Inflation the driver
By Kendra Walker
The Gunnison County Electric Association (GCEA) board of directors approved a proposed rate increase on Wednesday, March 29, which will come into effect on May 1. Overall rates will increase an average of 3.8% and the average residential bill will increase by 4.5%. For residential single-phase service, the monthly service availability charge will go up from $32 to $35, and the energy charge per kilowatt-hour (kWh) will go from $0.12918 to $0.13268.
According to GCEA CEO Mike McBride, the average residential account uses about 680 kWh a month. So, the average residential account can expect to be charged approximately $125 a month, but costs will vary depending on energy use patterns and seasons. “The cost is of course higher in the winter and lower in the summer,” said McBride. “The effective May 1 date is intended to help members get through the large bills of the winter before the rate increase.”
McBride said that inflation is the driver behind the rate increase. “We have to spend more for the products and services we acquire to keep the power on. But in the last several years our increases have still been well below inflation,” he said.
McBride also said GCEA anticipates a rate increase at the beginning of next year from Tri-State Generation & Transmission Association, GCEA’s power supplier. “Tri-State is experiencing higher costs as well so it’s not surprising if they increase rates,” he said, which most likely would cause GCEA to subsequently raise its rates.
McBride noted that GCEA operates on a tight margin and with the rate change estimated to result in an overall revenue increase of $780,000, GCEA is looking at breaking even this year with a 0% margin. “We’re running at the bare minimum with the rate increase that is proposed. We don’t know what will happen with inflation next year, but we do want our members to be aware that we are seeing likely suggestions for a rate increase next year as well. We continue to do all we can to keep our rates as low as possible.”
The GCEA board held a member meeting on March 27 to review the proposed rate increase and answer questions prior to its passing on Wednesday. McBride said that aside from employees, directors and media, there were three member attendees. Prior to the meeting, eight members submitted comments, with roughly half asking the board not to raise rates. “At the end of the day, there was not really a notable pushback through the whole process,” said McBride.
A notification of the proposed rate increase to members reads, “The board, management, and employees of GCEA understand this increase may impact your budget and we want you to know we will do everything we can to assist you in the months ahead. We encourage each of you to be aware of your energy use choices and to utilize GCEA and community resources available to help conserve and lower your monthly bills.”