FreeState communicated with members regarding the electric service charge adjustment starting in November 2022.
Detailed communication was published to explain the significant rise in costs the cooperative is seeing and how a $7 increase in the electric service charge would assist the cooperative in meeting specific financial goals.
A special meeting is scheduled for Monday, January 16, at 3 p.m. at the McLouth warehouse at 507 N. Union, McLouth, KS 66054. There are plans in place to stream the meeting live.
Members can provide feedback on this proposed adjustment below.
Members are encouraged to provide feedback to the board members about the proposed adjustment before the January 16 meeting.
Feedback will be gathered from November 1, 2022, to January 4, 2023.
There are multiple ways to provide feedback.
Online – utilize an online form to provide the cooperative with your feedback.
Email – send comments with ESC Adjustment Feedback in the subject line.
In-Person – members are welcome to attend the public meeting from 3 to 4 p.m. on Monday, January 16. at the McLouth warehouse. There will be no refreshments served.
The Board of Trustees of the FreeState Electric Cooperative, Inc., will meet on Monday, January 16, 2023, at 3:00 pm at the cooperative's McLouth office, located at 507 N. Union to discuss and vote upon a proposal to adjust the cooperative's electric service charge.
The board is proposing a two-phase adjustment to the electric service charge. In February 2023, members will see a $7 adjustment to the service charge. In February 2024, an additional $2 will be added.
This meeting is open to any member that wishes to attend. Members have the right under K.S.A. 66‐104d(g) to request Kansas Corporation Commission review of any rate change. Any member with questions may contact the FreeState Electric Cooperative office during business hours at 800-794-1989.
Electric Service Charge Adjustment FAQ
The ESC is a fixed amount per rate class that provides revenue for the cooperative to cover the cost of materials like poles, wire, transformers and other infrastructure items. It also includes operation and maintenance costs.
Members have not seen any adjustment to service charges since 2010 (East District, prior LJEC) and 2012 (West District, previous Kaw Valley). For the past decade, we have worked tirelessly to maintain affordability and stability.
One reason for that decade-long consistency was the consolidation in 2017. True dollar savings paired with avoided costs put the cooperative on the right track, but the cost of wholesale power, record inflation rates, and the significant cost in materials and fuel has put increased pressure on the cooperative's finances.
It’s a trend that does not seem to be changing.
Increased Cost of Wholesale Power
FreeState members have seen the Power Cost Adjustment (PCA) increase over the past few months. The key contributor to that increase is the cost of natural gas. The cost of natural gas is a key driver for the cost of energy purchased from our wholesale power providers, (KEPCo and Evergy).
Each month you have three main components to your electric bill: Electric Service Charge (ESC), Energy Charge, and Power Cost Adjustment (PCA).
The ESC is a fixed monthly charge designed to recover the costs of providing equipment, materials, labor, and business overhead necessary to serve each meter, regardless of the amount of kWh consumer. The fixed costs are the same for every member in a specific rate class.
The Energy Charge is the price per kilowatt-hour you pay. This is the unit of measurement for electricity, and how much you use. The price of electricity is set in FreeState's tariffs, but the amount of energy you use each month varies. This rate has not changed since 2010 (East District) and 2012 (West District).
The PCA is a rate mechanism electric utilities use to recover fluctuating wholesale power costs. PCA fluctuates monthly and serves as a pass-through charge related to the cost of producing electricity. The PCA has been increasing as a result of higher fuel prices, which is making the power FreeState purchases from our wholesale providers (KEPCo and Evergy) more expensive. The wholesale power bill makes up a majority of a member's total bill.
Increased Operating Costs
Material availability, the supply chain, and inflation have caused prices to soar due to simple supply and demand. However, this means the materials needed to provide power keep going up. FreeState has seen significant increases in items like transformers (48% increase), wire (30% increase), and guys/anchors have increased by 22%, and that is only a small piece of the puzzle.
For example, in just one year, the co-op has used 5% less fuel, but the cost has increased 48%.
We understand there is never a good time to make adjustments, but this is something needed to maintain financial stability.
Members will see a $7 per month adjustment beginning in 2023 on the February bill.
- February 2023 to January 2024 - $7 per month adjustment
- February 2024 to January 2025 - $2 per month adjustment
FreeState does not make a profit, and we do not make a profit for shareholders. We return overages to our members in the form of capital credits.
For FreeState to maintain the quality, reliability, and stability of the services we provide, we must take a comprehensive look at our revenue requirements and financial goals.
We focus on keeping the business financially secure on behalf of all our members to provide the safest, most reliable service at the lowest practical cost.
As costs continue to rise, the cooperative must adjust.