Access Energy Cooperative has a proven track record of supporting economic development, while simultaneously delivering power that is safe, reliable, efficient and environmentally responsible. Through our programs and services, we help new businesses to locate in our service territory and assist existing businesses, including agricultural operations, to expand their operations.
To ensure all electrical needs are adequately met, we plan for system reliability and safety. Electrical systems must be installed according to applicable codes and maintained and operated in compliance with established standards. Access Energy Cooperative, Northeast Power, our transmission cooperative, and AECI our generation cooperative, have robust plans for the construction, operation, inspection and maintenance of our systems.
The state of Iowa provides regulatory oversight of all electric utilities’ written inspection and maintenance plans. While the regulation for safety and reliability resides at the state level, your locally elected cooperative board members are typically responsible for the economic regulation, including policies for line or system upgrades.
Iowa’s electric cooperatives serve fewer than three consumers per mile of electric line, compared to investor-owned utilities and government-owned municipal utilities that serve up to 60 consumers per mile of line. Because electric cooperative members are spread out geographically, cooperatives must be diligent in controlling costs and methodical in setting rates.
Regularly, a cost-of-service study is conducted to determine the cost of providing electric service to all of our member-owners. Once we analyze the costs to serve all members on a cooperative-wide basis, we study what it costs to serve certain groups of members. These groups are determined based on electric usage characteristics, and members with similar electric usage characteristics are grouped together, such as all single-phase residential members may be grouped together.
As part of the study, we determine if we can directly assign some costs to an individual member or group of members, such as:
If a customer builds a home way back into the woods, he or she is responsible for the line extension costs above the average or normal amount built into the electric rates.
If a city ordinance requires that electric facilities must be buried underground, then those member-owners in that city are directly allocated the costs.
Assigning common costs. This necessary multistep approach allocates common costs to those who benefit, recognizing that it is not always a black and white situation.
Assigning power line upgrades to effectively meet the demands of load growth in a commercial or industrial setting. In those instances, when a concentrated area such as an industrial park is being served, it is generally easier for Access Energy Cooperative to plan for load growth and the subsequent costs of upgrades, which may in turn be shared among that specific customer group.
After the costs are allocated to the various groups, then the rates are designed to recover the costs to serve the groups.
Industry rate setting experts apply several key principles in the process, including:
- Providing rate stability.
- Ensuring that rates charged by an electric utility for providing electric service to each class of electric consumers are designed, to the maximum extent practicable, to reasonably reflect the costs of providing electric service to that class.
- Creating an ease of understanding about the rates for customers.
- Developing an ease of administration of the rates. Rate setting is a detailed process that your board of directors takes seriously. As the electric industry changes to include more on-site generation at homes and businesses, the rate setting process will be examined to ensure that those who directly benefit from service are paying an appropriate share of the costs.
Beyond the basic costs of building and maintaining infrastructure, many factors are currently placing additional cost pressures on providing electric service, including:
*Reduced energy sales or limited kilowatt-hour sales growth.
*Increasing federal and state laws and rules from the legislative, judicial and executive branches of government.
*Requirements related to electric facilities such as burying lines underground for aesthetic reasons.
*Installation of distributed generation from various fuel sources, including wind, solar and methane.