Utilities provider for the Dillingham area says the modest price hike should help bring its margins back into the black.
DILLINGHAM: Next month, the Nushagak Electric and Telephone Cooperative will raise the electric rates by ¢.005 per kilowatt hour for customers across the board. The co-op's operating costs are still higher than its revenues, according to CEO Mike Megli.
"We raised rates a half-penny a year ago, just to see how far that would take us," Megli said Wednesday. "We're still kind of undershooting, and so we're proposing to raise it again another half-a-cent."
That increase is likely to be applied to residential, small commercial, and large commercial customers starting January 16.
The rather modest hike would translate to $2.50 extra on the monthly bill for a residential customer who used 500 kilowatt hours. Many residential customers will likely not notice the increase because the first 500 KWh are subsidized by the Power Cost Equalization program, or PCE.
Megli said that Nushagak always keeps tight margins, and in fact the books have been in the red since last quarter. Though overhead costs, like labor, are stable according to Megli, almost every other cost of doing business has gone up this year. On top of that, kilowatt sales during the summer peak months were down.
Nushagak also built a new fuel storage tank this year, which cost roughly $300,000 of co-op funds on top of a million dollars of grant money from the state.
Nushagak saved money in one area this quarter. The fall fuel delivery came in at $3.46 per gallon, substantially cheaper than years past.
"That's close to fifty-cents a gallon less than last year," said Megli. "Our spring delivery was also less. When you add in the fuel that was left over from last year, and the deliveries from this year, the total weighted cost is right at $3.50."
All members of the Nushagak Co-op can offer comment on the proposed rate increases until January 2. If the increase goes into effect January 16, customers will see the increase on their March 1 bill.