Grayson Collin News
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.
Recent News
Information for reporting your outage on the App
We have learned that when our members go to report an outage on our app, they have run into an issue. Members have received a message stating “There are no other account available on your service to report an outage.” This response happens because your meter has already notified our office that your home is without power. If you have any other accounts, like a barn or another building, that is currently not listed in the outage, it will allow you to select and report those meters as “out”. We want to assure you that though this can be a frustrating response – it just means that our office is aware of your outage, allowing us to work towards restoration as quickly and safely as possible. We have someone at our office 24/7 all year round and will be here to field your calls and help anyway we can.
903-482-7100
Concern from Members regarding high bills
Cold Weather Creates Higher Usage Resulting in Higher Bills
Recently Grayson-Collin Electric Cooperative has had an influx of concern from members about high bills. We understand that thus far we have encountered a mild winter – however, the cold snap we experienced caused a large spike in usage.
The graphs below show how cold temperatures can significantly increase energy usage. The red and blue lines are the day’s high and low temperatures. As an Arctic blast arrived on Jan. 14, these member’s DAILY usage (as seen in the green, orange and blue usage bars) nearly doubled or tripled their average usage. On average all these members had normal energy usage – until the cold weather arrived and stayed until the 17th. On Jan. 14, the high was about 22 degrees and the low dropped to about13. If the thermostat is set to 75, that’s a major 50+-degree difference during the day and 60+-degree difference at night that the heating unit must overcome. Compare that to the 25-degree difference an air conditioner must overcome to keep indoor temperatures at 75 degrees on a 100-degree day.
As the weather moved into our service area, all four members used approximately as much energy in those four days as they had the entire 13 days prior. For reference, one graph shows an entire electric house, second graph reflects a meter on a barn which also has a pool, hot tub, and a RV plugged into it, the third is an all-electric house with a wood burning fireplace with a pool, and finally a member with a gas fireplace, stove, and oven.
Although you may not have touched your thermostat, with outside temperatures dropping so dramatically, heating units must use more electricity to maintain the desired temperature indoors. We also want to emphasize that while heat pumps do use less energy and are far more efficient than space heaters(space heaters can also significantly increase your usage), heat pumps become less efficient and often switch to “emergency heat” or “resistance heat” when temperatures drop to the lower 30s. That can increase energy usage by up to three times!
You can find energy saving tips on our website www.gcec.net under the energy efficiency tab.
We are here to serve you and understand the frustration a higher than anticipated bill can cause. Our Member Services Department can be reached at 903-482-7100and our friendly MSR’s will be happy to discuss with you your bill and usage. We also offer free energy audits to help you better understand your homes energy usage.