2023 Electricity Rate Change
Notice of Rate Change
Notice is hereby given that Grayson - Collin Electric Cooperative, Inc. (the “Cooperative”) intends to change rates for electric service. Pursuant to Texas Utilities Codes Section 41.061 the Cooperative has adopted a resolution approving and adopting the rate changes. The rate changes are effective November 1, 2023, or as soon thereafter as may be allowed by law.
The proposed rate change is described as follows:
*These rates reflect a correction of the rates previously published in the October 2023 issue of Texas Coop Power Magazine.
It is anticipated that the adopted rate change will increase electric rate revenues by $18,310,863 or 8.75%.
You may obtain further information concerning the adopted rate changes by calling the Cooperative at (903) 482-7100.
Frequently Asked Questions Concerning Rate Adjustments
Q: What is GCEC’s main reason for the rate change?
A: To recover the utility’s costs –wholesale power supply, operations, inventory, maintenance, repair, and administration overhead through the monthly Base Fee and Energy Charge, while lowering the Power Cost Recovery Factor.
Q: Why the need to change and when was the last rate change?
A: The last electric rate change was made in 2015, which was a reduction in revenue. The last rate increase was in July 2006. Since the last rate change, the cost to operate the cooperative has increased.
Q: Who determines when a rate change is necessary and by how much?
A: In accordance with the Public Utility Regulatory Act of Texas, the Cooperative’s Board of Directors and executive staff continuously monitor the financial stability of the organization to determine if or when a rate increase is necessary. To establish the new rate structure, an independent, experienced firm reviewed and recommended changes to our rates based on a Comprehensive Cost of Service Study. Based upon these findings, the ultimate authority for rate structure lies with the member elected Board of Directors.
Q: What is the effective date of the new rates and when will I see this reflected on my bill?
A: The new rates will be effective November 1, 2023, and will be reflected on your bill thereafter.
Q: Do members have a voice to express their opinions about the rate changes? How will members continue to have a voice in future rate revisions?
A: The Cooperative’s Board of Directors are elected by members to represent the interests of the members with a fiduciary duty to insure the financial integrity of the Cooperative. The board works to see that Grayson-Collin Electric Cooperative operates conservatively and is efficient in its operations and management, making decisions after considering the best interests of all co-op members. The board thoroughly reviewed all aspects of the Cost of Service Study and recommendations.
Members are always welcome to call our offices at 903.482.7100, and there will be a meeting to answer member questions at 6:00 PM on October 26, 2023 at our offices located at 14568 FM 121 in Van Alstyne.
Q: Did rates change because of the deployment of Grayson-Collin Communications fiber projects?
A: No. The implementation of a rate increase is due to the economics of running Grayson-Collin Electric Cooperative. The Cost of Service Study examined the cooperative’s overall costs for poles, wires, hardware, materials, insurance, and additional items that allow Grayson-Collin Electric Cooperative to operate based a mission of providing the very best service possible at the least cost possible.
Grayson-Collin Communications, while a wholly owned subsidiary of the Cooperative, operates as a stand alone company providing value added service such as phone and internet services. No cost of operations of the subsidiary were considered in the setting of rates for the Cooperative.
Q: Traditionally capital credits are returned to members; can the Co-op keep that money instead of increasing rates?
A: Grayson-Collin Electric Cooperative is a not-for-profit electric cooperative. Federal and State laws, along with Cooperative Bylaws mandate that any margins (profits) made by the cooperative must be allocated to the membership in the form of Capital Credits.
These Capital Credits belong to the Members. Bylaws state that the Board has the authority to approve returning these funds in the form of a Capital Credit Retirement.
The Rate Increase is designed to increase revenue and cash flow to allow the Co-op to continue to provide the level of service expected and deserved by the members. Retention of Capital Credits cannot accomplish this goal.
Q: Does GCEC anticipate another rate change next year or in the next few years?
A: At this time, the short answer is “No.”
While a Cost of Service Study is performed every three to five years, and the Cooperative financial statements and health are monitored monthly by the staff and board, rate adjustments have been few and far between in the past two decades.
Rates were increased in2002 for the first time since 1988. They were increased again by about 7.8% in 2006. Rates were decreased by a little more than 5% in 2015. Based on that pattern, you can see that we design rate structures for the long term.
Q: What is GCEC doing to keep costs down?
A: Since 1937, the single mission for Grayson-Collin Electric Cooperative has been to provide the very best service possible at the least cost possible. While we cannot control every aspect of the industry, especially with changes to state management of the bulk generation of transmission system since Winter Storm Uri, we strive to operate very efficiently without jeopardizing reliability.
The following chart prepared by the National Rural Utilities Finance Corporation shows that we are in the top 2% nationally in controlling costs to our members.
Q: What can I do to manage and reduce my electric costs, and can the Cooperative provide any assistance in this area?
A: Grayson-Collin Electric Cooperative advocates for efficiency in our operations and for our members. You can find Energy Efficiency Tips on our website www.gcec.net posts on our Social Media platforms, and we offer Energy Audits at no cost to the member.
Q: What is the Base Fee?
A: The Base Fee is sometimes known as an availability charge. It covers expenses associated with having a service available at your home or business, including billing, repairs, meter testing, maintenance of the distribution system and all other fixed costs. In other words, the Base Fee covers a portion of the fixed costs of doing business whether energy is purchased or not.
While Cost of Service Studies since 2002 have shown that the basic fixed costs have consistently been$35.00 - $38.00 per meter per month, the $25.00 Base Fee ensures that expectations for continuous power and outstanding member services are met. It gives each member a fair and equal share of the cooperative’s operations. It provides funds that must be invested back into the cooperative to maintain the quality, reliability, and integrity of service that our members have traditionally counted on and come to expect.
Q: Why is the Base Fee not raised the same across the board?
A: The cost to provide electric service to different classes of members varies and thus, the Base Fee is different.
For example, a member with commercial or three-phase services requires more power at times than a farm and home residential member. Grayson-Collin Electric Cooperative provides additional larger transformers and additional facilities to a commercial or three-phase member. This additional infrastructure costs more, thus the Base Fee higher.
Q: What is PCRF?
A: PCRF stands for Power Cost Recovery Factor, which in basic terms is the difference between the estimated cost of electric service and the actual cost. Since 2002, PCRF has been positive (adding cost) when actual costs are higher than estimated, and PCRF has been negative (lowering cost) when estimated costs were higher than the actual costs.
This rate increase eliminates the positive, most recently $.03/kWh PCRF, that we have seen for much of the past decade.