Carroll White REMC is announcing new rates, which will be in place with electric use beginning May 1, 2023. Inflation and rising costs have been challenging for everyone all around us in recent years, and Carroll White REMC is not immune to rising costs. The cost for generation of electricity, along with materials such as transformers, poles, wire and equipment, has increased in price. In the case of transformers, some have more than doubled in price in recent years.
As a cooperative, Carroll White REMC strives to make any change in base rates last for three to five years. The last rate change for us was in 2018. We contracted with a trusted third-party company called The Prime Group out of Louisville, KY, to conduct a cost-of-service study during the last half of 2022. The purpose of a cost-of-service study is to determine if the revenue generated by a member class is covering its cost of providing service. It also determines if any subsidies exist between rate classes, as well as cost-based rate components.
Each rate class has different types of users and load characteristics. A cost-of-service study allocates costs to members as fairly as possible based on their use patterns. A fair allocation is based on cost causation. If a member causes a cost to be incurred by the cooperative, the member should pay that cost. Through this process, the board of directors carefully weighs the information and makes the best possible decisions to ensure competitive rates with the lowest possible impact on our members while still providing the same reliable service.
Overall, the cost-of-service study revealed that Carroll White REMC needs to increase rates by an average of 2.23%. Different member rate classes will see different percentages. The General Service rate class, where most of our residential and single-phase accounts reside, will see an increase of 3.23%.