Whether you are new to Decatur County REMC or you’ve been a member for a while, I’d like to start 2024 by answering some frequently asked questions we get from our members. We understand the importance of clear communication and believe that an informed membership is an empowered one.
How do you pay back for solar?
Decatur County REMC utilizes a net-billing process where you are billed for consumption and credited for your generation. The difference in those rates is because when Decatur County REMC sells electric energy to the member, the utility sells more than just electricity. Transmission, distribution infrastructure, and metering software are just a few items that are also included. When a member sells to the co-op, the member is only selling electric energy.
What is the Service Availability charge on my bill?
The Service Availability charge is the fixed cost of providing electricity to a metering point. Items include metering, billing, accounting, as well as items such as poles and wires. With a fixed cost, it does not vary by how much energy you use. All utilities have this charge but may refer to it as a connection or facilities charge, and some have increased their kWh rates to offset the cost.
How are my rates determined?
Decatur County REMC conducts a Cost-of-Service Study every three to five years to ensure that our rates cover the cost of operating expenses to run the business. We hire an outside consulting service approved by our board of directors that uses our actual meter data for a specific revenue year. That data is compiled, and all other financial and operating expenses are factored into the study. Once that is complete, we split out the cost for each revenue class to provide fair and equitable rates for each member. The board of directors will then review the study with the consultant and make any needed adjustments for a rate change if required.
What duties does the board of directors have vs. those of the leadership team?
The board sets the direction, mission, and purpose of the cooperative. It engages regularly in strategic planning, ensure effective planning of resources for budgets and rates, and make sure the legal requirements, as outlined in the articles of incorporation, bylaws, and other regulations, are complied with. The board selects the CEO and delegates authority to oversee the leadership team. The leadership team then executes and carries out the plans, programs, and policies as set by the board. It is responsible for hiring the personnel along with training and supervising them all while carrying out the daily operations to meet the mission.
How does the co-op business model compare to a corporate one?
The co-op business model and corporate business model differ significantly in structure, values, and priorities.
Co-ops are owned by their members, each with equal voting rights. Margins are not kept but are given back to the members in the form of capital credits. They emphasize values on their members and community.
Corporations are controlled by shareholders, usually based on their investments. Profits are primarily disbursed to the shareholders only. Their values are focused on profit maximization, with decisions often driven by financial performance and return on investment.
I believe well-informed members contribute to a stronger, more engaged community. If you have any other questions, everyone at Decatur County REMC and I are always ready to help. Your satisfaction and understanding are of the utmost importance to us. Let’s make this the best year yet.
