Mountain Parks Electric no longer increasing rates following better-than-expected 2018 financials
Mountain Parks Electric has decided to forego a planned rate increase for 2019 thanks to a colder winter increasing revenues.
In December, Mountain Parks Electric announced they would be raising electric rates 1.1 percent starting January 2019. However, a member complaint about the rate increase caused the Mountain Parks Electric Board of Directors to stay the rate until after the complaint was heard and the board could make a final decision.
According to a Mountain Parks Electric press release, the board voted to forego the rate increase at their Feb. 14 meeting because revenues for November and December were up 14 percent above budgeted revenue thanks to colder weather and an increase in heat usage, which negated the need for a rate increase.
“As a not-for-profit electric provider, Mountain Parks Electric increases its electric rates reluctantly,” said MPE General Manager Tom Sifers. “We do our best to control operating costs. Even so, last fall, it really looked like a rate adjustment would be necessary. But when 2018 year-end revenues significantly exceeded projections, the increase was no longer needed. That’s good news for Mountain Parks Electric and our members.”
The colder weather directly correlates to a high electric consumption for heat-related loads like furnace fans, in-floor heat pumps, electric heaters, hot tubs and heat tape, according to Mountain Parks.
A change in accounting practices that resulted in an additional $186,000 in revenue that was received in January 2019, but recorded in December 2018 also contributed to the decision not to increase rates.
In an explanation for the rate change, Mountain Parks Electric cited the rising costs of maintaining power lines, recruiting and retaining workforce and the increased inflation rate. However, the increased revenue is enough to be applied to the 2019 budget to cover costs.
Mountain Parks is also looking into other issues brought up at the formal complaint hearing in January, including the length of its rate increase notice period, the impact of rate structure on low-usage members and the effect of wholesale power costs on retail electric rates.
The release states that the electric cooperative is investigating extending the notice period for rate increases, aid for low-income and low-usage members, as well as strategies to mitigate wholesale power costs.
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