Every month I get charged the $25.50 Access Charge.  Why?

            The “fixed” or basic charge (Access Charge) is a flat fee designed to recover the cost of delivering electric energy to all members.  The fixed charge is designed to have a safe and reliable distribution system which requires a large investment in poles, wires, transformers and other equipment.  It also supports our fleet vehicles, facilities and customer service functions, such as line maintenance, right-of-way clearing and general administration responsibilities.

Kwh Charge-

            The energy charge is a charge that is designed to capture the amount of energy or kilowatt hours used by each individual member.

So why do I have to pay the $25.50 Access Charge even if I don’t use any Kwh’s?

            If a customer uses only one kilowatt hour of electricity or 1000 kilowatt hours of electricity, Kandiyohi Power Cooperative still incurs the same cost to build the line, maintain the substation and distribution system, respond to outages, and deliver electricity to both of these customers.  If you take the energy use out of the picture, the investment in the infrastructure and equipment does not change.  It takes the same equipment to deliver 1 Kwh as it does to deliver 1000 Kwh’s.

            This concept is similar to the purchase of a car and the insurance you pay on it.  You pay a monthly insurance premium on your car regardless if you use it 1 day or 30 days a month, if you drive 10 miles, or 10,000 a month, or you have 1 or 5 passengers when you use it.  There is a “Fixed” cost.  For the farmer- the combine you have in the shed- the fixed costs i.e. insurance, depreciation, the up front cost of the equipment, and etc., are the same if you combine 10 acres or 8000 acres.  There is always a “fixed” cost, or a flat charge to have this piece of equipment.