THE COST CHALLENGES OF A RURAL UTILITY PROVIDER

Despite the fact that your total electric bill is lower than AEP and AES (DP&L) – even after our upcoming rate increase –the fixed monthly charge portion of our bill is higher than theirs. Why is that?

The reason our fixed, or flat, monthly charge (Service Availability charge) is higher than others is because of the rural nature of our service area. On average, we serve six members per mile of line. AEP serves 29 per mile of line. AES serves 26 per mile of line.

According to the Public Utilities Commission of Ohio, AEP has invested $4,618 per residential consumer in its distribution system. AES has invested $4,299 per residential consumer. Midwest Electric has invested $5,627 per residential member.

According to PUCO, AEP and AES get about 61% of their total revenue from residential consumers. Midwest Electric gets about 67% of our total revenue from residential members. This means they’re able to get more revenue from the higher-use commercial and industrial accounts, and thus spread their fixed costs among the higher sales of higher users.

As a result, according to PUCO, AEP earns $58,291 in annual revenue per mile of distribution line. For AES, it’s $34,655 in annual revenue per mile of distribution line. For us, it’s $21,198 per year per mile of line.

We’re absolutely not complaining about any of this or asking for sympathy. In fact, we’re proud that we’re able to compete so favorably despite the challenges of being a rural service provider. This is simply meant to underscore the inherent economic challenges of a rural utility provider. It simply costs more, with a lower return. That’s why we have to charge more for the fixed part of your monthly bill.

But we will always strive to maintain highly competitive rates with a priority on safety and reliability.

With our upcoming new rate design starting on September’s bills, we also want to continue to incentivize and reward energy e ciency. Energy e ciency is still one of the best financial investments a homeowner can make. We’ve got programs to help you with all of that. Give our o ce a call at 800-962-3830.