Northland Connection: September 2023

September 2023 | Volume 85 | Issue 9

Clearing The Air On Missouri Time-Based Rate Changes

From the General Manager

Billboards can be a great advertising tool to spread your message. But when you are reaching so many people driving by, it’s possible not everyone is the intended audience.

That’s what has happened with the recent Evergy billboards stating, “Missouri is moving to time-based electric rate plans this fall.”

We’ve gotten quite a few questions about this, so I wanted to help clarify for members what this is all about. The simple answer is not all of Missouri is moving to time-based rates this fall, and this includes Platte-Clay Electric.

We talk a lot about how electric cooperatives are different from investor-owned utilities, and this is another great example. Investor-owned utilities in Missouri, like Evergy and Ameren, are regulated by the Missouri Public Service Commission (PSC), which was established in 1913. The commission is made up of five commissioners appointed by the governor. Earlier this year, the PSC mandated that investor-owned utilities had to move to use time-based rate structures.

Thankfully, the state’s rural electric cooperatives have a different relationship with this commission. The PSC only regulates the operational safety of the state’s electric co-ops.

So our rates and rate philosophies are not determined by this commission. Instead, they are determined by our own co-op’s board of directors who are democratically elected by our members.

Platte-Clay uses demand-based rates. Demand is the amount of power needed to supply every electrical device running in your home or business at a specific point in time. It is the maximum rate at which your household has consumed electricity.

Our co-op was one of the first to move to demand-based rates in 2016, and we have no plans to change our rate philosophy.

Back in the day, it was easier and cheaper to simply bill metered kilowatt-hour (kWh) usage at a fixed kWh rate. But with technological advances, it became possible to measure demand and bill separately, giving members the opportunity to control it. Unbundled charges for demand more fairly distribute the costs of providing service to those members who use large amounts of electricity at one time. It helps ensure members are only paying for their household’s demand, and not subsidizing other members’ demand. It is simply a fairer way of billing and showing everyone’s actual amount.

On the other hand, time-based, or time of use, pricing is a variable rate structure that charges for energy depending on the time of day and/or the season the energy is used.

In Evergy’s new Missouri Metro “standard peak saver” rate, for example, which is their new default residential rate, the per kWh price of electricity jumps from 9.5 cents to 38 cents between the hours of 4-8 p.m. in the summer months. For comparison, Platte-Clay’s kWh price is 7.9 cents 24/7.

In the time-based rate design, the downside for customers is it can be difficult to know what the per kWh charge is at any one time. And families are paying more during the time of day that they typically have to consume the most energy being at home cooking dinner and doing chores like laundry. In the end, the demand charge is simply buried in the variable energy usage charge.

Let me be clear, though, there is no right or wrong rate design. Electricity does cost more at certain times when system demand is high. Whether utilities price electricity higher at certain times of day, or offset fixed generation demand charges, both concepts are ultimately intended to help balance the stress on the power grid and the price of electricity production.

I just wanted to let you know that our co-op will be unaffected by the new Missouri PSC time of use rate changes. Be sure to read our Board President’s column in this issue as Kendall shares more information about how our rates work and the upcoming rates our board of directors has approved.

Ultimately, our management and elected directors were way ahead of the curve in adapting new technologies and evaluating new rate options in 2016. And they decided what they felt would be the best for our co-op, the membership and their families. And that’s the beauty of cooperatives. And if there is ever something better that comes up, then you can be assured we will evaluate that, too.

As always, feel free to reach out to me if you have any comments or questions.

A Special Thanks

I wanted to take a moment to express my sincere gratitude for funding my trip to Washington for the Missouri youth tour as a delegate. The experience was truly life-changing, and I can’t thank you enough for making it possible.

One of the most powerful moments for me was visiting Arlington cemetery. Seeing the rows of graves and hearing the stories of the men and women who gave their lives for our country was incredibly moving. It really put things into perspective for me and made me appreciate the sacrifices that have been made for our freedom.

The inspirational speakers on our final night were also incredibly impactful. Their stories of perseverance and dedication were truly inspiring, and I left feeling motivated to make a difference in the world.

