Where I live in southwest Missouri
(Taney County), there are two electric
companies that serve the area; Empire Electric and the White River Valley
Electric Coop. I happen to use Empire
Electric while others I know have White River.
Both are relatively competitive although each has its own scheme of charging
customers.
Empire Electric has a variable tier approach where by they
charge differing rates based on the month of the year; winter rates include the
months of November through June and summer rates include the four months July
through October.
In the summer months, there is basically a single tier
charge of 0.1070 cents per kilowatt hour with a $12.52 ‘access fee’. During the
other eight months that comprise the ‘winter season’, the system changes to a
two tier approach with the first 600 kWh charged at a rate of 0.0170 cents per
kWh and then a change to a rate of 0.0871 for any use above the first 600. Oh,
and there's also something called a ‘fuel charge’ which I think is an extra amount they kind
of throw in whenever the mood hits them.
White River, on the other
hand has a much more simplistic approach. They charge $25 for the first 20 kWh
(think of this as an access fee) used and then apply a rate of 0.089552 cents for every kWh above that. A
person using 1000 watts of power in the month of September would have to cough
up $112.76 if they use White River whereas and Empire customer would pay
$119.52, (that is assuming Empire doesn’t decide to throw in an addition ‘fuel
charge’). So, while Empire comes off as
looking gimmicky, White River is not only is
easier to understand, but their rates are also cheaper in the long run!
My question then is,
‘why do they even mess with such complex fee structures’? Why not come up with a
single rate that would be the same for every month? Perhaps the answer lies in the way
Congress passes bills like ‘ObamaCare’ or in the way the IRS access taxes. Apparently, the
more complex the approach, the easier it is to befuddle the people who are
paying the tab.
Update: Another increase of approx 13% has been granted and will take effect in 2014!
Update: Another increase of approx 13% has been granted and will take effect in 2014!
