Washington Electric Cooperative says it will file a request with the Public Service Board to increase rates by approximately 6 percent.
The cooperative serves customers in 41 towns in north-central Vermont.
Co-op General Manager Patricia Richards says the request is driven largely by a decline in revenue from selling Renewable Energy Credits (RECs).
“We’re looking at roughly a 6 percent rate increase. And of that rate increase, 4 percent of it is from the REC market alone," Richards says. "The decline in prices from renewable energy credits is really the big driver that we’re seeing."
Richards says a glut on the market for renewable energy credits has driven prices down, especially in the last few months. The co-op expects to see about $500,000 less in revenue from RECs this year.
“The REC market was trading in the $40-per-megawatt-hour range less than six months ago. Right now we’re looking at REC markets in the mid-20s,” she says. “We haven’t seen this rapid decline in a long time.”
Last year Washington Electric collected just under $3 million from sales of the credits. Richards says the co-op will likely earn about $2.5 million this year.
The co-op reported total revenues for 2015 of just over $17,118,000.
Richards says other factors contributing to the rate increase request include transmission costs in Vermont and the region.
“We have had rising transmission, power costs, labor cost pressures, every year, year-in and year-out. We’ve been able to curb those with REC sales, with keeping expenses down as low as we can,” she says.
Washington Electric last increased rates by 3.78 percent in August 2014. In 2011, the Public Service Board approved an increase of 19.44 percent, which Richards says was also driven by changes in the REC market.
Richards says there were no rate increases from 2002 to 2011.
She says the co-op is still finalizing its rate request to the Public Service Board. If the increase is approved, it would likely take effect in January.
11/7/16: An earlier version of this story mistakenly quoted Patricia Richards as saying of the 6 percent rate increase "5 percent of it is from the REC market alone." The figure is actually 4 percent.