Lower Valley Energy Natural Gas storage and processing facilities in Afton. Similar gas services are provided to the Jackson area.
SVI PHOTO BY DAN DOCKSTADER

• Rates will be reviewed. 

Jim Webb, Lower Valley Energy CEO, invites the public to a town hall-style meeting to discuss rate changes, which will be held on October 2 at the Lower Valley Energy Office in Afton.

“We’ll go into detail so you can understand it,” he said. “Nobody hates rate increases more than me but it’s necessary.”

Lower Valley Energy announced rate changes for natural gas and electricity that went into effect on October 1. The energy cooperative said that natural gas rates will decrease by roughly 14.75 percent while electricity will increase by six percent, depending on usage. The changes were approved at the August Lower Valley Energy Board meeting.

According to LVE, the Board of Directors used a Cost of Service Analysis to give them guidance in making the decision. The electricity rate increase comes in the form of an increase to the monthly base charge that residential and small commercial members pay, regardless of how much energy is used, along with an increase in the energy charge to large commercial and industrial users.

“Unfortunately we’re having a rate increase of six percent but it depends on your usage,” said Webb in an interview with SVI. “We are changing the structure. Right now we have two parts of the base charge and the energy charge. The base is $16 per month. If you are 10Kw then it goes up to $18. If it’s between 10-15 Kw then it is $28. If it’s more than 15KW then it’s $38. We want to talk about it so people can understand it.

The board predicts that without the electricity increase, LVE would have a $4.5 million shortfall due to inflationary pressures along with the increase in Tier 2 power costs. That last electric rate increase from LVE took place in 2017. The cooperative continues to have some of the lowest electricity rates in the nation.

On the natural gas side of LVE’s services, the rate decrease is based on Lower Valley Energy’s hedging activities and a recent decline in wholesale natural gas prices, according to the utility.

“Half of our costs are fixed,” Webb added. “If we didn’t sell any energy we’d still have those costs. Wages, depreciation and such. We’ve had about 30-percent inflation since our last increase in 2017. We’re paying a lot more for material and wages and we’ve been able to absorb that but we’ve got to the point that we have to pass some of that on.”