Full Rate Adjustment: Ensuring Reliable & Efficient Power
Wholesale power is 55% to 60% of Yellowstone Valley Electric Cooperative's (YVEC) total cost of electric service. Typically, our co-op purchases $20M+ worth of power annually. We have been notified by both of our power suppliers, the Western Area Power Administration and Basin Electric Power Cooperative, that wholesale power costs to YVEC will increase by about 7.5% to 8%. It is rare for both of our power sources to increase their prices simultaneously, but they are reacting to the struggles in the power market. They too have seen inflationary pressures, increased regulatory scrutiny, and volatility in the market due to the influx of intermittent sources of power.
As a result of this increase to our largest expense, YVEC must adjust our retail rates this fall, effective October 1. This rate change will result in an approximate 5% increase in overall revenue for YVEC and is necessary to keep our cooperative in good financial standing. This adjustment will only affect the base charge portion for each rate class. The kWh or energy charge for power usage will not be adjusted. YVEC will now have the 4th lowest base charge among electric cooperatives in the state.
YVEC takes great pride in operating as efficiently as possible. We have placed a concentrated emphasis on controlling expenses while serving and informing our members with excellence. A great example is the number of consumers/members we serve per employee. The average electric cooperative in the United States serves 309 members per employee. In Montana, electric cooperatives serve 231 members per employee. At YVEC, we serve 438 members per employee, ranking us in the top 5% in the country. We are extremely proud of the continued efficiency our cooperative produces.
Our Board of Directors are all members of the cooperative. The policies and procedures approved by the Board of Directors also affect their homes and businesses. They continue to keep their focus on the members as well as the cooperative. Providing reliable and affordable power is top of mind for all of us at YVEC. It’s not just part of our mission, it’s how we operate our business. Our rates remain extremely competitive in the region, especially compared to the local investor-owned utility. Reliable and affordable power is always our goal while continuing to implement the cooperative principles.
Brandon J. Wittman
Chief Executive Officer