Sioux Valley Energy to Institute Rate Increase in April 2024

Due to increased costs for material, equipment, operations, financing, and power supply, the Sioux Valley Energy Board of Directors approved an overall average rate increase of 6.38 percent as of April 1, 2024. Rate adjustments to specific rate classes (i.e. - residential, rural residential, large power, general service, etc.) will vary based on the cost of service.

Message to Members from Sioux Valley Energy General Manager/CEO, Tim McCarthy:

Learn more about the 2024 rate changes:

  1. Increased capital costs. Equipment and material costs have skyrocketed since 2020. As an example, the cost of transformers, poles, and enclosures have all increased more than 100 percent in less than four years. We scaled back our line replacement plan from 125 miles to 100 miles temporarily, but to maintain reliability, we need to get that back up to 125 miles per year and plan to do so in 2024.
     
    Material/ Equipment Cost Increase Since 2020 Cost Increase since 2022 Current Lead Times
    Single-phase Transformers 173% 26% 80-90 weeks
    Three-phase Transformers 92%-120% 30%-45% 24-32 weeks
    Meters 13% 10% 54 weeks
    Poles 104%-138% 54%-96% 24 weeks
    Enclosures 108%-111% 50%-63% 43-50 weeks

     

  2. Increase in operating costs. It’s not just our capital budget that has increased. Everything we do to support our members has come with higher expenses—from postage to printing and software to billing—it has all gone up.

  3. Increased cost of borrowing. Since the year 2020, interest rates have gone up by 150 percent. This makes for a substantial increase given our capital budget will be $20.4 million in 2024.

  4. Power supply rate increases. Approximately 60 percent of Sioux Valley Energy’s costs go towards purchasing power. As a result, when our power suppliers institute a rate increase, it is impactful. Both of our power suppliers have announced a rate increase for 2024.

Rates (Effective 4/1/2024)

Farm and Rural Residential

Rate ComponentOld RateNew Rate
Single-phase Basic Service Charge$55$65
Three-phase Basic Service Charge$100$120
Energy Charge$0.1026$0.1055

Rates (Effective 4/1/2024)

Residential

Rate ComponentOld RateNew Rate
Basic Service Charge$20$30
Energy Charge$0.1026$0.1055
RATE CHANGE CALCULATOR
Residential
Residential Old Rate
Energy Charge kWh x $0.1026: $0.00
+ Basic Service Charge: $20.00
Total Charges: $20.00
Residential New Rate
Energy Charge kWh x $0.1055: $0.00
+ Basic Service Charge: $30.00
Total Charges: $30.00
Farm and Rural Residential Single-Phase
Single-Phase Old Rate
Energy Charge kWh x $0.1026: $0.00
+ Basic Service Charge: $55.00
Total Charges: $55.00
Single-Phase New Rate
Energy Charge kWh x $0.1055: $0.00
+ Basic Service Charge: $65.00
Total Charges: $65.00
Farm and Rural Residential Three-Phase
Three-Phase Old Rate
Energy Charge kWh x $0.1026: $0.00
+ Basic Service Charge: $100.00
Total Charges: $100.00
Three-Phase New Rate
Energy Charge kWh x $0.1055: $0.00
+ Basic Service Charge: $120.00
Total Charges: $120.00
Heat Rate
Old Heat Rate
Energy Charge kWh x $0.0635: $0.00
Total Charges: $0.00
New Heat Rate
Energy Charge kWh x $0.0655: $0.00
Total Charges: $0.00

Rates (Effective 4/1/2024)

General Service

Rate ComponentOld RateNew Rate
Single-phase Basic Service Charge$55$75
Three-phase Basic Service Charge$100$120
Energy Charge$0.1026$0.1055

Rates (Effective 4/1/2024)

Large Power

Rate ComponentOld RateNew Rate
Basic Service Charge$1.20/kVa

$1.50/kVa

Demand Charge$16.50/kW$17/kW
Energy Charge$0.03650/kWh$0.03760/kWh

The Basic Service charge is a fixed amount on your electric bill each month. This fee helps pay for the electrical infrastructure (poles, wires, transformers, substations, etc.) that is required to get power to your home or business. It also helps pay for the maintenance of that equipment. There is a fixed cost for the infrastructure regardless of how much electricity you use (even if you use 0 kWh there is a fixed cost to have the service at your location). The average investment per account is approximately $12,500 plus ongoing maintenance costs. As the cost of infrastructure (poles, wires, transformers, etc.) have all increased significantly, the need for increasing the Basic Service charge has also gone up.

  1. If a single-phase farm and rural residential member uses 1,500 kWh a month, their monthly electric bill will increase $14.35.
  2. If a residential member uses 1,200 kwh a month, their monthly electric bill will increase $13.48 a month.
  1. The last time Sioux Valley Energy raised rates was in 2020. Sioux Valley Energy has worked to hold off a rate increase for nearly four years during a time of skyrocketing inflation. SVE was able to do that through system growth, the use of deferred revenue, careful budgeting, management of spending, and the temporary scaling back of line construction.
  2. We have now gotten to a point where we are not able to absorb the increased cost of materials/equipment and we need to bring our line construction schedule back to normal to ensure that we are able to provide reliable service to our members.
  1. There is a cost to the Brandon building. However, the rate impact is minimal because this is a capitalized asset and the expense is spread out over a time period of approximately 50 years, so both existing and future members pay for it. This expansion is necessary to prepare the Cooperative to serve members into the future.
  2. On an average $120 electric bill, approximately 60 cents will go towards the Brandon building expansion. That is just one half of one percent (0.5%) of your electric bill.
RATE CHANGE CALCULATOR
Residential
Residential Old Rate
Energy Charge kWh x $0.1026: $0.00
+ Basic Service Charge: $20.00
Total Charges: $20.00
Residential New Rate
Energy Charge kWh x $0.1055: $0.00
+ Basic Service Charge: $30.00
Total Charges: $30.00
Farm and Rural Residential Single-Phase
Single-Phase Old Rate
Energy Charge kWh x $0.1026: $0.00
+ Basic Service Charge: $55.00
Total Charges: $55.00
Single-Phase New Rate
Energy Charge kWh x $0.1055: $0.00
+ Basic Service Charge: $65.00
Total Charges: $65.00
Farm and Rural Residential Three-Phase
Three-Phase Old Rate
Energy Charge kWh x $0.1026: $0.00
+ Basic Service Charge: $100.00
Total Charges: $100.00
Three-Phase New Rate
Energy Charge kWh x $0.1055: $0.00
+ Basic Service Charge: $120.00
Total Charges: $120.00
Heat Rate
Old Heat Rate
Energy Charge kWh x $0.0635: $0.00
Total Charges: $0.00
New Heat Rate
Energy Charge kWh x $0.0655: $0.00
Total Charges: $0.00