By Matt Hanson, McKenzie Electric CEO

Building on last month’s article regarding the pending rate increase from our power suppliers Basin Electric Power Cooperative (Basin) and the Western Area Power Administration (WAPA), I thought it would be helpful to share the process by which a rate increase occurs along with an anticipated timeline for the potential increase. Both suppliers have signaled rate increase between 6 and 10%.

WAPA is a federal entity, and their rate process is somewhat unique. They filed a public notice of the rate increase at the end of June with a January 1, 2025, effective date. During their rate change process, there is a public comment period, but overall, there is generally minimal change to what is filed in the Federal Register. The amount of power McKenzie purchases from WAPA is very small, less than 1% of our total power purchased.

Most of the power McKenzie Electric purchases is from Basin. Basin’s rates are governed under the Federal Power Act by the Federal Energy Regulatory Commission (FERC). During their rate change process, Basin must submit their rates to FERC for approval. This process is also public in which outside parties can submit comments for or against the filed rates. Once a rate is filed, there is a 60-day period for FERC to review the submitted rate proposal along with any comments received by outside parties to determine the outcome of the requested rate change. There are generally three actions that FERC takes. One, they approve the submitted proposal; two, they conditionally approve subject to a refund following further review of the proposal, or three, they deny the rate proposal. Basin has communicated the intent of filing the proposed rate increase with FERC in September with the intention of having the rates go into effect January 1st, 2025. This timeline may extend depending upon the action FERC takes. McKenzie Electric will stay engaged with this process

McKenzie Electric contracts an independent firm to perform a cost-of-service study annually or when there is a material change, such as an increase in the cost of power. The cost-of-service study ensures each rate class is covering their portion of the Cooperatives expenses through the rates they pay. Following the official rate increase, McKenzie Electric will contract a cost-of-service study to determine the rate impacts to the members of the Cooperative. Given the anticipated timeline, an increase in a member’s bill would most likely not show up until the first part of 2025. Any adjustments to the forementioned timelines would likely impact the timing of when you would see a rate increase on your monthly power bill. McKenzie Electric will continue to keep the members informed on the pending rate increase. As always, if you have any questions, please reach out.