Residential Demand Charge Begins in 2027

As the cost of those investments continue to rise, it has become imperative that we adjust the structure of our residential and general service electric bills to more closely align with how the Cooperative is charged by its power suppliers. 

Starting January 1, 2027, residential and general service members will be billed on three components instead of two. Approximately half of the Cooperative’s power bill from its suppliers comes from demand charges. In fact, we paid more than $32 million in demand last year. Depending on the time of year, between 50 and 70 percent of those demand costs can be attributed to our residential and general service members.

Right now, residential and general service members pay what we call a blended rate – meaning that demand is combined with energy and basic service charges. In 2027, Sioux Valley Energy will move away from rate blending and break out all components. This change will reflect the members’ individual use of energy, the cost of basic service, and the highest demand of electric use placed on the system within the billing cycle.

It’s important that our members understand what goes into their electric bill and what impacts it. We plan to spend the next eight months providing you with the background information and tools you need to both understand how this change will impact your electric bill and offer strategies to control costs.

Watch for additional information and tools in the coming months as we expand our Demand 101 educational efforts which will include a dedicated webpage, demand calculator, in-person and online training opportunities, and various other communications. 

Stay safe and enjoy the spring weather.