Valley REC

Frequently Asked Questions (FAQs)

Effective July 1, 2009, residential consumers will notice a $6 increase in the basic monthly charge, while commercial accounts will see a $12 increase.

Does this rate increase have anything to do with the relocation of the co-op’s Huntingdon district and corporate headquarters?

Fairly strong growth in kilowatt-hour sales from 1992 through 2005 kept up with inflation and provided the additional revenue the co-op needed to cover rising distribution costs. However, our growth has been fairly stagnant since 2005. At the same time, our costs to operate, maintain and upgrade our electric distribution system have increased significantly in the past few years – up nearly 19 percent since 2005. Thus, the co-op board of directors determined it was necessary to implement an increase.

Regarding the renovated facilities, about five years ago, the board began to grow concerned about the aging of our facility on Standing Stone Rd. A consultant assessed the condition of the buildings and their ability to accommodate future expansion. It was determined that moving would be the more financially prudent solution.

Does this rate increase have anything to do with rate cap removal?

Electric co-ops have a board of directors elected from the membership that establishes rates. Because we are not-for-profit and self-regulating, we have not had to put rate caps in place. Therefore, our consumers will not be affected by the rate cap removal. By the way, the utilities with the lowest rates in our state are still operating under rate caps, which are due to expire in 2010.

How does the new rate break down on my bill?

The new rate will go into effect for residential and commercial bills rendered on or after July 1, 2009. The new rate will go into effect for seasonal accounts on or after October 1, 2009. At that time, the basic monthly charge for residential service will increase from $15 per month to $21 per month. The basic monthly charge for commercial accounts will increase from $40 per month to $52 per month.

What do I get for the basic monthly charge?

The basic monthly charge pays for the cost of providing reliable electric service at your location. This includes maintaining distribution lines and substations, clearing rights-of-way and repairing normal wear and tear on poles and equipment. In addition, the expense of billing consumers and maintaining records, like our capital credits accounts, is divided equally among our membership through the basic monthly charge. This means that, regardless of how many kilowatt-hours are used, each member pays a fair share of the cost of having dependable service ready to use 24 hours a day.

What is Valley REC doing to hold down costs?

We’re always looking for ways to manage costs, which may include volume purchasing, energy efficiency programs, and the implementation of new technologies. (One recent example: We’ve streamlined our billing process to cut down on paper, postage and processing time.) We also remain committed to providing reliable service to our members. Doing so requires that system maintenance programs, such as right-of-way clearing and pole inspection, be continued and investments be made to train our employees, replace aging equipment and rebuild and upgrade our electric distribution system. By the way, did you know that we employ roughly the same number of people as we did 70 years ago? Yet the number of consumers we serve has increased by nearly 20,000 over that same period!

How do Valley REC’s prices compare with other utilities?

Valley’s rates typically fall in the mid-range when compared to most electric cooperatives serving Pennsylvania residents. They are also very competitive when compared to private utilities, although they may not be the lowest due to differences in consumer and revenue density. Valley serves an average of seven consumers per mile of line (providing a little over $10,500 in annual revenue per mile of line), while private power companies average 35 customers per mile (acquiring $62,665 annually).

When can we expect the next rate increase?

As we look to the future, there are many factors that will impact the price we pay for electricity. We do know that our wholesale cost of electricity from Allegheny Electric Cooperative will be going up in the next two years. Based on the information they’ve provided us at this time, we project the generation and transmission rate on your bill will go from 6.52 cents to around 8 cents per kilowatt-hour in 2011. We will remain active in our planning, offering education and training on energy efficiency programs and focusing on maintaining the reliability, quality and integrity of our systems. Raising rates is something we consider only when absolutely necessary.

What are some ways I can manage my bill?

Valley REC offers a number of ways to help you manage your power bill. Some of those services include automatic payment options, levelized billing, energy audits and energy efficiency programs. For more information on improving the energy efficiency of your home or business, visit www.valleyrec.com and click the “Save Energy” tab. And check out the “Programs and Services” link as well. Or you can contact our member services department toll-free at 800/432-0680.

Why didn’t the co-op give us more notice about the increase?

It is our goal to pass pricing information on to our members in a timely manner using a variety of methods. We addressed this increase at our district nominating and annual meetings (February and April, respectively), published information in our publications (beginning in March), and sent an official notice by mail. We believe these methods ensure our members receive as much notice as possible and remain well informed.

What is the co-op doing to promote renewable energy sources?

Ensuring your future electric needs and protecting our precious natural resources are two things we take very seriously.

• We are proud to be part owners of the William F. Matson Generating Station at Lake Raystown, the first hydroelectric project in Pa. to be certified by the Low Impact Hydropower Institute, a non-profit organization that helps ensure environmentally responsible hydro power production.
• We have supported 11 renewable projects so far. They include seven windmill projects, three large solar projects and one methane digester.
• In an effort to promote energy conservation, we offer free energy audits and low-interest loans for energy conservation projects.
• Valley is a member of the National Rural Electric Cooperative Association (NRECA), which participates in the Ag Energy Working Group, a coalition of 400 organizations focused on generating 25 percent of our nation’s energy from renewable, homegrown resources by 2025. NRECA also works to develop renewable energy partnerships with the federal government.