The Moon Lake Electric Association Board of Directors has approved rate reductions totaling $4.5 million.
The rural electric cooperative serves 14,000 customers in eastern Utah and western Colorado. The rate decrease will affect all Moon Lake consumer classes from residential to industrial.The cooperative's 7,200 residential customers will see an average rate decrease of 10.2 percent. Based on the results of a recently completed systemwide cost-of-service study, residential users will receive a "block rate," which provides discounts depending on the number of kilowatt hours used in the home on a monthly basis, explained Moon Lake Member Relations Manager Russell Cowan.
"Residential consumers will benefit from the cost of service study in that we're now able to develop a block rate. Our block rate says that consumers who are using, for example, up to 700 kilowatt hours will see a rate decrease, while consumers who use more than 700 kilowatt hours will receive an additional rate decrease."
A residential consumer with a power bill of $60 a month will see a savings of just over $5 or 8.7 percent, while a residential consumer who spends $300 a month on electricity will see a 15.3 percent rate decrease for a monthly savings of more than $47, said Cowan.
All other consumer classes will receive across the board rate reductions. Small businesses will see a decline of 9.3 percent in the price they pay for power as well as an additional $5.25 drop in their monthly customer charge. Large power users will see savings between 9.7 percent and 11.2 percent depending on their classification, and irrigators can expect a rate decline of 9.5 percent.
"The rate decrease was primarily due to the restructuring of Deseret Generation & Transmission contracts with the various creditors and also due to the recently signed contracts with Chevron," said Moon Lake General Manager Grant Earl.
The culmination of months of negotiations between Deseret and its creditors required certain contract amendments between Deseret and its members to consummate the debt restructuring, he said. "The new contracts were extended six years, the cooperative is restricted from contracting directly with cogeneration projects and the Rural Electric Administration is now in a stronger position to enforce the contract that the member systems have with power supplier Deseret."
Moon Lake is the largest of six rural electric co-ops which comprise Deseret. Moon Lake purchases 75 percent of its wholesale power needs from Deseret's Bonanza Power Plant in Uintah County.
The enormous amount of energy purchased by Chevron from Moon Lake for its carbon dioxide fields in Rangley, Colo., also helped reduce power costs to all consumers, said Earl.