2019 electric rate adjustment explanation
What is the overall electric rate increase in 2019?
MPE’s overall rate increase (for all electric rates) in 2019 is 1.1 percent. Residential customers will see an increase of $1.50 a month effective January 1, 2019.
Why did MPE increase electric rates in 2019?
- The cost of maintaining power lines and attracting and retaining a competent workforce is not decreasing. The operating cost of providing 99.9-percent reliable electric service to nearly 4,000 square miles of power lines is increasing.
- MPE is selling less electricity per customer than in years past. This is partly due to MPE’s promotion of energy efficiency. Since 2011, MPE has issued more than 1,500 appliance and 10,000 LED light bulb rebates and provided free energy audits to its customers. We believe in promoting energy efficiency. However, energy efficiency improvements result in lower energy sales.
- Inflation rose 2.1 percent in 2018. MPE has not increased electric rates in 2 years (since January 1, 2017). MPE’s 2019 rate increase is 1.1 percent.
- MPE has not increased its monthly service charge in 6 years (since 2013).
- In the Fall of 2018, MPE hired an independent rate consultant to calculate how much MPE should charge customers to cover its cost of providing electric service.
- The consultant's recommendation was that MPE raise its monthly service charge for residential and commercial general service accounts from $29 to $33 a month.
- In response, the MPE Board of Directors increased the monthly service charge $1.50 a month instead of $4 a month.
- MPE is a not-for-profit electric provider. It structures electric rates to cover its operating costs.
- MPE has adopted numerous cost-cutting initiatives that have reduced our operating costs $300,000 a year.
- Over the past 10 years, MPE has downsized its workforce from more than 74 employees to 60 employees, despite delivering electricity to more than 1,500 new services.