VEC Files Rate Request

On November 14, 2023, VEC filed with the Public Utility Commission (PUC) a request for an 8.76 percent rate increase effective Jan. 1, 2024. We appreciate that this is not welcome news at a challenging time for many members. VEC has done our best to keep the rate request as low as possible while continuing to ensure we accomplish our core job of providing safe, reliable, and clean electricity to our communities.

VEC is experiencing numerous cost pressures, most that are outside of our direct control. The main cost drivers for the 2024 rate increase request include:

• General Running of the Cooperative. Inflation has put upward pressure on some core business costs such as interest expenses, labor costs, property taxes, even the cost of mailing. These factors account for over $2 million in additional costs for foundational business operations.

• Purchasing and Distributing Electricity. Power supply and transmission increases for 2024 are expected to be more than $2.5 million higher than 2023. This is an increase of 4.58 percent over the 2023 budget of $54,870,601. Power supply costs continue to rise as a result of more expensive market rates and contract escalations. Transmission costs are driven by necessary infrastructure investments.

• Maintaining and Operating the Grid, Safely & Securely. To maintain the electrical system, we also rely on contract help and equipment purchases that have also had cost increases from supply chain and inflation. Core functions like vegetation management, security of the grid, and reliable communications systems are more expensive than last year to maintain.

• Decline in Revenues. On top of these cost drivers, VEC is also experiencing reduced revenues due to lower energy demand. We have seen decreased electric usage due to a cooler summer (less use of air conditioners) and a warmer winter (less use of electric heaters). The increase in home-based renewable energy generation (net-metering) also means the co-op sells less electricity. Additionally, the cost we are required to pay for net-metered energy is higher than what we could otherwise buy renewable energy for in the marketplace. We estimate the annual above market costs paid by VEC for net metering excess generation to be over $1.7 million.

Read more about this request here.