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LPSC approves rate adjustment -- 11.01.2009

The Louisiana Public Service Commission approved a base rate adjustment in order for the cooperative to continue to meet its equity position required by its creditors.

The most recent rate adjustment occurred six years ago. The most recent rate increase before 2003 came in 1983. During the period from 1995 to 2000, rates actually decreased 28 percent.

“In that time, the price of doing business has skyrocketed,” states John Vranic, DEMCO CEO and General Manager. “We do everything we can to keep our expenses down, but at some point we have to deal with the rising costs just like everybody else.”

Vranic explained that the bulk of the electric cooperative’s expenses go toward purchasing power from its wholesale supplier, Louisiana Generating. Other expenses include insurance, right-of-way maintenance, taxes, fleet vehicles, system improvements, etc.

“Overall, electricity remains a real bargain,” Vranic said. “The residential cost per kilowatt-hour for DEMCO members is on average with the rest of the state’s ratepayers, which is about 8 cents. And the average cost for our state is a lot less than other states. Prices across the country range from about 7 cents in some western states to 20 cents in Connecticut and 22 cents in Hawaii.”

The average consumer uses approximately 1400kWh/month. This would represent an increase of approximately $4.34 per month or 4.35%.
Major expenses include property taxes, interest on debt, insurance, right-of-way and system maintenance, fleet expenses and systems improvements to provide reliable electric service.