FAQ

It is below both the state-wide average price for residential electricity (16.07 cents/kWh in Michigan) and the national average (15.93 cents/ kWh). Averages are based on October 2023 figures provided by the U.S. Energy Information Administration.

The rate changes were developed after a rate analysis performed in conjunction with third-party utility experts using established, well-accepted industry methods. The analysis, which included looking at the 2022 cost-of-service study, showed that Great Lakes Energy’s rates needed to increase due to increased expenses and cost pressures.

We first established a projection for 2024 operating expenses, adding necessary margins for financial health. Our third party then used the 2022 cost-of-service study and their rate analysis to contrast against the 2024 projection, identifying gaps produced by inflation and rising electric generation and transmission costs. A series of top-to-bottom rate designs were then created and evaluated before arriving on the final model being proposed.

Throughout this process, the key factors used to determine a successful rate adjustment for our members were: maintaining affordability, the adjustments must be easily understandable, the rates must be able to remain stable, ensure the adjustments are cost-based, and fair. We also are continuing to shift our fixed costs into the monthly charge and away from the variable energy charge, which is why there is an increase of $5 to the monthly charge. This type of rate structure allows us to get closer to the actual cost to serve each member with electricity (the fixed costs) and allows for the energy charge (kWh) to be variable and based on personal choices.

The kWh rate for residential and seasonal members will increase by $0.02202 per kWh and the fixed monthly charge would increase by $5.00. The power supply cost recovery factor will decrease by $0.01687 per kWh resulting in a net kWh rate increase of $0.00514.

For the average residential member using 800 kWh per month, these changes equate to a $9.48 monthly increase. The average residential/seasonal member who uses 300 kWh/month would pay an additional $6.81 a month.

The GLE board of directors approved these rate adjustments in November 2023. Members will see these changes beginning with their February 2024 bill.

Rising power supply costs and inflation are affecting our costs to provide service. The increase, although small, would raise revenues to provide sufficient funding levels for maintaining reliable electric service, providing adequate margins, and ensuring members receive the service they need to power their homes and businesses.

Material cost increases that are impacting our daily expenses are shown below.

The fixed monthly charge covers the cooperative’s routine operating expenses not tied to your electric consumption. It covers the cost of keeping the cooperative and its distribution system operating and ready to provide service to its members around the clock.

Here’s a closer look at some of the costs the monthly charge covers:

• Operations and maintenance:The biggest share of the monthly charge covers the cost of installing and maintaining poles, wires, transformers, and other distribution system equipment. Also included in this category is the cost of regular tree trimming and other system reliability work, along with the associated transportation costs. Serving more than 126,000 members across 26 counties, GLE is one of the largest electric cooperatives in the country.
• Support services: In addition to costs associated with accounting, metering, and billing, GLE operates eight local offices. These offices allow us to provide service to our members and to respond to outages quickly. There are many labor, equipment, supply, and other fixed costs tied to operating these offices. GLE also maintains a 24-hour emergency dispatch center to coordinate both regular service work and outage restoration efforts.
• Capital costs: GLE also incurs costs such as depreciation on equipment, interest on long-term loans, insurance, taxes, and other normal business expenses.
• Margins: Although GLE is a not-for-profit organization, to ensure the company’s long-term financial stability, it’s important for its income to exceed its costs. The cooperative uses the excess, known as margin, as a cushion against unexpected costs and to prepare for future system investments. When financial conditions allow, GLE returns margins to its members in the form of capital credits.

As costs rise in the categories listed above, the monthly charge will increase to cover those costs allowing GLE to continue providing reliable service.

Great Lakes Energy’s rates are regulated by the board of directors who you elect to represent members of the cooperative. Members elect a board member from their district every three years. Members do not vote on decisions or rate increases, but rather their elected board members make these decisions similar to our state and federal legislature.

The open member meeting held on Nov. 21, 2023, allowed time for members to provide feedback and suggestions ahead of the board’s vote. members to provide feedback and suggestions ahead of the board’s vote.