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TIME FOR CHANGE by Greg Proctor

ON-PEAK DEMAND RATES PROVIDE FAIRNESS AMONG SIEC MEMBERS AND MIGHT JUST SAVE YOU MONEY!

What has changed in your life during the last 5 years? 10 years? 15 years?  Do you communicate differently, for example, by using text messaging?  Do you get information from different sources that use various forms of technology?  Do you use the internet to purchase goods and services and have them arrive at your front door?  Without a doubt, most of you answered YES to some if not all of these questions. 

The energy industry has also experienced substantial change in recent years.  Innovation has brought forth smart homes controlled by smart phones that use energy captured from nature.  The electric car has emerged from the 3 wheel golf cart to a sleek, high performance vehicle.  We have seen advancements in battery technology, construction materials, and energy efficient appliances.  Society now views how and where energy is produced and used in a different light.  The delivery of energy is no longer a one way street and how the electric distribution system is utilized has changed.

Cooperatives across the United States are founded on a few basic principles with the strongest of those being fairness.  The equation for going about business is simply sales = expenses with any dollar amount in excess of expenses being returned to the member based on their financial contribution to the “sales” portion of the equation for the given year (i.e. margins).  Cooperatives have always returned money to their members in a fair manner, but despite best efforts, have not always been able to collect money to cover expenses at the same level of fairness. Recent technological innovations have dramatically altered our ability to achieve fairness.

Effective September 1, 2017, a change will take place at Southern Iowa Electric Cooperative that will increase fairness among members. All residential, seasonal, farm, non-residential, and public meters will have a demand component on their monthly bill:  Why - to begin recovering cooperative expenses based on each member’s contribution to that specific cost.   You see, Southern Iowa Electric Cooperative also pays a power bill each month on behalf of ALL of our members.  It is divided into 2 parts: 1. Energy (kWh) – total energy consumed and 2. Demand (kW) – the highest amount of energy required over a specific period of time.  The demand component of your cooperative’s bill is based on the highest amount of energy the entire SIEC distribution system requires during a one hour period.  Data from our power supplier has identified this period of time as almost always occurring between 7:00am - 8:00am in the morning or 4:00pm - 8:00pm in the evening (Monday-Friday ONLY). These are Southern Iowa Electric Cooperative’s ON-PEAK demand hours.

Historically, each SIEC member has paid an equal amount for demand because it could not be measured by mechanical metering equipment.  It was simply included within the energy (kWh) price. During the last 15 years, your SIEC Board of Directors has invested in technology capable of measuring each member’s individual portion of the entire SIEC system demand expense during ON-PEAK hours.  Each member can pay their fair share!  Because of this, members who contribute very little to the system wide demand will likely see a reduction in their monthly bill.  However, members who greatly contribute to the system demand will likely experience an increase in their monthly bill.  But the choice is theirs!  Members can choose to simply shift some of their energy use outside of ON-PEAK hours or stagger use during ON-PEAK times from one hour to the next.  Paying attention to energy use during the ON-PEAK hours from 7:00am -8:00am and 4:00pm – 8:00pm (Monday – Friday ONLY) can provide savings for you and the cooperative. The on-peak period only constitutes 15% of the annual billable hours.

As a member, you may have the following concerns:

  1. My schedule does not allow me to stagger and/or shift energy use during ON-PEAK times and I can’t afford a higher electric bill, what can I do?

Southern Iowa Electric Cooperative realizes that change requires education and communication.  We are just beginning this process so the initial price charged for ON-PEAK demand is very low in an attempt to reduce as much negative financial impact as possible. As a result, SIEC will still be recovering part of our system demand cost in the traditional energy (kWh) charge.  However, future rate increases will be primarily applied to the ON-PEAK demand charge.  This means members will see a slow increase in the price for ON-PEAK demand (kW) and a slow decrease in the price for energy (kWh) over time. Members can also find savings by utilizing a timer on household equipment, such as the water heater, and/or using a programmable thermostat.  Investing in energy efficiency lighting, insulation, and performance doors and windows can make a sizable difference as well.

  1. If the majority of members make the effort to adjust their energy use during ON-PEAK hours, will the cooperative have enough money to maintain the system?  

The cost of maintaining the Southern Iowa Electric system comes primarily from the Customer Related Fixed Charge, but not entirely.  The ON-PEAK demand charge is different. It relates entirely to our power bill.  Simply put, if your ON-PEAK demand is reduced then the whole cooperative’s ON-PEAK demand is reduced.  You save and the coop saves!

  1. Is it possible that once the majority of Southern Iowa Electric Cooperative members change how they use energy that the ON-PEAK hours will change?  

Southern Iowa Electric Cooperative serves an agriculture driven community and has for the past 78 years.  That is our heritage and our tradition.  Changing who we are as a community would take generations.  Lifestyles don’t change overnight either.  Although the possibility exists, it is a very small chance that the ON-PEAK hours will change.

Fairness among members.  The Board of Directors and employees of Southern Iowa Electric Cooperative have this in mind when each decision is made.  The introduction of ON-PEAK demand rates is yet another step in improving member fairness.  Cooperative members already receive capital credits based on the amount they pay.  Now, members will pay for the energy they use, and for the first time, their portion of the SIEC system ON-PEAK demand expense.   

Click here for Example Bill with Demand                        Introducing On-Peak Demand Rates

Click here for Easy to Understand Demand Video         Click here for a Slide Show on Demand

Click here for Glossary of Electric Service                     Click here to view SIEC Tariff

Service Charges:

Returned Check Fee                $30.00

Meter Testing Fee                    $25.00

Posting Fee                             $50.00*

Disconnect Fee                        $50.00   

Trip Fee                                   $50.00   (After Hours $150.00)

Reconnect Fee                         $75.00   (After Hours $225.00)

**Meters are posted for disconnect between November 1st and
       April 1st if we do not contact the member before hand**

           A member will be charged with the actual costs of any deliberate
            destruction on SIEC’s property located on member's premises.

For current rate schedule contact our office at 1-800-607-2027.



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