While virtually all aspects of today’s cost of living continue to rise, we only consider an adjustment when we really need to. To maintain the quality, reliability and integrity of the services we provide, it is necessary for us to adjust our pricing structure.
Several factors, many of which we have limited or no control over, are driving this rate increase. The main driver stems from the increase in the cost of the power we purchase from East River Electric Power Cooperative, which is generated by Basin Electric Power Cooperative, Inc.
Effective August 1, 2016, Basin Electric implemented a 13 percent or $70 million rate increase. This translated to an estimated $9.7 million impact to East River Electric in 2016 and a projected $22 million impact in 2017. Dakota Energy received a rate increase from East River Electric in January 2017. Because of our focus on internal efficiencies, growth in energy sales, and a revenue deferral plan, we were able to hold off any rate change until January of 2019.
Costs continue to increase for our power supplier, due to things such as environmental compliance, decreased energy sales, increased plant operations and fixed costs, and decreased revenue from Basin’s subsidiary businesses.
In addition to the increased cost of power, there are internal factors driving increases in our costs that include, but definitely are not limited to, capital expenses we invest in order to maintain system reliability and internal operating costs. We, the board, management and employees of Dakota Energy Cooperative, pride ourselves on being responsible stewards of your resources; and we do everything within our power to control costs.
Dakota Energy’s electric distribution system consists of 2,532 miles of power lines, which is expensive to build and maintain. The Cooperative would experience that cost even if no one purchased power. Dakota Energy serves on average 1.41 meters per mile of line, whereas municipal utilities and investor owned utilities serve on average 30+ members per mile of line. This means that the other utilities receive multiple times more revenue per mile of line than Dakota Energy. Therefore, they are better positioned to disperse their fixed costs to more consumers resulting in lower facility charge and lower energy charge than Dakota Energy.
For farm/residential members, the new facility charge will be $52.00 monthly. The actual cost to Dakota Energy for farm/residential service is $80.45 per month. The charge per kWh will change to 12.5 cent for all kWh’s purchased.
As Dakota Energy moves forward, we offer a number of options to help member-consumers manage their power bills. Some of those services that our consumers find valuable are automatic payment options, budget billing, E-bill, sub-metered electric heat/cooling rates and energy efficiency programs.
To learn more about these programs or if you have questions regarding Dakota Energy’s rates please call us at 605-352-8591.