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Vermont Public Utility Commission Approves 2.91% Rate Increase for Washington Electric Cooperative

Strategic Insights

— 1 min read

The Vermont Public Utility Commission has approved a 2.91% rate increase for Washington Electric Cooperative, effective January 1, 2025. The rate increase is driven by rising costs related to property taxes and employee salaries and benefits. The cooperative's financial analysis demonstrated a need for the rate change, which will help it to meet its loan covenants with the National Rural Utilities Corporate Finance Corporation and the Rural Utility Services.

Key Takeaways:

  • The rate increase is limited to 2.91% and will be applied equally to all customers.
  • The increase is within the 10% threshold for cumulative rate increases from the last rate change approved by the Commission.
  • The rate change will be effective January 1, 2025, and is subject to the standards and procedures adopted by the Commission.
  • The cooperative's financial analysis demonstrated a need for the rate change, which will help it to meet its loan covenants with the National Rural Utilities Corporate Finance Corporation and the Rural Utility Services.
  • The rate increase will strengthen the cooperative's Modified Debt Service Coverage ratio to 1.35 and its times interest earned ratio to 2.1.
  • The Vermont Department of Public Service reviewed the proposed rate increase and recommends that the Commission allow it to take effect without further hearing or investigation.
  • Three public comments opposing the rate increase were filed with the Commission, citing concerns about affordability and rate comparison with other Vermont distribution utilities.

Statistics:

  • 2.91%: the approved rate increase for Washington Electric Cooperative.
  • 1.35: the Modified Debt Service Coverage ratio required by the cooperative's loan covenants with the National Rural Utilities Corporate Finance Corporation.
  • 2.1: the times interest earned ratio required by the cooperative's loan covenants with the Rural Utility Services.
  • 83%: the amount of WEC's long-term debt held by the Rural Utility Services.
  • 17%: the amount of WEC's long-term debt held by the National Rural Utilities Corporate Finance Corporation.
  • January 1, 2025: the effective date of the rate change.

Sources:

  • Vermont Public Utility Commission, Case No. 24-3408-TF
  • Washington Electric Cooperative, tariff filing for a 2.91% rate increase
  • Vermont Department of Public Service, comments on the rate increase filing
  • Act No. 179 (2024 Vt., Adj. Sess.)
  • Public Utility Commission, Investigation re: standards and procedures (Case No. 21-2642-INV, Order of 10/18/21)
  • 30 V.S.A. 218d(n) and 225

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