NEW RATES FOR OEC MEMBERS

Oconto Electric Cooperative rates will be increasing as of May 1, 2006 . In previous articles, we have discussed the reasons for the increase. This article will focus more on the actual rates and how this increase affects OEC members.

Power Cost Adjustment

The first thing you need to understand is the Power Cost Adjustment (PCA). Oconto Electric's wholesale power supplier, Wisconsin Public Service (WPS), has given us a “base rate” that they will charge OEC for the kilowatt-hours that we purchase. At the end of each billing cycle, WPS will examine exactly what it cost them to provide that power to OEC. The difference in what the actual cost is and what OEC paid through the base rate will be the Power Cost Adjustment for the next month. If the cost of providing power is less than the amount OEC paid, the PCA will be a credit. If the cost is more, the PCA will be a charge. Whatever the PCA is, Oconto Electric will pass that on to the member – whether it is a credit or expense. A few of the things that will affect the PCA include natural gas prices, coal shipping expenses and the increasing cost of raw materials. The PCA shows as a separate item on your electric bill.

How The Rates Were Determined

When determining new rates, the first thing OEC's Engineering Department does is conduct a Cost of Service study. This study tells the engineer how much revenue is needed to cover the expenses incurred by each rate class. Next a Rate Study is done using information from the Cost of Service Study. If there are extraordinary expenses in the coming year that we are aware of, that can be calculated into the Rate Study also.

After both studies were completed the Board of Directors and the Management Team very carefully considered the new rates. Since most other living expenses are increasing, OEC does not want to place any more burden on our members than is absolutely necessary but the co-op also has to be able to cover expenses and keep a certain level of equity to stay financially healthy.

OEC could have chosen to have several small rate increases over last few years - as other utilities have done - which would have reduced the amount of this increase, but Oconto Electric's Board decided not to raise the rates until absolutely necessary.

The New Rates

The new rates are shown on the chart below. The first thing to notice is that farm, residential, seasonal and small commercial accounts are no longer all the same rate. Farm and residential is pretty self-explanatory. Any service you have at your farm or primary residence would fall under this rate class.

If your primary residence is somewhere other than the service we are billing you at, then it is a seasonal account, regardless of the number of kilowatt-hours you purchase.

The small commercial rate class is intended for any type of business whose demand is less than 50 kW.

The Time-of-Use rate is increasing slightly but can still be a great way to save money on your electric bill. The on- and off-peak hours are staying the same. On-peak hours are 8 AM to 8 PM Monday through Friday, and all other hours are off-peak. There are also certain holidays that are totally off-peak, no matter which day they fall on. They are: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. If you are already on the Time-Of-Use rate, note those holidays because they have changed.

If you have any questions about the new rates, please call Oconto Electric Cooperative, 1-800-472-8410. We are always happy to discuss any questions or concerns with you.