Revenue Neutral Rate Adjustment Frequently Asked Questions
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All utilities impose a flat monthly basic charge, as approved by the State Corporation Commission, designed to recover certain fixed expenses associated with making utility service available to your location. The utility incurs these expenses regardless of how much energy you consume. These expenses may include customer account expenses such metering, billing, and payment processing as well as fixed costs associated with your individual service line such as depreciation, maintenance, and financing costs.
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These utilities include electric, water and sewage services and also include communication utilities such as cell phone, internet, satellite and cable TV service providers.
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The fixed expenses are currently covered by the access charge and a variable rate called an energy delivery charge. The energy delivery charge is dependent on the volume of electricity sold to help cover the expenses the access charge falls short on covering.
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Historically, the cooperative has not been able to recover the fixed costs of our plant investment in the fixed monthly access charge. The remainder is currently recovered in the variable per kWh charge.
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Flattening the variable rate and shifting that cost over to the fixed access charge will more equitably distribute the overall cost of electric distribution service across the cooperative’s membership.
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As energy efficiency measures and technology is deployed, over time a member’s energy usage will start to decrease, in turn, the Cooperative will not recover the fixed costs associated with owning and operating distribution plant when the member needs it.
In general, the rate adjustment will result in either a decrease or an increase to a standard monthly residential bill depending on how much energy is used in a given month. The cooperative anticipates that more than two-thirds of the membership should see a decrease in their overall monthly bills as a result of the proposed rate adjustment.
A member services representative can provide a projection of how you bill total could compare once the new rates take affect on Jan. 1, 2024. Submit a “Contact Us”, use our Webchat feature or call us at 757-787-9750.
More information can be found for each rate class affected by the adjustment:
Schedule A-1 Residential and Church Service
Schedule A-2 Farm, Civic, and Ancillary Related Residential Service
Schedule TOU-A-1 Residential Time of Use
Schedule B Small Commercial and Industrial
The change to the access charge and variable rate will go into effect on Jan. 1, 2024.
- All utilities impose this flat monthly basic charge to cover the equipment required for the specific service.
- Residential access charges for cooperative electric distribution service in Virginia range from $14.70 to $34.
- A revenue neutral rate adjustment is a statutory ability for the cooperative to adjust how revenue is generated within a rate class as long as it does not increase/decrease the total revenue generated by the rate class.
- It is used as a way to adjust the access charge to help ensure cost recovery based on the cooperative’s cost of service.
- It is accomplished through cooperative board approval and a filing with the Virginia State Corporation Commission.