Rate Study & Design

Straight Talk from the Top: Advancing Through the Rate Design Process

As we discussed last month in our "Straight Talk from the Top" series, we're guided by the core cooperative values of fairness, openness, and transparency.

In our initial update, we outlined the five-phase approach to our rate evaluation process, starting with Phase Zero—where our member-elected board diligently monitors the financial health of the co-op, much like a farmer tending to crops amid Kansas weather and financial challenges—and Phase One, where we brought in the experts at Power Systems Engineering (PSE) to conduct a comprehensive Cost of Service Study (COSS). This independent analysis dug deep into our operations, from power supply costs and maintaining our 4,000 miles of lines to ensuring equitable cost allocation across all member groups, whether you're a rural family, a small business owner, or an agricultural operator.

Building on that foundation, I'm here to provide the straight facts on the next steps. With the COSS report now in hand, we've moved forward thoughtfully, always with an eye toward sustaining reliable, affordable electricity.

Let's continue our journey through the phases.

Phase 02: Board Approves a New Rate Design

Following the expert insights from PSE in Phase One, our Board of Trustees carefully reviewed the COSS findings to shape a rate structure that's rooted in fairness and financial stability. Just as we balance costs and revenues in Phase Zero to weather storms and inflation, this phase focuses on translating the study's roadmap into actionable changes.

The analysis highlighted the need to align our rates more closely with our actual costs—like rising interest rates, infrastructure expenditures, purchasing wholesale power, and maintaining our extensive grid.

After thorough deliberation, the Board approved a new rate design that includes a revenue adjustment to bridge a projected shortfall in the next three years.

Initial projections showed about $2.1 million needed, but through internal efficiencies, extending our patronage capital retirement, and adjusting financial targets, we've pared it down to an increase of nearly $1.65 million. This equates to a total increase in revenue of 3.83% over the next three years (2028).

This multi-year rollout proposes updates to demand charges and energy rates, aiming for equity: for instance, low-usage, high-demand residential members may see a slightly higher adjustment to reflect their costs, while consistently higher-usage commercial or industrial accounts could experience more moderate shifts.

These decisions reflect our commitment to minimizing cross-subsidization, ensuring no group unduly shoulders the burden. As fellow members paying the same rates, our Board understands the realities of rural Kansas life—from rising costs and inflation to the need for resilient infrastructure. This phase keeps us on track for long-term investments in grid upgrades, technology integration, and storm readiness, all while upholding the not-for-profit principles.

Phase 03: Co-op Opens Comment Period and Holds Public Meetings

Transparency doesn't stop at the doors of the cooperative—it's woven into every phase, and now we're inviting your direct involvement in Phase Three.

Just as we value members' input in board elections and bylaw changes, this stage opens the floor for your feedback on the proposed rate design. We're planning several meetings throughout Western’s service territory where you can share your thoughts with our staff and board. In addition to the public meeting, more information will be provided through our website. If you are unable to attend a meeting in person, we will have a virtual option.  We are also available via email, mail, or by calling our office. Whether you have questions about how changes might affect your farm's irrigation needs or your household budget, we want to hear them.

To foster open dialogue, we'll host public meetings across our service area, featuring presentations from me and cooperative staff. These sessions will break down the COSS details, explain the rate adjustments, and include ample time for Q&A. Your participation embodies our cooperative spirit of democratic member control, helping us refine the plan to better serve our communities.

As we progress through these phases, remember: this process is about securing a balanced, sustainable future for Western Cooperative Electric. We're not chasing profits—we're powering your daily lives with the reliability and service you've come to expect.

Stay tuned for updates on the remaining phases, and if you have questions now, reach out at 800-456-6720 or visit westerncoop.com.

Together, we're keeping the lights on and the conversation open.

Here to serve,

Nolan Numrich

CEO/General Manager

Western Cooperative Electric

See Phase 00 Video: https://www.facebook.com/share/v/1A81S8oprp/ 

Straight Talk from the Top: Keeping You in the Loop on Rates

As your electric cooperative’s CEO, I believe in keeping you informed about the decisions that may impact your service and your bill. At Western, we’re not just your power provider—we’re your neighbors, committed to delivering reliable electricity while staying true to the cooperative values of fairness, openness, and transparency. That’s why I want to share the first steps of our process to evaluate and, if needed, adjust our rates. We call this “Straight Talk from the Top,” and it’s all about giving you the facts. Over the next few months, I will keep you informed every step of the way, but let’s start by walking through how we monitor our financial health and begin the rate-setting process.

Phase 00: Keeping a Close Eye on Our Financial Health

Running an electric cooperative is a bit like running a farming operation—you’ve got to keep an eye on the weather, the crops, and the budget to ensure everything thrives. For us, that means our member-elected board of directors is always monitoring the co-op’s financial health.

They review detailed reports on our revenue (from your electric bills), our expenses (like purchasing power, maintaining lines, and paying our dedicated staff), and the costs of keeping our system reliable. In Kansas, where storms can knock out power and equipment, staying financially strong is critical to keeping your lights on.

The board looks at trends—like inflation, rising fuel costs for power generation, and the need to replace aging poles and transformers—to see if our current rates are covering what it takes to serve you. They also plan for the future, whether it’s upgrading to storm-resistant infrastructure or exploring new technology to keep our system running as efficiently as possible. If the numbers show a gap between our costs and revenue, the board knows it’s time to act.

This isn’t about profits—co-ops are not-for-profit, owned by you, our members. If Western collects more revenue than is needed, it is returned to our members through capital credits. This is about ensuring we can deliver the reliable, affordable power you depend on, from powering your home to keeping your farm or small business running.

Phase 01: Bringing in the Experts for a Cost-of-Service Study

When the board sees a potential need for a rate adjustment, we move to Phase One: hiring an independent rate consultant (Power Systems Engineering) to conduct a Cost-of-Service study. Think of this as bringing in a skilled mechanic to diagnose what’s under the hood of our cooperative. This expert digs into every detail of our operations—how much we pay for electricity from our power suppliers, the cost of maintaining 4,000 miles of lines across Kansas prairies, and the investments needed to keep our grid modern and reliable.

The consultant’s job is to figure out what it truly costs to deliver electricity to every member, whether you’re a family in a rural farmhouse, a small business in town, or a larger operation like a grain elevator. They analyze how each group uses electricity to ensure our rates are fair and equitable. For example, a household might use power mostly in the evenings, while a business might need it during peak daytime hours. The study helps us design rates that reflect these differences while covering our costs.

The result is a comprehensive report that acts like a roadmap, guiding the board toward a rate structure that keeps Western financially sound without placing undue burden on any member group. It’s a complex process, but it’s rooted in our commitment to fairness and keeping your service dependable, no matter where you are in our service area.

Powered by Transparency

At Western, we know that rate changes can raise questions. That’s why we’re committed to walking you through every step of this process, from monitoring our finances to bringing in experts to guide us. In the coming months, we’ll share more about how we design rates, listen to your feedback, and make decisions in open meetings. You’re not just a customer—you’re a member-owner, and your voice matters.

If you have questions or want to learn more, stop by our office, give us a call, or check out our website at Westerncoop.com. We’re here to keep you informed and powered, now and for the future.

Here to Serve,

Nolan Numrich

CEO/GM