Delta-Montrose Electric Association members will see a rate increase on their bills next month after the board of directors voted unanimously on Tuesday to raise rates.
Since DMEA’s last rate increase three years ago, the company’s wholesale cost for electricity has gone up in addition to inflation, DMEA board president Bill Patterson said. This new rate increase will help cover those costs, he added.
“We have certain expenses,” Patterson said. “And we have to make sure we can cover those expenses so we can keep providing electricity to our members.”
The increase will affect almost every rate class, from residential homes to small and large commercial use as well as energy charges and access fees. Members will see those rates take effect on Sept. 1.
Residential prices will go up 5 percent, while small and large commercial use will rise to 3-3.5 percent and 5-6 percent, respectively, said DMEA Chief Financial Officer Wade Pynes.
Before the vote, Pynes showed a projection of what the increased rates would look, saying prices will still be below or even to current state averages.
Patterson said the various increases mean that every member pays “their fair share.”
“We’re trying to keep it as evenly as possible,” Patterson said.
The DMEA board of directors previously recommended a rate increase of between 3.5 and 5 percent, depending on the rate classification.
When asked by a DMEA member if a rate increase could happen as soon as next year, Pynes said he doesn’t expect one; but Patterson added: “You don’t want to say never.”
“If the coal mine goes out of business that’s a significant portion of our revenue,” Patterson said. “... It would take some catastrophic event or a major reduction in energy.”
But, Pynes said, the rate adjustments are possible in a couple of years. This is due to DMEA’s new power supply agreement as it has a different cost structure compared to the company’s current concurrence with Tri-State Generation and Transmission Association, he added.
Pynes said though the rate increases have to happen, DMEA looked into how to properly cover costs.
“Rate increases are never pleasant; not for our members, nor for us. These are things that we don’t take lightly. These are the kinds of things that have been going on for months,” Pynes said.
After a lengthy dispute over a buyout figure, DMEA recently brokered an agreement to leave power wholesaler Tri-State. The withdrawal is not official before next May and for now, the co-op continues to purchase power from Tri-State.
Andrew Kiser is the Montrose Daily Press’ sports/business writer. Follow him on Twitter @andrew_kpress.