Find quick answers to frequently asked questions about your Lake Country Power electric service.
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Why has my electric bill gone up?
What is responsible for the additional GRE Wholesale Power Cost Riders?
Why doesn't Lake Country Power buy power from someone else?
How do Lake Country Power's electric rates compare with other utilities?
Why are co-op rates higher than other utilities?
What is the Facilities Charge?
I only use a small amount of electricity, the Facility Charge is unfair:
Why is Lake Country Power's facility charge/rates higher than other utilities?
Why are Lake Country Power's rates higher than Minnesota Power?
What can I do to minimize my electric bills?
Energy conservation measures:
Why has my electric bill gone up?
Despite recent increases, electric rates for the typical member have risen on average one and half percent (1.5%) per year over the last 28 years. Our challenge locally is to keep rates affordable, electric service reliable, and the co-op in a solid financial position (while power costs continue to rise) so we can continue to provide you with the electricity to turn on your lights, or heat your home, while still meeting financial requirements set by lenders.
The GRE Wholesale Power Cost Rider that's been added into the basic energy rates is a result of the additional costs that have been passed on to our co-op by Great River Energy, our power supplier since January 2008. This additional cost, which has been rolled into the seasonal energy charges, help Lake Country Power recover the additional costs that have been charged by GRE. The additional cost for 2014 is 3.68 cents per kWh, and is automatically reflected in your energy charge.
GRE cites several reasons for the cost increases:
- Reduced non-member sales: Great River Energy sells excess electricity to other utilities, which offsets a significant portion of their fixed costs. Since 2001, GRE has invested more than $1 billion in power plants and transmission facilities to meet the peak demand of its member systems. However, there has been little need for surplus power in the “market” since January 2008, and that means the fixed costs of those power plants and transmission facilities are shared across fewer sales to co-op members.
- The impact of wind: GRE has added 200 megawatts of wind energy, but adding wind energy requires other types of generation to back it up, because the wind does not always blow. This “overlapping” investment has driven up power costs. Minnesota utilities are required to generate 25 percent of their electricity from renewable resources by 2025, at a time when consumers are using less electricity.
- Increased cost of fuel: Additional expenses come from the rising cost of fuels such as coal and a host of new regulations set by the state and federal government. These include the renewable energy standard and stringent environmental controls. Increasing fuel costs have had an impact on operations.
Lake Country Power received ten proposals from seven different suppliers in 2009, including Minnesota Power. The cooperative is projected to purchase almost $125 million in wholesale power over the next three years and market conditions have prices at lows not seen in many years.
The “reward” was a projected first year savings of $0.15 (fifteen cents) per month to a typical residential member. The projected savings over the remaining two years steadily declined to almost zero by the end of the contract.
With the reward however, came additional risk: The lowest evaluated proposal still subjected the cooperative to power cost adjustments, price increases, renewable energy requirements and transmission delivery risk. The risks and unknowns do not outweigh the projected savings from an alternate supplier that has essentially the same price and contract terms and conditions as the current supplier.
While the cooperative will continue to purchase 100% of its power requirements from GRE for the time being, we will closely monitor the marketplace while we fully engage GRE in its efforts to control costs.
Lake Country Power’s rates are very competitive with other electric cooperatives in northern Minnesota. One significant difference between Lake Country Power and investor-owned utilities (like Minnesota Power), or city-owned utilities, is that the other utilities average between 35 and 55 customers per mile of line. Lake Country Power averages six members per mile. The costs for line construction and system maintenance are the same, but we have fewer consumers per mile to pay for the line, customer service support, materials and equipment.
(See questions/answers directly above).
Electric co-ops were formed years ago because there wasn’t enough return on the investment for other utilities to serve rural areas with electricity. That’s why co-ops were formed … and that’s why we’re still here today. Our job is to provide safe, reliable and affordable service on an at-cost basis in areas that don’t provide the return that other utilities, like investor-owned energy providers, prefer.
