New rate structure will go into effect Wednesday for many MiEnergy customers

A new electric rate structure will go into effect for many MiEnergy customers on July 1st.

The cooperative says the rate changes will result in no increase in operating revenues to MiEnergy.  The changes are being made (and have been approved by State of Minnesota regulators) as part of a two-year transition towards a system in which fixed costs for electric distribution are all paid through MiEnergy's basic service charge and not through its kilowatt-per-hour charges.

A newsletter from the utility says, "the new rate structure is not a rate increase...the average member will not see a change in their electric costs. However, like all averages, some members will see a decrease and others will see an increase, depending upon their energy use."  All city and suburban rate customers will see an energy rate decrease, due to their current basic service charge fully recovering the fixed costs.  Rural residential customers wiill see a $7.50 a month increase in the basic service charge, although they will pay a lower kWh charge.

The change in rate structure is due to energy use continuing to decline, according to MiEnergy.  More energy efficient lighting, appliances and products, in addition to more members investing in their own distributed generation systems like solar panels, are the primary reasons for declining energy use.

Says the newsletter, "Greater efficiency has been promoted and incentivized by the cooperative for decades. We also support distributed energy and members investing in solar at their homes, farms and businesses. These are practices we will continue to support. Our challenge has been the method of recovering operating costs as a markup on the kWh charge instead of the basic service charge. This is not unique to our cooperative and has been a practice among utilities for decades. Our new rate transition will move away from recovering our fixed costs in the kWh rate, making a fairer recovery of operation costs for all members. In turn, members, categorized by rate class, will pay the same for receiving electric service. A member generating their own energy will pay the same basic service charge as the member that purchases all their energy from the cooperative."