Guernsey Seminar Highlights the Impact of New Technologies on Electric Cooperative Rates
Electric cooperatives representing eleven states, including Hawaii, convened for a day-and-a-half seminar at Guernsey. The event, hosted by Guernsey's utility economics and finance experts, centered on the importance of electric cooperatives gaining better insight into the factors affecting their revenue requirements and the best methods to recover costs.
Guernsey explained the purpose and necessity of a cost-of-service study. "Proper ratemaking remains a cornerstone of electric cooperative financials," said Justin Proctor, Vice President and Managing Consultant at Guernsey. "The cost-of-service analysis is the primary tool for determining fair and equitable rates charged to members. A thorough analysis helps cooperatives balance the cooperative's financial needs, and the impact rates have on members."
The seminar drew 41 participants, with many cooperatives bringing a diverse group of professionals, including accountants, engineers, CEOs, and member services, to increase awareness.
"We brought in folks from our service center and operations side, and I think it's good exposure for them," said Ryan Fuhrmann, Director of Finance/Office Operations at Pentex Energy in Muenster, Texas. "They're involved in the data collection that is needed for a cost-of-service study, but I think it's important to understand why we do it and the impact it has… and people from all across the cooperative benefit from understanding just even on the surface, some of the aspects of this study."
The in-person format of the seminar provided a unique opportunity for cooperative leaders to discuss the impact of new technologies on rates.
Juli Orme, General Manager of Cookson Hills Electric Cooperative in Oklahoma, highlighted the changes brought by emerging technologies, particularly electric vehicles (EVs). She questioned whether the existing rate structures were equitable when EV owners, who create higher demand during peak times, pay the same rates as those who do not own EVs. "I just think that times have changed and things are evolving, and we to think differently about how we apply rates," said Orme. "It's not the same as ten years ago – it's just different."
Guernsey's lineup of experienced speakers boasts a collective 80 years of industry expertise. In the past five years, Guernsey's team has conducted over 250 cost-of-service studies nationwide and trained cooperatives from 37 U.S. states in the last two decades.