Of course, I also had a ton of fun on the trip! Making lifelong friends and learning how to swing dance on the Potomac River are memories that I will cherish forever.

I hope that someday I can find a way to serve electric co-ops, either as an employee or as an advocate of electric cooperatives and sharing what electric cooperatives do for me. I believe in the mission and values of electric co-ops, and I hope to be able to give back to the community that has given me so much.

Thank you again for your generosity and support. I will always be grateful for this experience. I would also like to thank anyone else who took part in sending me to Washington. I would appreciate if you could pass along my message or send me their contact information.

With much gratitude,
Teddi Dixon

PCEC Youth Tour Representatives Grateful For Memorable Trip, Thank Members

Sophia Thomas, a Smithville High School senior, and Teddi Dixon, an East Buchanon High School senior, attended Youth Tour in Washington D.C. this summer as PCEC delegates. The leadership conference brings youth together from rural electric co-ops around the nation. Below are thank you letters they sent to the co-op about their trips.

Thank you Platte-Clay Electric

Earlier this summer I went on the 2023 Youth Tour trip to Washington D.C., along with Teddi Dixon from Platte-Clay Electric. In this email, I would like to give the biggest thank you imaginable for giving me the trip of a lifetime.

I have spent these past few months researching, and reflecting on where the country I’ve grown up began, and I still do not have proper words for how much this trip affected me as a person. When I heard about the Youth Tour from the past delegate Nolan Pestano, he kept using the term “trip of a lifetime.” As it was advertised on posters along the halls, it was a “trip of a lifetime.” In all honesty however I did not believe that this trip would become the trip of a lifetime, I remember applying because I thought “this can’t hurt!.” Months later, after many hours of work for what seemed to possibly be the trip of a lifetime, I found out I would be going on the trip to D.C.. This is when I began to realize that this trip was truly as described.

From the beginning day at Columbia, we were told, “you’ll cry at the end of this trip” (spoiler alert: I did), and there began 5 of some of the best days of my life. From pin trading with strangers, to touring the most beautiful and historical buildings, to making the most unexpected friendships, Youth Tour was truly magical. I adored meeting people from Minnesota, to Wisconsin, to even California. We toured the Capitol, visited the botanical gardens, and even went to Mount Vernon-my personal favorite stop.

I made friends who this whole summer have been planning the drive up to reunite our friend group, and we plan to catch up throughout our senior years. This experience created the most beautiful friendships, and I gained much more respect for people around the country, people around me, and the country itself. Youth Tour truly was the trip of the lifetime, and it was emotional to say goodbye, but this whole summer I have realized how grateful I have been for this opportunity, which is why I have emailed to say;

Thank you Platte-Clay Electric for giving me the most wonderful opportunity, new perspectives, and truly changed life for the better. I became more educated, I gained beautiful friendships, and I feel so much more proud to be a part of this country.

Thank you again,
Sophia Thomas

PCEC Celebrates 85 Years: How It All Started

Platte-Clay Electric Cooperative got its start when 22 community leaders from three Missouri counties north of Kansas City—Platte, Clay and Clinton—met in Kearney on August 27, 1938, to sign articles of incorporation and elect a board of directors.

Before the second meeting on September 3, the board had hired an attorney, a secretary and two men to go from farm to farm signing up co-op members. The board also approved by-laws for the co-op and formed a committee to find and recommend an engineering company to design the distribution system.

Howard Alexander, one of the field men, reported at the September 28 meeting that he had signed up 273 members in Platte County. Earl Arnold reported that he had signed up 100 in Clay and Clinton.

“Membership cost $5, no small sum in the height of the Depression,” the co-op’s history notes.

At the October 4 meeting, the board selected T. Archer Co. to do the engineering. It received one more vote than Black & Veatch, another Kansas City company, and a familiar name to electric co-ops to this day.

Meeting again on November 10, the board voted to accept the membership certificates of 360 Platte farmers, 213 Clay and 90 Clinton. Alexander and Arnold had almost doubled their numbers. But they had to keep riding the country roads to get more.

