The cooperative routinely replaces aging poles, transformers and other equipment reaching the end of their expected lives. A&N also makes routine upgrades to its substations to meet the expected reliability standards of our members. Increased inflationary pressure on equipment and labor costs in addition to increases in energy demand are driving the need for the cooperative to update its rate structure.
Since 2018:
The cost of utility poles has increased by about 25%.
The cost of transformers has increased by 55% to as much as 200% depending on the type and size of the transformer.
The cost of wire has increased by 45% to as much as 127% depending on the type and size of the wire.
The access charge for more than 99% of the co-op’s membership will not be affected.
The proposed rate increase will only affect the access charge of members enrolled in prepaid metering in order to bring this program’s access charge in line with the access charge currently used in Schedule A-1.
The access charge is a monthly investment that helps A&N cover the expenses of operating and maintaining the electric distribution system. In Jan. 2024, the cooperative underwent a revenue-neutral rate adjustment to more equitably balance residential and commercial rates. This adjustment did not affect overall revenue.
A&N Electric Cooperative’s rates are currently the second lowest as compared to the other investor-owned electric utilities and cooperatives in Virginia and the Delmarva region. The proposed rate increase would potentially raise A&N to the sixth lowest amongst those 16 electric service providers.
We know affordable service is important to our members. We continue to look for opportunities to do more with less by implementing more efficient work practices and utilizing available technology to increase productivity and hold down costs.
It depends on a member’s account type and energy use.
The rate adjustment will also establish demand charges as a separate line item on several rates. Demand is the measure of how much total electricity a co-op member is using at any given time.
The cooperative invests in the electrical system to ensure there is enough capacity to meet the member’s highest projected demand.
The separated demand charge would allow the cooperative to more appropriately recover the investment in serving each individual member.
Demand is the measure of how much total electricity a co-op member is using at any given time. The cooperative invests in the electrical system to ensure there is enough capacity to meet the members highest projected demand.
The cooperative currently recovers demand-related costs through the volumetric energy charge, but recovering such costs through a separate demand charge will allow the cooperative to more appropriately recover the demand-related costs of serving each individual member and avoid cross-subsidization.
Demand would be measured during a single billing cycle and would reset for the next cycle.
Since demand is the measure of how much total electricity is being used at a given point in time, members will pay more, or less, in demand charges based on their maximum demand for electricity. Ensuring large appliances aren’t operating at the same time is one of the most effective ways to control demand.
For example, operating a clothes washer and dryer while using a stovetop range and oven will significantly increase demand. By avoiding the use of one or more of these major appliances at the same time you can control your demand or personal energy peak for the month. This concept can also apply to many smaller appliances being utilized or charging at the same time.
The Power Cost Adjustment is a separate line item on each A&N Electric Cooperative bill statement which reflects the increases/decreases in the co-op's cost of power purchased wholesale from Old Dominion Electric Cooperative. The fluctuation in the Power Cost Adjustment is largely caused by changes in the cost of fuel for generation. The cooperative’s PCA is typically adjusted once a year in January but has occasionally been adjusted mid-year due to large fluctuations in the price of fuel for generation.
In addition to the inclusion of a Demand Delivery Charge, the proposed rate increase would affect the Energy Delivery Charges section of an electric service bill.
With the proposed rate change, A&N anticipates it being several years before another increase is needed. The cooperative’s last general rate case was in 2018 which increased overall revenue by about 5.5%. In January 2024 the cooperative underwent a revenue-neutral rate adjustment to more equitably balance residential and commercial rates. This adjustment did not affect overall revenue.
The Cooperative’s electric rates are regulated by the Virginia State Corporation Commission to ensure they are equitable for all of our members. This avoids gender, social, racial, political or religious discrimination. The cooperative actively works with members who have difficulty paying their electric service bill. Ask us about programs available to assist these members.
The State Corporation Commission must approve any changes to A&N Electric Cooperative’s rates. The commission staff and commissioners will thoroughly review and evaluate A&N’s rate application. Since the SCC's inception, citizens have had the right to appear before the commission to express opposition or support for issues. The Commissioners encourage broad participation in SCC cases to ensure that everyone's concerns are considered. Visit www.scc.virginia.gov for more information.