SHERIDAN —Officials at Powder River Energy Corporation are seeking a 3.9 percent system-wide increase in electricity rates that they say is necessary in order to remain in good standing with important financial backers.
For their part, residential customers stand to see a 7.6 percent rate increase if the changes are ultimately approved.
At a meeting in Sheridan Wednesday, company officials said the precise rate increases were arrived at after a careful analysis of the costs associated with delivering power to cooperative members.
“We’ve designed (the new) rates where fairness is kind of the driver,” Manager of Financial Planning Curtis Mock said.
The slate of proposed increases — hikes which the energy cooperative plans to present to the Wyoming Public Service Commission in August — are the end result of a recent cost of service analysis undertaken by the organization.
Chief Operating Officer and Deputy General Manager Les Penning said the annual study aims to ensure that company operations are economically feasible over the long term and that no one class of customers, based on the costs associated with supplying their power, is forced to unfairly subsidize other groups.
While residential customers face a higher proportional increase than certain other groups, a wide spectrum of rate classes including brick and mortar businesses, irrigation operations and coal mines will also see increases in their rates.
The company’s 2013 operating budget anticipates a revenue shortfall of $4.4 million caused largely by a decrease in electricity demand from the producers of natural gas and coal bed methane.
Preliminary projections by the company indicate that residential rates stand to increase approximately $5.66 per month for homes consuming 1,000 kilowatt-hours of electricity.
Powder River Energy Corporation has not pursued a general rate increase since 2008, but cooperative members have seen increases in the cost of power adjustment caused by charges in the cost of energy purchased from the cooperative’s supplier.
Wednesday’s meeting, though sparsely attended, was part of a series of meetings hosted by the company across the state in recent weeks to explain the changes to cooperative members.
The company’s filing with the Public Service Commission will be available for public viewing on its website on or around Sept. 2.
If ultimately approved, the rate increases will go into effect in March 2014.
Powder River Energy Corporation serves about 12,000 members in northeastern Wyoming and southern Montana, according to its website.