Effective Jan. 22, Tipmont’s energy charge will increase from $0.1034 per kWh to $0.1054 per kWh and the service charge will increase from $32.50 per month to $34.50 per month. For the average residential consumer, this equals about $4.75 per month
There are two components to your monthly bill from Tipmont: the energy charge and the service charge.
The energy charge is simply the cost of the energy that you use each month. This is largely driven by the cost we pay to purchase that energy from our power supplier, Wabash Valley Power Alliance (WVPA). In late 2019, WVPA increased the cost of the energy we purchase from them to provide to you. Since we are a cooperative, we operate at cost and this increase has to pass to the end consumer.
I’ve written previously that we’re in the process of evaluating our contract with WVPA and exploring wholesale power market alternatives. We believe that with better control over our wholesale power supply costs, we can better position Tipmont to deliver a reliable, affordable and sustainable power supply.
The service charge helps pay for maintaining and operating the distribution system and is largely independent of energy sales. This includes the poles, wires, transformers and service personnel necessary to make the system work, regardless of how much energy is used.The service charge increase stems from two causes: growth and the cost of doing business. Since 2012, we’ve added an average of about 700 new members each year. That’s a lot of poles, transformers, wires and other equipment to en-able these services. Many electric co-ops whose membership growth is stagnant or even in decline are in far worse positions than Tipmont.
From 2012 to this current rate increase, the total cost of energy services for the average residential member has increased by just 1.02% per year while the average annual rate of inflation over the same period is 1.77%. In other words, Tipmont’s rate increases in recent years are significantly less than the general increase in prices.
Tipmont has several efficiency programs and rebates in place to help you be more efficient with your energy use and lower your bill. If you’ve not done so already, please call our office to schedule an in-home energy assessment. Our energy advisor has multiple tools that can identify air leaks and other common causes of inefficient energy use. At the end of the assessment, you’ll receive a custom report detailing the steps you can take to lower your energy bills. Best of all, this service is offered to you at no additional cost.
Helping you use less energy is consistent with our mission to empower our communities with essential services. We don’t pocket extra profit to pay dividends to far away investors. We exist solely to deliver value to you and the communities we serve. We’ve posted more details to our website at tipmont.org/2020rates.