Rising property taxes drive rate pressure while Co-op leaders work to keep it under 3%
On November 13, 2024, Washington Electric Cooperative filed a proposed rate increase of 2.91% with the Public Utility Commission (PUC). The rate increase takes effect January 1, 2025.
A major driver of the rate increase is a steep rise in WEC’s property tax burden. WEC is a not-for-profit cooperative utility, but while many 501(c)(3) nonprofit organizations may claim exemption from paying property taxes, WEC may not. The Co-op is still responsible for paying property tax to each town in which it has property—which includes 1,250 miles of line across 41 towns. Finance Director Teia Greenslit explained, “WEC’s nonprofit status is a 501(c)(12), which only allows for the exemption of paying state and federal income taxes.” WEC is required to pay all other taxes, including property, sales, and gross revenue taxes, she said.
WEC’s Board of Directors approved the rate increase request at its meeting during the first week of November. “WEC is a not-for-profit: we don’t, and can’t, raise rates to generate a profit. We don’t build or charge for things we don’t need in order to generate more revenue,” said Board President Stephen Knowlton.
“Our property taxes have gone up 20% over the last year,” said General Manager Louis Porter. Many towns in WEC’s service area have higher property tax rates than the state average, which means WEC’s property tax burden is higher than fellow utilities serving other regions. Regulations and joint ownership of some assets require the Co-op to be responsive, instead of proactive, in collecting funds to meet its budget. Porter explained, “The way it works is fractional cost, so we have to get the property tax bill first, and only then do we have the information to request a rate case.”
Factors Contributing To—And Reducing—Rate Pressure
Porter noted that WEC member feedback consistently shows members prefer low rate increases more frequently to double-digit rate increases less frequently. This increase, under 3%, is balanced with respect to member wishes, he said.
Nevertheless, nobody wants to see cost increases of any size, Porter acknowledged, especially when Vermont households are also experiencing rapidly rising property taxes, as well as health care costs and other essentials. “We’re member-owned, so affordability matters. That’s especially important when we’re forced to consider raising rates. What can we do to minimize the impact?” Porter continued. For example, he said, Dave Kresock, WEC’s Director of Engineering and Operations, recently researched and selected a new supplier for transformers. This lowers WEC’s infrastructure costs, increases transformer availability to members swapping out fossil fuel power for electric power, and helps reduce the pressure on this most recent rate increase.
Other factors contributing to the rate increase include rising operating expenses related to storm outage restoration, and general cost increases. Net metering remains a factor, in that the Co-op must pay premium prices for the power that solar net metering members return to the grid. In addition, net metering members are grid-connected in order to return generated electricity, but pay less to maintain grid infrastructure than members who pay a larger amount of upkeep costs through their bills. The rate redesign that took full effect in 2022 raised the customer service charge and lowered the cost per kWh with the intent to make the cost of grid upkeep somewhat more equitable, but net metering remains popular in WEC territory and a growing factor in rate increases.
Comparing WEC to Other Utilities
Customers of each electric utility pay different rates and receive different bills. There are multiple factors at play, including whether a utility’s service area is municipal or rural, whether a utility is for-profit or non-profit, what fees are included, and others. But as all electric utilities are regulated, their rate increase information is publicly available. WEC pays attention to its fellow utilities’ rates and rate trends, Porter explained: even with its extremely rural and rugged service area, WEC leaders work hard to keep rates in line with other state utilities. “There’s a perception that Washington Electric has unreasonably high rates,” he observed. “WEC residential rates are high compared with other utilities, but if you compare rate increases and bills across other Vermont utilities, the difference is not large. Every customer and every utility is unique, but several of our neighbors have been forced to raise rates at times when we have avoided increases, and some are looking at increases this year far more significant than 3%.”
One factor that sets WEC apart from investor-owned utilities is that as a member-owned cooperative, it returns credits to its members over time. These refunds appear as a credit on current members’ electric bills once a year; former members receive a check in the mail. WEC has returned just under $10 million to its members.
All the same, electric bills can be painful, especially if they are higher during the winter. For members facing daunting bills, there are programs in place. WEC Member Services Representatives help members plan bill budgets they can afford. WEC is also piloting an income-based program in partnership with VEC to deeply reduce eligible members’ electric bills. Called the Affordable Renewable Community Energy (ACRE) program, participation is first-come, first-served.
For members who wish to lower their bills overall, Efficiency Vermont offers substantial incentives on home weatherization and other cost-and-energy saving upgrades. Finally, coaches at community support agencies—for WEC members, these are Capstone and Northeast Kingdom Community Action—have information about all kinds of incentives to make living in this state more affordable and comfortable for any Vermonter who rents or owns a home, or drives a vehicle.
See below for more information about how to access energy resources and incentives. Information about the ACRE program is on washingtonelectric.coop/assistance-programs.
Energy Resources and Incentives
Efficiency Vermont
Vermont’s energy efficiency utility provides rebates, energy assessments, income-based assistance, as well as advice and support for projects, renovation and construction, and financing. Get started at efficiencyvermont.com.
Financial and Energy Coaching
Coaches help you save money and access income-based incentives. They help you make the dollars you spend do more to keep you and your family safe and saving energy in your home and on the road. Contact your local Community Action Agency: Capstone at capstonevt.org or Northeast Kingdom Community Action at nekcavt.org.
Past-Due Bills and Budgeting
Don’t let your WEC bill go past due, or grow beyond what you can manage. WEC Member Services Representatives can help you put together a budget that works for you. Plus, there are state programs that may help pay down your bill. Call today for help putting together a plan: 802-223-5245 or toll free at 1-800-WEC-5245.
Incentive Calculator
Efficiency Vermont and Rewiring America’s incentive calculator for Vermonters is a one-stop shop to find rebates to make your home greener. efficiencyvermont.com/calculator