the cost of getting and maintaining power to their locations remains the same.

Many of our neighboring cooperatives have similar access charges or are in the process of increasing their rates as they are dealing with the same obstacles as MLEC.

As a member-owned cooperative, the access charge increase is not designed to make a profit, but cover costs. If we make any extra, it is payed back to our membership in the form of capital credits.

The Energy Charge is designed to cover the cost of wholesale power and delivery to get the kilowatt-hours to your meter.

Seasonal Impact – MLEC has a three season rate structure (winter, summer and spring/fall) to match our wholesale power billing and when you use the energy. Power is the most expensive during the summer months of June –August. Winter power costs are lower than the summer months but higher than spring and fall. The seasonal rates send the clearest price signal by reflecting these differences.

The difference between our actual cost per kilowatt-hour and the wholesale power cost at the time rates were established. When our actual cost of power is higher, there is a PCA charge; and when our actual cost of power is lower, there is a PCA credit on bills.

It doesn’t. MLEC Fiber is a separate project. It is managed independently from the electric distribution system.

MLEC has only seven members per mile of line, where in a metro area there may be up to 40. All costs to maintain lines are divided to the number of members. Fewer members per mile of line means costs per member is higher. MLEC’s electric rates are very comparable to cooperatives with a similar member makeup.

It will cost even more if you disconnect for less than one year, then reconnect. There is still a cost to maintain the infrastructure to all accounts connected or not. If disconnecting an account, you will be charged a $150 reconnection fee, plus $49 a month for each month disconnected to cover that cost. In short, the access fee is insurance that your power will always be available when you need it. (Includes main and load management meters)

Load Management Rate programs - such as off peak and dual fuel, designed to reflect the savings that result from the ability to control these loads during periods of high energy demand. Even with increased rates for these programs to cover wholesale power cost increases, they remain very competitive with other energy costs. 

Electric Energy Use Assessment - equipment available to monitor usage on 120-volt appliances and equipment. Energy Advisors are available to answer questions and will visit your home or business to help you identify ways to reduce your energy costs, and perform a Heat Loss Analysis. They will use an infrared camera to highlight trouble spots to help you identify where home improvements could save you energy – thus money.