Effective with member billings that begin on April 1, Flint Energies' basic monthly charge for residential customers will increase from $21 per month to $22. This moves the service charge closer to the true cost-of-service for residential members, which the Co-op measures today at about $30 per month per consumer.
The increase in the basic monthly charge will be another step in executing an equity management plan to increase the residential base charge by $1 a year, to $27 per month, by 2017. The gradual increase is an effort to move closer to the actual cost-of-service that has been identified in the last three rate studies. At least one neighboring electric utility recently made a larger leap to a $28 per month base charge.
Flint Energies conducts a rate study every two years to ensure that our rates cover the costs of providing service. Flint's new wholesale power contracts will take effect in 2015; our estimates predict that wholesale power costs will increase some 28 percent by then. Unfortunately, this dramatic increase is caused by things out of Flint's control, such as increased regulation and environmental requirements like pollution control, which will be reflected in current and future power contracts.
As a fiscally responsible electric cooperative, Flint is looking at managing this increase now instead of later. By gradually increasing the basic monthly charge over the next few years instead of significantly increasing the basic monthly charge in a shorter amount of time, Flint will try to soften the blow of the increase for our members.
These changes allow our Cooperative to meet financial needs and continue to provide reliable electric service, according to Flint CEO Bob Ray. "Our goal is to work every day to achieve the best operating efficiencies as we face rising power costs. Even with the slight increase in the basic monthly charge, the value of electricity remains very high," Ray says.
Option for low-income members
Members who receive a Low Income Energy Assistance Program (LIHEAP) check to help them pay for electricity will be placed on Flint's low-income rate. Members who confirm their LIHEAP standing with a check payment will be eligible for a reduced base service charge of $12, instead of $22 per month after Apr. 1, 2013.
Public Service Commission Comparison Shows That Flint Rates are Still Very Competitive with Other Providers