Co-ops, like Lake Country Power, are cost-based electric utilities and our charges to you are only for the costs of providing the electric service to your residence (or business). After expenses for providing your electricity are paid, the money left over (the margin) is set aside for all members who purchased electricity during the year as Capital Credits.
What is the Service Availability Charge?
The monthly fee recovers a portion of the local co-op cost of delivering electric energy to members. Part of our “fixed” costs are also collected through the kilowatt-hour charge.
- It accounts for the co-op’s investment in equipment like poles, wires and transformers, as well as labor to provide members with safe and reliable electric service.
- It supports fleet, facility and customer service functions, such as line maintenance, right-of-way clearing, member service support and administrative responsibilities.
- It’s similar to monthly fees that other utilities charge (such as telephone service providers).
If one member uses only one kilowatt-hour of electricity and another member uses 1,000 kWh, the cooperative still incurs the same cost to build the line, maintain the distribution system and deliver electricity to both customers. The co-op’s rates are set to recover costs as fairly as possible so you have lights, heat or other comforts provided by electricity when you need it, regardless of how much energy is used by individual members.
- Overall, Lake Country Power’s rates are comparable to other cooperatives in northern Minnesota
- Some utilities have higher monthly fixed service availability charges, while others blend a lower facilities or service charge with a higher energy (kWh) charge. Most utilities also include a power cost or resource adjustment.
- If we had higher density (more members on our system) it would help lower the overall fixed costs (the service availability charge) for each consumer on the system.
- Lake Country Power averages less than six members per mile of line. We maintain more than 8,100 miles of line.
- Utilities that serve cities, towns and higher density areas typically average between 35 and 55 consumers per mile. The higher density helps offset the monthly costs for equipment like poles, wires, transformers and maintenance as well as service to consumers on a utility system. A rural system like ours that averages six members per mile of line doesn’t have the same consumer density as a city, suburb or town to help spread costs across the system.
- The costs for line construction and system maintenance are the same, but we have fewer consumers per mile to pay for the line on a rural system.
- Lake Country Power serves primarily rural residential areas.
- Nearly 95% of our membership base is residential and seasonal. Some electric companies serve large commercial and industrial accounts, which benefit the utility and its other customers because of the revenues generated from the commercial/industrial facilities. Because of the limited commercial/industrial load on our system, our members do not benefit from such a luxury.
- Utilities that serve cities, suburbs, towns and high-density areas typically average between 25 and 55 consumers per mile. The higher density helps offset the monthly costs for equipment.
• Minnesota Power averages 23.55 consumers per mile and $82,221 in revenue per mile
• Nearby municipal (city-owned) utilities average 42 consumers per mile, and $71,000 per mile of line
• Lake Country Power averages 6 (six) consumers per mile, and generates $8,000 per mile of line
Lake Country Power offers a number of options to help you manage your power bill.
- rebates for energy efficient appliances
- budget billing, which evens out your payments year-round and provides a way to manage your monthly bill and your monthly budget
- home energy assessments and audits
- low-cost Energy Wise heating and cooling programs (even with a slight increase projected in 2012, we expect electric rates for load control programs will remain very competitive in comparison to other fuels)
- automatic payment options – with LCP Easy Pay, an automatic monthly bank drafting option
If you are interested in learning more about these services, contact us at 800-421-9959.
- Set your thermostat to the lowest comfortable temperature setting in the winter
(Dept of Energy recommends 68 degrees)
- Insulate your water heater
- Caulk around doors and windows
- Repair leaking hot water faucets
- Turn off lights when you leave a room
- Wash and dry full loads of laundry (or air-dry loads, but don’t overload the dryer)
- Lower the thermostat on your water heater to 120 degrees F
- Replace or clean your air filters once a month
- Invest in energy-efficient equipment. When upgrading look for the ENERGY STAR® symbol
- Check out our residential in-home energy assessments and other practical energy-saving ideas online.
What is the Service Availability Charge?
