In the enclosed formal Notice to Ratepayers, Jemez Mountains Electric Cooperative, Inc. (JMEC) is proposing a rate change that is designed to:
- Have the least impact on our lower income members.
- Enable JMEC to meet the revenue benchmarks required by our lenders.
- Balance between the needs of our members for reliable service and low rates and the needs of JMEC to be financially sound so we are able to meet those needs at the lowest long-run costs.
JMEC’s strategic focus for nearly the last 10 years prioritized the lowest practical rates for members above all other operational requirements. This strategy has run its course, bringing the cooperative to a point where its regular operating expenses are more than the revenue it collects through rates. Today, JMEC’s rates do not cover the cost required to maintain our system in good working order and to comply with federal regulations mandating minimum financial metrics.
The revenue shortfall is primarily due to a nearly 14 percent increase in overall U.S. prices since JMEC last changed its rates in 2013. Through diligent cost management, and even cutting, JMEC has kept rates among the lowest of New Mexico’s 11 electric cooperatives served by Tri-State G&T for the last 20 years.
What we are proposing
JMEC is proposing a 9 percent increase. With that, the average (770 kWh) residential member’s bill will increase $5.82 per month when it goes into effect in February 2022. That increase will lower to $3.30 per month just one month later, In March 2022, when Phase 2 of Tri-State’s wholesale power cost reduction goes into effect.
After the proposed rate change goes into effect, JMEC’s rates will be the lowest in this peer group for the average (770 kWh) resident.
As a not-for-profit, cost-of-service electrical service provider, JMEC charges its members what its costs to serve them – no more, no less. That is the cooperative way.
Solar and a strategic focus to better recover fixed costs
In the proposed rate change, the JMEC Board of Trustees made a strategic decision to place the majority of the increase in the Facility Charge while kWh rates will see slight changes. This increases our electrical system’s reliability and safety as it means JMEC will not depend on selling more electricity to cover the cost of maintaining it – increasingly important as we adapt to the state of New Mexico’s policies on solar and step up to support members’ desire for community and rooftop solar projects.
We’re excited about the possibilities opened up by the steady improvements in renewables technology. As it evolves, it is JMEC’s responsibility to ensure our members always have reliable electric service for their health, safety, economic security, comfort and convenience. This includes our members adopting renewable solutions yet who still rely on plugging into the grid when the sun isn’t shining or the wind isn’t blowing.
What is next
JMEC’s professional staff completed an exhaustive review across all departments this year to document the state of the cooperative. There is much that is going very well but of course we turn our attention to addressing deficiencies. A great deal is underway already, including diligent work by the Board of Trustees to make current some woefully out-of-date policies – it sounds boring but it is very important! In some matters it is better to engage a third party, as for a forensic audit of our foundation and other transactional matters to make certain we are performing to the expected best practices. We will be reporting on the progress and outcomes of this work in each of the coming months.
Also in each of the coming months, we will be out in the community talking to members and answering questions about our proposed rate change. If you have questions about this, please feel free to contact Patricia Martinez at 505.3677.1191 or firstname.lastname@example.org or learn more about JMEC’s proposed rate change on our website at www.jemezcoop.org.
Michael W. Hastings