Proposed Rate Change

Victory Electric Board of Trustees Proposes Rate Change

Victory Electric members have not had an energy rate increase for nearly 10 years, but an independent rate consultant has determined that a rate change is necessary to ensure that Victory will remain financially healthy, now and in the future.

After considering the results of the Cost-of-Service Study, the board has proposed adopting a three-part rate structure. This would add a demand charge to our existing service availability and energy charges. Energy is the amount of power you consume over time. Demand is the amount of electricity needed to power all the electric appliances drawing energy in your home or business at a specific point in time.

Victory Electric’s rates are set to bring in enough money to pay operating costs, make payments on loans, and provide an emergency reserve. A cooperative does not earn profits; instead, when revenues exceed the expense of providing electric service it is considered “margins” and returned to you in the form of “capital credits.” Capital credits are the difference in operating costs and revenues and denote each member’s ownership of the cooperative. The margins represent a contribution of operating capital by the membership to the cooperative with the intent the capital will be retired (repaid) to you in later years.

Rate Setting

Three-Part Rate Proposal

A three-part rate would better align Victory members’ bills with how Victory is billed by our wholesale power supplier. Victory is charged based on peak demand in kilowatts along with total energy usage in kilowatt-hours.
This rate design would also distribute energy costs fairly among our rate classes so members pay for the costs they create. This prevents members with lower demand needs from subsidizing members who draw greater amounts of power at once.
A three-part rate gives members more control of their bills. Households and businesses can reduce their demand by spreading out appliance usage

Click here to learn more about the Demand component

Join us at any of these meetings to learn more about the proposed changes:

Monday, Oct. 12 at 5:30 p.m. - TBD

Tuesday, Oct. 13 at 5:30 p.m. - Board of Education Room, Ingalls USD 477; Ingalls, KS

Wednesday, Oct. 14 at 5:30 p.m. - American Legion Building, Bucklin, KS

Monday, Oct. 19 at 5:30 p.m. - TBD

Thursday, Oct. 22 at 5:30 p.m. - St. John Parish Center, Spearville, KS

Friday, Dec. 18 at 8:30 a.m. Board Meeting and Vote - Victory Corporate Office

Proposed Rate Schedules

*MKEC is defined as the “certified territory” served by Aquila Inc. prior to the 2007 acquisition of assets by Mid Kansas Electric Company, LLC.

*Coop (Legacy) is defined as the area located within the “Victory Electric certified territory” established by the KCC per Chapter 66 of Kansas State Statutes.

*Proposed summer rate June 1 - Sept. 30 vs current summer rate June 1 - Aug. 31, to align with Victory's billing from our wholesale power provider.

Frequently Asked Questions

A COSS is a fundamental tool for evaluating how and why costs are incurred. Residential and commercial rate classes have unique load and service characteristics that affect costs for those classes. The consultants apply standard regulatory methods to analyze service costs for each Victory Electric rate class. The consultants also determine the cooperative’s revenue requirements for paying expenses and having adequate margins, then provide impartial recommendations based on their findings. More information about the COSS be found in the May Kansas Country Living CEO article here.

Victory’s Board of Trustees set the cooperative’s electric rates. Trustees are Victory members who pay the same rates as you. They are elected by you and other members each year. Trustees want to ensure electric rates are adequate to maintain the health of Victory Electric Cooperative, provide the necessary revenue for delivery of reliable electric service and avoid subsidization between rate classes. We certainly want to avoid rate increases, but we also need to ensure the long-term financial health of the cooperative.

Like other Kansas rural electric cooperatives, Victory Electric is a self-regulated utility. This does not mean the cooperative is unregulated. It means that instead of the Kansas Corporation Commission (KCC), the Board of Trustees fulfills the regulatory role of setting reasonable, equitable rates and establishing fair electric service policies for the cooperative.

The service availability charge increase was necessary to recover fixed costs, such as the cost of poles, wire, transformers and other essential equipment, maintaining the electrical distribution system, tree trimming and billing and administrative costs. If one member uses only one kilowatt-hour (kWh) of electricity and another member uses 100 kWh, Victory still incurs the same cost to build the line, maintain the distribution system and deliver electricity to both customers. It takes just as much equipment to deliver 1 kWh as it does 100 kWh of energy. An increase in the customer charge was needed to recover a portion of the cost of delivering electricity to all members and help maintain the financial health of your cooperative.

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