This monthly charge is a flat fee designed to recover a portion of the cost of delivering electric energy to all members. It's reflective of the investment in poles, wires, transformers and equipment that it takes to provide you with electric service. It also supports fleet, facility and customer service functions, such as line maintenance, right-of-way clearing and general administrative responsibilities and is similar to monthly service charges that other co-ops and utilities charge. Regardless of how often you flip on the light switch or the TV, these costs are part of the bill you pay so that electricity is available to you whenever you want it.
If one member uses only one kilowatt-hour of electricity and another member uses 100 kWh, Lake Country Power still incurs about the same cost to build the line, maintain the distribution system and deliver electricity to both customers. It takes just as much equipment to deliver one kilowatt-hour as it does 100 kilowatt-hours. This is why the monthly service availability charge is important to recover a portion of the cost of delivering electricity to all members and help maintain the financial health of the cooperative.
Why is my bill sometimes estimated?
All co-op members have automated meters, but your bill could be estimated because:
- The electronic “noise” and interference within your home or cabin can prevent your automated meter from being read.
- There may be a large industrial site nearby, which causes interference with automated readings occasionally.
- A storm or lightning may have caused interference to Lake Country Power’s electrical system before the automated meter reading would have been taken.
- You may have turned off the breakers, which prevents any available readings from off-peak and other Energy Wise meters.
- If you’re a seasonal member, you may have shut off the breaker panel. Your main automated meter will still send meter readings automatically, however your off-peak and other Energy Wise meters won’t work and an estimate will need to be figured for your bill.
If meter readings are estimated for two consecutive months, Lake Country Power personnel will be scheduled to read your meter, except in cases where the member has turned off power to the meter or the meter is seasonally inaccessible. You are welcome to read your meter(s) and report them directly to our office. Readings may be reported on our Web site or by calling 1-800-421-9959.
Why doesn’t my payment show up on my bill?
If a payment is received after the due date, it may not have been credited to your account before the bill was processed, printed and mailed. If this occurs, please call the call center or billing department to ensure payment was received and ask for the actual balance.
Why is my bill so different than my neighbor’s bill?
Your energy bill is a direct reflection of your usage. Your neighbor has a completely different set of circumstances—a different home, different types of electrical appliances, and contrasting electric usage patterns.
I was on vacation last month so why isn’t my bill less this month?
Even when you’re away from home, appliances continue to use energy—the water heater maintains water temperature, refrigerators and freezers keep food cold, clocks keep time, ventilators circulate the air, heating and air conditioning equipment maintain house temperature. Periods directly before and after a vacation often include intense energy use through clothes washing and drying, water use, etc.
Why do my bills fluctuate?
Bills often fluctuate because your utility use more than likely varies from month to month. Factors that affect utility use include the number of people in the household, new or additional appliances or vacations.
Bills also fluctuate with the weather. When the weather is hot and humid, consumers tend to use more energy and require additional power for air conditioning, fans and refrigeration equipment. The same concept applies in cold weather. We use additional energy to heat our homes and operate heating appliances. The spring and fall months are traditionally lower energy use for most homes.
Why am I asked for personal information?
All utility companies are required to establish identity theft prevention programs in order to comply with the Federal Trade Commission (FTC) “Red Flags” rule. A red flag is a pattern, practice or activity that indicates the possible existence of identity theft.
All utilities are required to take additional steps in order to verify identity. Whether you apply for new service or transfer your service into another name with Lake Country Power, we will run a verification and credit check to confirm the validity of your identity and establish a deposit amount. We will ask you several key personal questions before discussing any information on the phone. These questions will be personal account information and one will include a secure password.
The end result is that the new Red Flags Rule will now require more of members and the cooperative, due to the criminal activity linked to stealing the identity of others. Although the extra precautions may seem inconvenient, the intent is to help protect our members and do our part to help prevent identity theft from happening.
How will AMR affect my home-based HAM radio system?
Our system is not broadband over power line and will not interfere with ham radio because it’s at a much lower frequency.
How will AMR affect my satellite system?
