Rates

OCEC’s rate classes are grouped together during a Cost of Service Analysis (COSA) and the cost of the service for that group is compared to the revenues collected from that same class. For each rate class there can be a separation that develops between the cost to provide services and the revenues collected from those services. A “subsidy” can occur when one or more rate classes are paying more than the cost and one or more rate classes are paying less than the cost of those services.

No, we have modeled these rate design changes to be revenue neutral meaning OCEC should not receive more revenues from our membership compared to status quo.

The COSA study identified the following rate classes as being out of alignment with the cost of service:

Rate Classes Paying Less Than Cost of Service

• General Service 1 (G1)
• Irrigation Single Phase
• Irrigation Three-Phase
• Idle Service

Rate Classes Paying More Than Cost of Service

• General Service 2 (G2)

The OCEC Board approved the following rate changes:

January 1, 2025

• General Service 1 (G1) – Increase energy rate by $0.0030 per kWh (3.26% increase)
• General Service 2 (G2) – Decrease energy rate by $0.0030 per kWh for tier 1 (4.55% decrease) and tier 2 (3.49% decrease)
• Irrigation Single Phase – Increase energy rate by $0.0050 per kWh (8.90% increase)
• Irrigation Three-Phase – Increase energy rate by $0.0050 per kWh (8.90% increase)
• Idle Service – Increase base charge by $16.80 per month (86% increase)

January 1, 2026

• Irrigation Single Phase – Increase energy rate by $0.0050 per kWh (8.17% increase)
• Irrigation Three-Phase – Increase energy rate by $0.0050 per kWh (8.17% increase)

January 1, 2027

• Irrigation Single Phase – Increase energy rate by $0.0050 per kWh (7.55% increase)
• Irrigation Three-Phase – Increase energy rate by $0.0050 per kWh (7.55% increase)

January 1, 2028

• Irrigation Single Phase – Increase energy rate by $0.0050 per kWh (7.02% increase)
• Irrigation Three-Phase – Increase energy rate by $0.0050 per kWh (7.02% increase)

Demand is a measurement of the maximum amount of power required during any 15 minute interval within a billing period, measured in kilowatts (kW). Simply put, energy is the amount of power you consume, while demand measures your impact on our electric distribution system to deliver that power. The more appliances you run at the same time, the more your demand for power increases.

The demand charge is not a new charge. It has always been embedded in the energy rates. OCEC is now separating out the demand charge from the energy charge. This will allow OCEC to assign costs that are directly related to demand, and not based on total energy consumption. These are the costs related to maintaining the distribution system.

Members will still see an energy charge that is based on the total amount of energy they consume during a billing period. However, the energy charge will be reduced once the demand charge is separated out.

The new unbundled rate structure with separate demand and energy charges will allow Members to see exactly how much they pay for the energy they actually consume (the energy costs from PNGC Power, our wholesale power provider), and how much they pay toward the costs that OCEC incurs to deliver and distribute that energy to them.

The demand charge is a variable charge that covers the costs of maintaining the distribution system, including poles, wires, substations, trucks, and line crews. It is based on the energy demand during a billing period, and is calculated by taking the highest demand recorded in a billing period (in kW) and multiplying it by a demand rate.

The more high-energy appliances a member uses at the same time within a fifteen-minute period, the higher the demand.

The demand charge enables OCEC to recover the costs of maintaining the distribution system.

A Member who uses a high demand requires more services from OCEC, including additional capacity, which means a higher expense for lines, transformers, substation equipment, etc. OCEC uses the demand reading to determine the maximum energy (or maximum capacity) required by our Members.

This information is used to develop a system that is able to meet the Member’s highest peak demand. Members may not be using the OCEC system at maximum capacity all the time. However, OCEC is still required to maintain the system so that it is ready to provide service to Members at maximum capacity, at any time of the day.

Generally, every 2 to 3 years, OCEC performs a Cost of Service Analysis (COSA) which calculates the total revenues required by OCEC to meet its planned expenses. The COSA also calculates the cost to serve each rate class to determine how much revenue each class should contribute to the total. The COSA recommends to the OCEC Board of Directors what the demand rate should be. Through the rate review process, the Board then sets the rates for our Members.

This is not a rate increase. This change is designed to be revenue-neutral. OCEC will not receive additional revenues from this change.

The demand charge is unbundled from the energy charge. When we do this, the energy charge will also be reduced to compensate for the change.

OCEC has charged demand to Members in the G3 and G4 rate classes since our last rate design change over ten years ago.

Starting in 2025, prior to demand charge implementation, G1 and G2 Members’ bill will include a line item showing peak demand for the month but with a zero charge for demand. Members will have the ability to view their monthly peak demand and modify their usage, if they so choose, before the charge is implemented. This will allow them to see how modifying their usage might impact their demand and the demand charge.

Beginning in 2026 OCEC plans to charge demand to G1 and G2 rate classes with the following amount and schedule:

• January 1, 2026 – $0.25/kW demand rate
• January 1, 2027 – $1.00/kW demand rate
• January 1, 2028 – $2.50/kW demand rate

Each demand rate increase will be accompanied by an energy rate decrease. Please see the table following this FAQ for a full listing of the proposed base, energy, and demand rates for G1 and G2 rate classes through 2028.

