REC Seeks State Corporation Commission Approval for Rate Change

May 23, 2017

REC has filed an application with the State Corporation Commission (SCC) to adjust its rates effective in early 2018.

"As a not-for-profit cooperative committed to providing reliable service at an affordable cost, we carefully considered the need for this," said Kent Farmer, president and CEO of REC. "We concluded rates must be adjusted to continue safely delivering affordable and reliable electricity to the homes and businesses we serve. To keep REC financially healthy, it is now necessary to increase rates to recover the rising costs of delivering electricity."

According to Farmer, the typical residential member using 1,000 kilowatt hours (kWh) per month will see an increase of approximately $9.60 per month under the proposed new rate structure. Even then, the bill will be $3.16 less than the rates in effect at the end of 2015.

"We realize every dollar matters to REC members," added Farmer. "That's why we're always working to reduce expenses. We have implemented new technology and are continuously looking for new ways to operate more efficiently. These proactive initiatives enable us to better serve our members and also help control costs."

Most recently, declining wholesale power expenses and proactive efforts by REC to manage its peak loads has led to a reduction in the overall cost of electricity. These changes have been reflected on all members' bills through the power cost adjustment. As a result, typical residential members pay $14 less today for electricity supply than they did in December 2015.

Farmer said, "Despite these efforts, an increase in rates is now required to maintain our high standard of 24/7 continuous service our members have come to expect and deserve."

One of the biggest steps REC took to help manage rising costs occurred in 2010, when the Cooperative began serving 50,000 members from Allegheny Power. This step increased REC's membership by 50 percent.

"As a result of that development, we realized a tremendous opportunity through economies of scale to operate more efficiently," explained Farmer. REC increased its number of members served by the equivalent of twenty years of normal growth. The now larger customer base all helped to pay for fixed operating costs such as computer systems, 24/7 dispatchers, back-office administration, and more. REC also has the ability to shift line workers, trucks and other equipment from region to region as needed during storms and to better manage routine work.

The SCC must approve any changes to REC's rates. SCC staff will thoroughly review and evaluate REC's rate application, and report their findings and recommendations to the Commissioners for a final decision. Any approved changes will not take effect until early 2018. Over the next several months, REC will provide its members with additional details about the proposed rate changes and provide updates on the SCC's review schedule through Cooperative Living magazine, community meetings and its website at www.myrec.coop/rates. REC members may send questions to REC on that page or may call 1-800-552-3904 for more information.