It should have no effect. Our carrier signal over the power lines is at a much lower frequency than satellite communications.
How will this technology affect my rates?
Lake Country Power performed an extensive cost analysis before implementing the system. We identified efficiencies and savings that offset the installation costs over the life of the system. It should not affect your rates.
What is the durability of the new meter?
The new electronic meter meets or exceeds all standards for electric utility use. It has no moving parts and is built for long life. We have had experience with commercial electronic metering for twenty years with proven durability.
Now that I no longer need to read my meter, what billing options does the cooperative offer that will help me pay my bill?
Lake Country Power offers LCP Easy Pay and Budget Billing. Members can still read the LCD display on the meter to double-check billing or verify their own usage. Lake Country Power now offers online payments and credit card payments as additional billing options.
How do I read my new digital (AMR) meter?
Your automated meter provides a six digit reading to Lake Country Power for you. Your energy usage is the difference from the previous reading to the current reading submitted to the co-op by the meter. For example, if the previous reading was 001623, and the present reading is 002423, the difference in numbers is the kilowatt-hours of energy your household used. In this case, the usage would be 800 kWh.
I’m a commercial member. My electric meter is flashing numbers. How do I read this meter?
Commercial type CT meters are programmed to flash numbers. It’s normal for the meter to flash three set of numbers: 888888, 000000, and 001938. The third time is the kilowatt-hour reading you need to report for your usage. If you’re a commercial member and have additional questions about this type of meter, please contact a Member Service Supervisor at 800-421-9959.
Because Lake Country Power is a cooperative, owned by its members, it does not earn profits. Instead, any revenues over and above the cost of doing business are considered “margins.” These margins represent an interest-free loan of operating capital by the membership to the cooperative. This capital allows Lake Country Power to finance operations and — to a certain extent — utility construction, with the intent that this capital will be repaid to you in later years. We have provided answers to some questions for a better understanding of capital credits.
WHAT is the difference between allocated and retired capital credits?
Allocated capital credits appear as entry on the permanent financial records of the cooperative and reflect your equity or ownership in Lake Country Power. When capital credits are retired, a check is issued to you and your equity in the co-op is reduced.
HOW often will I receive an allocation notice?
You will receive an allocation notice annually after the finances for the previous years financial statements have been completed and audited.
For example, in July and August 2013, Lake Country Power administered a $5.4 million allocation of 2012 margins in the form of capital credits in accordance with the cooperative’s bylaws. The allocation represents your respective share of Lake Country Power’s 2012 net margin and patronage capital allocated to Lake Country Power by Great River Energy. Allocation notices were mailed in July and August.
The line items represent the amount of margin allotted to your capital credits account, based on the amount of electricity that was used during the year. Until capital credits are retuned in the form of a cash retirement, your allocation is invested to improve the reliability and service of your cooperative.
Your capital credit account represents your share of ownership in the co-op, and is used to reduce the amount of bank financing for equipment like electric lines, utility poles, substations, transformers and trucks.
WHEN will I receive my next capital credit payment?
A capital credit retirement most recently happened in December 2010. Retiring capital credits on an annual basis is a long-term strategic goal set by the Board of Directors.
HOW are capital credits calculated?
The amount of capital credits you earn in a given year is based upon the amount of capital you contribute to the cooperative through payment of your monthly bills. The more electric service you buy, the greater your capital credits account — although the percentage will remain the same. The sum of your monthly bills for a year is multiplied by a percentage to determine your capital credits.
WHAT percent of my bill is returned as capital credits?
The percentage of your total payment that is allocated as capital credits varies from year to year, depending upon the financial health of the cooperative. Capital credits are only allocated for a year in which Lake Country Power earns margins.
WILL I receive a capital credit "credit" on my bill every year?
Not necessarily. The Board of Directors must authorize a retirement before you receive a credit on your bill. When considering a retirement, the Board analyzes the financial health of the cooperative and will not authorize a retirement if Lake Country Power can not afford it.
