Multiple factors cause the Co-op to need to raise rates by more than 10 percent
By Louis Porter
WEC is planning to file a request for a significant rate increase with state regulators this month, due to a decline in production from the Coventry plant as work has taken place on the Casella landfill, very high and volatile electricity prices in New England, and the continued impacts of net metering on the Co-op’s finances.
Exactly what the requested rate increase will be is not known yet, but it will likely be more than 10%.
As a member-owned cooperative, raising rates is not something that WEC contemplates lightly. However, in order to continue supplying 100 percent renewable energy to our territory, maintain financial health, and deal with cost increases in everything from transformers to wholesale power, the rate increase is necessary.
As Casella has expanded its Coventry landfill project over the last year, the gas flow from the existing portions of the landfill, from which WEC members get as much as 70% of our power in a given year, has been substantially disrupted. Production is expected to grow as the landfill accepts new garbage, but in the meantime WEC has had to buy energy and renewable energy certificates on the market.
And the New England Power market is extremely volatile. With continued economic uncertainty coming out of the pandemic slowdown, further instability due to the war in Ukraine, and other factors, those prices are likely to be just as high and just as volatile this coming winter.
Meanwhile, WEC’s lineworkers need to keep the power flowing to members in a rural territory. Prices for goods and services have climbed rapidly as well. While the cost of Co-op wages is predictable, under our union contract, the cost of everything else, from diesel for trucks to transformers, is not.
The WEC staff and Board of Directors are now evaluating exactly what the requested rate increase will be, and will then submit that proposal to the Vermont Public Utility Commission. The state’s Department of Public Service will also evaluate and weigh in on the proposal.
However, the increase needed will likely be higher than recent rate adjustments WEC has requested and been approved for in the past.
It is also important to note that while corporations make profits that enrich shareholders, cooperatives return excess revenue to their members over time (see Co-op Seeks Former Members for Capital Credits Refunds).
As the rate increase request is finalized and submitted to regulators, WEC will provide more information in Co-op Currents and on wec.coop.