“The REA’s Examining Division told the board to make the system as large as possible to increase the number of potential members and density, which would help operate the co-op as economically as possible,” the history says.

Alexander also reported on easements: 98 in Clay, 125 in Platte, and “another 25 ready to sign,” presumably in Clinton. “Easements were the building blocks for the new co-op,” the history says.

Farmers willing to give easements without receiving any payment was one of the economic foundations of the federal electrification program designed and run by the Rural Electrification Administration. It was one of the ways to make electricity affordable in rural areas with low consumer density.

There is no mention of a December meeting, but by the January 1939 meeting— just five months after the incorporators met for the first time—the board, with 1,367 memberships certificates in hand, voted to borrow $487,000 from REA to build 456 miles of distribution and transmission lines.

The board opened construction bids at its April 24 meeting and chose the one submitted by O.F. Schroeder Co. of University City, Missouri. It was $25,000 lower than any other. The board also liked that the company had formed a special work group for REA construction projects.

The board dealt with two right-of-way problems at its May 20 meeting. They required route changes that had to be cleared with REA.

A week later everything was set to go. Poles soon started going up on the main roads, and late that fall, Platte-Clay Electric Cooperative lights blinked on for the first time.

Story courtesy RE Magazine, author: Frank Gallant

Board Approves New Rates To Offset Rising Prices

Board President’s Column

Earlier this year, I wrote about the upcoming 7.5% increase in overall revenue that was necessary to maintain responsible financial health for the cooperative. At our August board meeting, the directors voted and approved how the increase will be implemented on your bill. The new rate changes will begin with your October usage and then be reflected on your November bill.

These changes will ensure our co-op increases revenue enough to offset the rising costs of wholesale power in addition to operations costs that have been increasing over the last few years.

Your monthly bill is comprised of three parts: a customer charge, a demand charge and an energy charge. The customer charge will be increasing from $25.38 to $30. The demand charge will be increasing from $2.50 per KW to $3.50 per KW. And I’m happy to report the energy charge will be unchanged at $0.079 per kWh.

Member homes with average demand will see less than a 50 cent per day increase. Keep in mind, PCEC rates have gone unchanged since 2016. I’m proud of PCEC management for their efforts avoiding prior rate increases throughout this volatile economic time period.

Over the years, I’ve been asked why PCEC has customer and demand charges along with energy charges. Platte-Clay is an at-cost provider so it makes sense to align billing components with the co-op’s expenses.

The customer charge is made up of PCEC’s fixed costs such as member services, poles, wires, meters, linemen, tree-trimming, trucks, outage restoration, etc.

The demand charge is comprised of PCEC’s wholesale power bill demand components. Our transmission provider, NW Electric Power Cooperative, Inc., and our generation provider, Associated Electric Cooperative, Inc., bill PCEC for things like servicing and constructing transmission lines, substations and transformers. This equipment must be sized and maintained to meet the maximum potential load required, no matter when it is needed.

Then there is the energy charge, which is simply the variable per kilowatt hour energy cost.

There is no need to collect more money than is necessary because any profit above the cost of operations including good business practices is allocated back to consumer-members as capital credits.

The part of the bill that members can work to control, if they choose to do so, is the demand charge. The easiest way is to not run everything at once. Have your appliances take turns. For example, don’t do laundry while using your oven. Set the delay on your dishwasher to run overnight.

Consistently following these suggestions can reduce your peak monthly demand. In addition, PCEC has great online tools you can access in your account to track and monitor your usage over the month and see the fruits of your labor.

Thankfully, it has been quite a while since we last had to vote on rate changes. But my fellow directors and I believe the new changes will keep our co-op on the proper financial footing required to continue providing the exceptional service and reliability that we have all come to expect.

The Northland Connection is published monthly by Platte-Clay Electric Cooperative, Inc., 1000 W. 92 Highway, Kearney, MO 64060. Postmaster: Please send address changes to: Northland Connection, PO Box 100, Kearney, MO 64060 or mail@pcec.coop.

Platte-Clay is an equal opportunity employer.