With the current rate structure, Members who use more energy generally pay disproportionately more for the demand charge than Members who consume less energy. This is because the demand charge is embedded into the energy rates. Therefore, when their energy consumption increases, the demand charge automatically increases, whether or not the Member has a high demand usage.

On the other hand, Members who have lower energy consumption generally pay less for the demand charge because it is built into the energy rates, even if their demand use is high. In effect, they are paying less than their fair share for using the OCEC system.

The new rate structure is designed to be more transparent and equitable. The goal is to ensure that all Members are paying their fair share of using the OCEC system, and that OCEC has a way to assign costs that are directly related to demand use, and not based exclusively on total energy consumption.

The impact of separating out the demand charge from the energy charge will vary from Member to Member. Some Members will see no changes, some will see an increase in their bill, while others will see a decrease. This will all depend on their demand and energy consumption, or in other words, how much energy they use each month and their usage habits will affect their bill amount. The impact can also fluctuate from month to month based on these factors.

The Rate Calculator found in the first section of this Rates page will allow Members to view recent months to compare current bills to the future rate design through 2028. This calculator will be updated with monthly data as we move through 2025.

The demand charge is calculated based on the average peak demand usage during any fifteen-minute interval within a billing period. Spreading out activities that require a lot of energy throughout the day instead of doing them all at once will help reduce your average peak demand, which will lower your demand charge on your electric bill. The goal is to level out your load. For example:

• Operate your electric stove, oven, washing machine, clothes dryer, dishwasher, car charger and other large appliances at different time intervals throughout the day, and not all at once. You could start your washer or dryer after cooking, and try not to run your washer and dryer at the same time.
• Turn off non-essential lights and appliances when not in-use.
• When possible, adjust your thermostat to reduce heating and cooling.

Common Appliances KW Demand List

Yes. As of January 2025 the date of your demand reading is listed on page 2 of your monthly statement. We are working with our billing software provider to add the time of the demand reading to the bills as soon as possible.

Each charge on the electric bill covers different costs associated with providing electrical service to the Membership.

• Energy charge – A variable charge to cover the cost of energy used in the billing period, measured in kilowatt hours (kWh). It is intended to cover the costs of purchasing power from our wholesale power and transmission provider.
• Base charge – A flat fee to cover the fixed costs of operating the utility. Examples include the office building, billing and metering systems and equipment, office personnel, taxes, and debt service.
• Demand charge – A variable charge based on the highest rate of electric use during the billing period, measured in kilowatts (kW). It covers the costs of maintaining the distribution system, including poles, wires, substations, trucks, and line crews.

OCEC has 4 General Service rate classes that Members are placed in based on annual energy usage over the previous year:

• General Service 1 (G1) – Up to 1,200 kWh per month (up to 14,400 kWh per year)
• G2 – 1,200 kWh to 5,000 kWh per month (14,400 kWh to 60,000 kWh per year)
• G3 – 5,000 kWh to 200,000 kWh per month (60,000 kWh to 2,400,000 kWh per year)
• G4 – above 200,000 kWh per month (2,400,000 per year and above)

At the end of each year OCEC staff reviews annual usage and places Members in the appropriate rate classification. A notification is sent to each Member being moved from 1 rate classification to another.

Beginning on January 1, 2026, OCEC proposes to add annual peak demand thresholds in addition to the energy thresholds to the General Service rate classes in the following amounts:

• G1 – Up to 20kW of annual peak demand
• G2 – Over 20kW and under 40kW of annual peak demand
• G3 – Over 40kW and under 100kW of annual peak demand
• G4 – Over 100kW of annual peak demand

These annual peak demand thresholds will be added to the existing annual energy thresholds, and OCEC will place Members in the highest rate class based on annual energy usage or annual peak demand.

Annual peak demand is the highest recorded demand billing determinant for the previous calendar year. The demand billing determinant is the highest average kW across a fifteen-minute period, the same billing determinant that is in use currently for demand charges.

Annual peak demand is the highest recorded demand billing determinant for the previous calendar year. The demand billing determinant is the highest average kW across a fifteen-minute period, the same billing determinant that is in use currently for demand charges.

For the majority of Members this will not have any impact on their bill and the majority of Members will stay within their same rate class. For some Members, especially those with high peak demand usage but infrequent energy usage or homes with net metered distributed generation, this change may result in moving rate classifications into a higher General Service rate.

OCEC will begin putting monthly peak demand on the monthly bills as soon as possible. We are working with our software vendor to complete that change. OCEC encourages Members to review their monthly peak demand during the upcoming winter to determine whether they would be placed in a different General Service rate classification starting next January 1, 2026.

OCEC staff will also be reaching out to Members who may see a rate classification change of more than one (i.e. G1 moving to a G3) and discussing their specific situation with them. The OCEC Board has approved not moving any one Member more than one rate classification higher per year.

The same strategies used to lower Member’s monthly peak demand can be utilized to maintain low annual peak demand.

Common Appliances KW Demand List

Yes. If your Member-owned generator is producing energy during your peak usage the net value is recorded and your peak demand is lowered by the generation. For our most common Member-owned net-metered projects, rooftop and ground-mount solar, we would expect a reduction in monthly peak demand during the summer months. These same generators generally do not produce power during winter peak demand periods we see on our system. These winter peak demand periods are 6am-9am, typically.