Winter Tax Exemptions
According to the Minnesota State Department of Revenue, electricity sold for residential use is not taxable for the billing months of November, December, January, February, March, and April when sold to metered customers who use it as their primary source of residential heat. If more than one type of heat is used, natural gas or electricity is not taxable if it is the primary source of heat. Primary source of residential heat is the source that supplies more heat than any other source for the largest period of time during the heating season. View the Sales Tax Fact Sheet here.
Service Availability Charge
As a member owned cooperative we do our best to ensure the costs of our facilities (poles, wires, substations, meters, bucket trucks) and the operation of these facilities are spread equally among our member owners. Doing so allows us to provide equally reliable service and creates fairness.
The service availability charge is used to recoup these costs no matter much energy each member consumes. If the board of directors sets the service availability charge too low, then energy rates must go up. Members with low usage would not pay there fair share of the cooperative’s fixed costs to provide them service. At the same time, users of greater amounts of electricity would really be paying too much and subsidizing those who use very little electricity.
Two common misconceptions about the service availability charge.
The service availability charge is harmful to those on limited or fixed incomes.
In general, this is not accurate. Limited or fixed income members typically can not afford home improvements or higher efficient items to help reduce the amount of energy they consume. Therefore, the energy usage is the same and/or sometimes higher than an “average” residential member. An appropriately priced service availability charge helps keep the bills, for not just limited or fixed income members but all members, fair.
The service availability charge is out of line compared to that of Xcel Energy, Minnesota Power, or the local municipal utility.
The service availability charge is reflective of a utility’s fixed costs. Fixed costs are those items required to provide electrical service regardless of use. Whether consumption levels are high or low, a utility must own poles, substations, meters and bucket trucks to provide electric service.
The difference is with the number of members (customers) a utility has per mile of line it must own, operate and maintain. At Arrowhead Cooperative we average approximately 5 homes, cabins, or businesses per mile of line to pay our fixed costs. Compare that to a utility providing service in a town or city. They typically average 30-100 customers per mile of line! In terms of dollars and cents, this means a utility in a town or city with a density of 30 customers per mile of line (keep in mind 30 customers per mile is low for a city) the maintenance of a line costs approximately $1,667 per customer. Compare this to Arrowhead Cooperative where this same mile of line, with only 5 customers, costs approximately $10,000 per member (customer) due to the significantly lower density.
The cost of providing service is also dependent upon the geography of the service territory. In Cook County, we value our rock, lakes, trees and overall environment. But this same valuable resource also inhibits our ability to construct power facilities for a cost similar to that of other utilities in Minnesota or elsewhere. Whether the power is placed overhead or underground, trees must be dealt with, lakes must be crossed, and rock must be blasted, excavated or drilled – an expense many other utilities and/or utility customers do not have.
Power Cost Adjustment (PCA)
The power cost adjustment (PCA) is a debit or a credit that may appear on your monthly bill. The PCA credit or debit reflects the actual costs of generating electricity compared to what was budgeted during the month. This includes mining costs, fuel (gas, natural gas etc…) rail transportation and more. A PCA debit or credit is issued to Arrowhead Cooperative by our wholesale supplier, Great River Energy. The PCA is then applied to your monthly statement as a pass through of expenses or credits as we receive it from Great River Energy.
Kilowatt hours (kWh) are the amount of electricity consumed by a property over a given period of time. Arrowhead Cooperative provides energy at a cost reflective of our efforts to maintain affordable rates, reliable service, commitment to our local environment. Energy rates are determined each year and adjusted by the board of directors as needed to recoup the required costs of providing electricity to Cook County.
EnergyWise Reduced Rates
Arrowhead Cooperative offers our members the opportunity to take advantage of reduced electric rates for those who heat there property with electricity. To learn more about our EnergyWise reduced rate programs click here.