At its June 2021 meeting, CORE’s Board of Directors approved changes to update CORE’s rates and regulations that are effective as of Sept. 1, 2021. This rate redesign modernizes the rate structure to eliminate outdated provisions and increase transparency and certainty for CORE’s members. It affects several sections of CORE’s residential rates, but the most important parts are these:
Elimination of the Load Factor Adjustment (LFA)
Since 2015, a load factor charge was added to members’ bills in months in which their peak demand was high compared to their overall energy usage.
Retirement of the Temporary Power Cost Adjustment (PCA)
A monthly energy rate calculation started in 2021 and was added to members’ bills to recover an unanticipated 20% increase in 2020 power costs.
Introduction of a quarterly Wholesale Power Cost Adjustment (WPCA)
Due to the increasing volatility of power costs, CORE is replacing the temporary PCA with a new Wholesale Power Cost Adjustment that can adjust quarterly in response to, or in anticipation of, power cost variances so CORE may either recover power costs from members or return them to members. This variable rate rider will allow us to true-up actual wholesale power cost variances from previously forecasted amounts to better protect our overall financial stability.
Implementation of a Three-Part Residential Rate
Part 1: Service Charge
A $1 increase to the fixed monthly service charge, from $12.50 to $13.50.
Our basic service charge will increase just $1 per month – to $13.50 – for all residential accounts. This $13.50 service charge is still well below the $20 average service charge per meter served.
Part 2: Energy Charge
The charge for total energy consumed over a billing period.
This is the charge for the total energy a member consumes over a billing period, and is based on the volume of total kilowatt-hours (kWh) consumed and each member’s respective rate. The per-kWh rate decreased for residential members. Your rate class appears under Account Information on your monthly bill, and can be checked in our updated Rates and Regulations.
Part 3: Demand Charge
A new rate of $1.50 per kilowatt (kW) consumed during the “on-peak” period of 4 to 8 p.m.
Introducing a demand rate of $1.50 per kW consumed during the “on-peak” period of 4 to 8 p.m. will allow CORE to more accurately recover the costs associated with maintaining reliable service when our member base is consuming the most energy.
Click on a question below for additional insight from CORE Rates Analyst David Stowe and Engineering Services Manager Michelle McAndrew.
How will this rate change affect my bill?
The change to individual bills will vary based on several factors, including individual usage and peak demand, but the new rate redesign will result in an average of about 2.25%. For the average residential member, this would mean an additional $2.46 per month.
Why is this rate redesign necessary?
We strive to keep rates low for our members, and previously had not increased general rates since 2013. In the eight years since CORE last raised general rates, the rate of inflation has been more than 15%. The energy sources, materials and services CORE uses to provide electricity have all increased in price that much and more. As a member-owned, not-for-profit cooperative, CORE raises rates only when absolutely necessary to cover the costs of reliable service for our members.
How will this rate redesign affect CORE's finances?
CORE is a member-owned, not-for-profit cooperative. We exist solely to provide members reliable, low-cost power. Any margins (profits) we receive are either invested in infrastructure to improve the reliability of the service we provide and accommodate continued growth, or allocated back to members in the form of capital credits. Our lenders require that we meet specific loan covenants, but we also are sensitive to the effects any rate increase has on our members, which is why we have worked to delay such a move until absolutely necessary.
What steps has CORE taken to minimize the effects of rate increases on its members?
Over the last decade, CORE has returned more than $120 million to our members. Colorado is an amazing place to live and work. The continued rapid growth within our service territory has helped us overcome some cost increases in previous years without the need to raise rates. As growth continues, we anticipate keeping future rate increases to a minimum.
In the past year, we have absorbed several substantial and unexpected expenses. With the Comanche 3 power plant down for nearly all of 2020, CORE’s power costs were much higher than could have been anticipated. We also received an unexpected bill from Xcel Energy (Public Service Company of Colorado) for $8 million of the costs it incurred during Winter Storm Uri. The implementation of the Wholesale Power Cost Adjustment (WPCA) will allow CORE to forecast future costs on a quarterly basis and distribute any unexpected costs – or credits – to our members over time, without the need for a one-time rate increase or rate credit to our members for unanticipated future events.