Electric Rate Increase FAQ’s
Q. How much will my bill increase?
A. The increase is approximately 3%. An average Residential member uses 1308 kWh / month which is equal to an increase of $5.83* per month. However, the increase you will see will be based on your individual household consumption.
(*Taxes and Operation RoundUp are not included in this figure.)
Q. What is the change to the Distribution Facilities Charge?
A. The change in the Distribution Facilities Charge differs per rate classification. For most members, the Distribution Facilities Charge has increased/decreased as follows:
|OLD RATE||NEW RATE|
|Single Phase (14,479*)||$38.89||$39.64|
|OLD RATE||NEW RATE|
|Small General Service (1,084*)||$38.89||$39.64|
*Number of members
Q. What does the Distribution Facilities Charge represent?
A. The Distribution Facilities Charge covers the non-energy costs of operating the Cooperative. It ensures that expectations for continuous power and outstanding member service are met. It provides funds that must be invested now to maintain the quality, reliability, and integrity of service that our members count on and come to expect. The items covered by the Distribution Facilities Charge include:
- Trucks, wire, transformers, power poles and labor needed to build and maintain the electric distribution system.
- Keeping pace with increased system investments to improve both capacity and reliability.
- Implementing new technologies to provide increased reliability and operational efficiencies, such as our outage management system and advanced metering infrastructure; and
- Liability insurance, interest, taxes, and emergency storm restoration.
Since 2010, NineStar has rebuilt or added over 192 miles of overhead and buried electric distribution lines, installed, and replaced over 2,100 transformers, upgraded, and replaced over 27,000 meters and brought a new McCordsville substation online. Because all cooperative members benefit from having reliable electric service available when they want it, the Distribution Facilities Charge ensures that everyone pays a fair share of basic costs—costs that exist whether a single kilowatt-hour is used.
Q. Why is NineStar’s Distribution Facilities Charge higher than neighboring electric utilities?
A. Due to our low consumer density and because we have relatively few large industrial members to help carry the financial load, NineStar’s Distribution Facilities Charge is slightly higher than other neighboring utilities. NineStar serves an average of 17 members per mile of electric line. Compare that to a neighboring electric utility, where average density runs from 30 to more than 40 customers per mile of electric line. Regardless of consumer density, NineStar has an obligation to meet our members’ needs and expectations for reliable electric service, and we are committed to doing so.
Q. When was the last rate increase?
A. The last cost-of-service rate study was performed in 2016, which resulted in an overall 1 to 2 percent increase. NineStar works diligently to control costs, and we have kept our rates stable for the last four years. However, the 2020 cost-of-service rate study resulted in the need to update our rate structures to ensure that each member pays his or her fair share. NineStar has been able to control the size of electric rate increases over the last decade below the rate of inflation and has avoided large, double digit rate increases.
Q. Who determines when a rate increase is necessary and by how much?
A. NineStar’s Board of Directors and executive staff continuously monitor the financial stability of the organization to determine if or when a rate increase is necessary. To establish the new rate structure, an independent, experienced firm was hired to review and recommend changes to our rates.
Q. What is the effective date of the new rates and when will I see this reflected on my bill?
A. The new rates will be effective on bills created after November 1, 2020.
Q. How do NineStar Connects rates compare with those of neighboring electric utilities?
A. Based on the number of members NineStar has compared to our neighboring electric utilities, we are very competitive. NineStar Connect only has 16,500 meters to spread the fixed cost to, where a high-density electric utility has hundreds of thousands. Since the merger between Central Indiana Power and Hancock Telecom on January 1, 2011, we have been able to reduce many general overhead expenses by spreading those fixed costs over a greater number of customers. We have seen our electric fixed overheads go from above average for state and national rural electric cooperatives to below average over the course of the last 10 years as we have been able to maximize on these efficiencies.
Q. Did rates increase because of the deployment of advanced metering infrastructure (AMI) smart meters?
A. No, NineStar Connect is always looking for ways to better serve you—our members. The advanced metering system being utilized will provide operational efficiencies, reduce costs, as well as increase the reliability of your electric service.
Q. Will commercial/industrial rates increase or is this applicable only to residential rates?
A. The cost-of-service rate study offers a comprehensive review of all rates to ensure that each member regardless of rate classification pays his or her fair share. This was one of the most comprehensive rate studies that has been conducted in many years. Consequently, all rate classes were reviewed and updated.
Q. Are copies of the rate schedule available?
Q. I understand that rates have not increased since 2016. Can we expect the same time frame with the new rates? Or is another rate increase anticipated and when?
A. While NineStar Connect has not had a rate increase in four years, there are several factors that can come into play and will affect rates. Many of these are unplanned and are tied to rising costs for coal, natural gas, storm restoration efforts, legislation requirements, etc. We are committed to doing our best to minimize the impacts to our members by being proactive in our power supply and operational planning and offering energy-saving tips and rebate programs. We are committed to maintaining the reliability, quality, and integrity of our electric system. As such, NineStar will be implementing a phased increase over the next three years with the first small rate increase starting in November 2020.
Q. What is NineStar doing to keep costs down?
A. NineStar Connect has not increased rates since 2016. As your cooperative we strive to operate efficiently while adhering to our commitment of providing affordable, high-quality, and reliable electric service. We continuously evaluate our operations to keep your rates as low as possible by:
- Managing our power supply contracts. For each dollar collected, 70 percent goes to the cost of purchasing electricity to meet the needs of our members.
- Implementing beneficial technology, such as our outage management system or advanced metering infrastructure, to help control costs, provide operational efficiencies and increase reliability.
- Competitively bidding all contracts to ensure quality service at the best possible price; and
- Ongoing evaluation of our day-to-day operations for opportunities to improve and gain efficiencies.
Q. What can I do to reduce my electric costs and can NineStar provide any assistance in this area?
A. NineStar Connect offers several ways to help members manage their electric bills. These services include using power more efficiently with our residential time of use program. Flexible payment options, such as budget billing and auto-bank draft may also be available. To learn more visit ninestarconnect.com or call 317.326.3131
Members may find helpful information about conserving energy on our Power Moves website, which includes Energy efficiency tips, rebate incentives and information about home energy audits. To learn more visit powermoves.com.
The Co-op Difference
NineStar Connect is a nonprofit electric and communications cooperative, so we don’t sell to customers or work for shareholders. Instead, we have members who are actually our owners.LEARN MORE