WHAT do I have to do to start accumulating capital credits?
Capital credits are calculated by Lake Country Power for every member who purchased electricity during a year in which the utility earned margins. No special action is required to start a capital credits account. Your membership activates your capital credits account. If you are billed for service for even one month, you will accumulate some capital credits if Lake Country Power earned margins in that year.
CAN I use my allocated capital credits to pay my electric bill?
No. Allocated capital credits may not be used to pay current bills. Billing statements represent a current payment due. Capital credits accumulate over time and are used as working capital for the cooperative.
WHAT happens to the capital credits of a member that dies?
The capital credits of a deceased member may be paid on a discounted basis without waiting for a general retirement. A representative of the estate must request the credits by submitting a certification of entitlement form and a copy of the death certificate.
WHY discount early retirements?
By discounting special retirements, such as estates, the cooperative can make a payment sooner than it otherwise would without unfair cost to other members of the cooperative. Discounting special retirements reflects the time value of money and provides a fair way to recognize special circumstances while continuing to treat members equitably.
WHAT is the “time value of money” and why is it applied to early retirements of capital credits?
This commonly accepted accounting method allows for the valuation of money in the future to be adjusted for today’s value by providing a lump-sum "present value" of the entire amount. Said differently, it factors in the value of money and a typical amount of interest for a given amount of time. For example, $100 of today's money held for a year at 5 percent interest is worth $105, therefore $100 paid now or $105 paid exactly one year from now is considered the same amount of money paid out.
WHAT happens to my capital credits when I leave the Lake Country Power service area?
They remain on the books in your name until they are retired. You should make sure that Lake Country Power always has your current mailing address to ensure the co-op’s records are up-to-date when retirement checks are issued.
What should I do if I can’t pay my bill?
If you can’t pay your bill in full, you can request a payment arrangement to fulfill your obligation over an extended period of time. Simply contact Lake Country Power at 800-421-9959 and someone can help you get started.
If your income is limited, we have a list of heating assistance providers that may have resources available if you meet the qualifications.
Can I pay my bill online?
Yes! This service is available for all members. It's called SmartHub, and you'll find the link under "My Account."
What other payment options does Lake Country Power offer?
LCP Easy Pay is a free electronic funds transfer program that can help simplify your life and save you a stamp each month. Payments are automatically deducted from your checking or savings account or from your credit card on the due date each month. You can download an LCP Easy Pay application here or request a form by calling 800-421-9959.
Budget billing can be used to level out your power bill over the course of a year. Monthly bills are based on your energy usage for the previous year and averaged out so you pay the same amount each month. Budget bill amounts are re-evaluated two times each year, in the months of March and August. Regular, on-time, monthly payments will be required to utilize the benefits of the budget billing program. Late or missed payments of your monthly amount due may result in being removed from the budget program. Should this occur, we offer automatic payment options as a free service to our members.
You can request a budget billing application by calling 800-421-9959.
How do I start a new service with Lake Country Power?
You can start your utility service by submitting a New Service Application to one of our new service representatives in Grand Rapids, Mountain Iron or Kettle River.
How do I transfer my service?
You can transfer your utility service by submitting a Service Transfer Application to Lake Country Power’s Call Center.
What do I need to know about CFLs?
Even though compact fluorescent lights contain a small amount of mercury (5 milligrams or less), Minnesota state law requires they be recycled and not thrown in the trash. Now co-op residential members can take their CFLs to Menards for free recycling!
How to clean up broken CFLs - MN Pollution Control Agency
Lake Country Power’s service area is loaded with trees. Why don’t you bury all your power lines in the ground to avoid contact?
Underground power lines don’t eliminate outages and can result in longer outages in normal weather. Underground lines are susceptible to failure caused by digging, animals, lightning strikes, frost movement and normal shifting patters with soil and rock. Damage to underground cables takes more time and money to locate and repair.
People, Property and Power Lines: This brochure provides frequently asked questions and answers from Great River Energy about transmission power lines on or near your property.