Minnesotans experience weather in extremes from deep freezes to heat waves — which means your cooperative must be prepared year‐round to keep electricity flowing to homes, farms, and businesses no matter what Mother Nature throws our way.
Extreme hot or cold weather can stress the electric grid, and current world economic conditions can make the energy market volatile. The good news is that MVEC, its wholesale power providers, and the regional power market have a plan.
It’s our goal to be transparent and provide our members with the information you need to understand costs and how they affect the cooperative and you.
Cost-of-Service study this fall
MVEC rates have been stable since 2016 and are cost-competitive with local municipal utilities and Xcel Energy, an investor-owned utility. MVEC monitors the cost competitiveness of our rates compared to others. As we look ahead, a variety of factors may cause us to increase our rates. MVEC will conduct a Cost-of-Service study this fall. An outside rate consultant will review our electric rates to make sure the co-op has enough revenue for the cooperative to cover its expenses and meet our lenders’ margin requirements. The study also determines whether the cost to provide service to our various member types, both in total and by individual rate classes, are fair and equitable. As we learn the results of the cost-of-service study, information will be posted on this page.
By Ryan Hentges, CEO
This summer, we’ve talked about the ups and downs of the energy market. Fortunately, the regional electric system weathered the summer’s heat just fine for a variety of reasons. MVEC members helped through your voluntary participation in load control Energy Wise and generator programs and member-driven conservation efforts. Prices, however, continue to rise for virtually all goods and services, including electricity. We see the impacts while shopping, at the gas pump and when paying bills.
Electric bill impact
Your MVEC electric bill varies each month and is impacted by the number of days in the billing cycle, weather, appliance use, household size, and more. Several years ago, MVEC separated costs on your bill to provide additional clarity to the underlying items which impact your monthly bill. The Cost to Generate (wholesale power) is the co-op’s largest cost and makes up nearly 70 percent of MVEC’s budget. It includes the Wholesale Power Cost Adjustment (WPCA). In August, I mentioned a slight WPCA increase that averaged $3. This is a pass-through from power providers and covers variances in fuel and other commodity prices. Sometimes it is a bill addition, or it can be a reduction too.
The Cost to Deliver (MVEC) covers delivery, inventory, facilities, and our workforce. This also includes the $10 basic monthly service charge. Think of it like a membership fee. It covers the cost of maintaining power lines, transformers, and substations to make sure electricity is always available to you whether you use it or not. Our basic service charge is competitive with other local utilities.
MVEC members use the most electricity in the summer largely due to air conditioning load. This results in higher costs in the summer months (June – September when rates = 12.5¢/kWh) because energy demand levels are higher than in the winter months (October – May rates which = 11.7¢/kWh). Energy Wise programs (see below) can reduce your monthly bill. If you’re not sure whether you participate in Energy Wise, check the front of your electric bill. It will either show your savings or say you’re not participating, as shown at right.
By Ryan Hentges, CEO
Summer is here, and June quickly ushered in extremely hot temperatures, bringing attention to conservation efforts, grid reliability challenges, and higher electric usage due to cooling systems running nonstop to keep homes and businesses comfortable. Many things are happening in the energy industry. Below is a quick cooperative update.
Thanks for your energy conservation efforts, it helps you and the co-op save money.
The most notable day of heat in June was on the 20th, topping off at 101 degrees. We asked members to conserve electricity and shift usage after the energy rush hour of 3-9 p.m. And that’s exactly what many of you did.
MISO and MVEC systems performed well in June.
In June, there was adequate generation in the Midcontinent Independent System Operation (MISO) market, our region’s energy traffic controller. MISO monitors the electric grid system’s performance and reliability.
When this occurs, MVEC schedules various voluntary, member load control programs called money-saving Energy Wise or generator programs. A big thanks to members participating. Not only do you receive a lower electric rate or a monthly discount, but it also helps MVEC lessen high-cost peaks in energy demand and helps to maintain balance on the power grid.
Summer heat impacts your electric bill
Needless to say, despite conservation efforts, energy and fuel prices are impacting the co-op’s wholesale power costs – due to world events beyond our control. On your July electric bill, residential members saw a slight increase in the Wholesale Power Cost Adjustment (WPCA), averaging around $3. Because the WPCA is expected to continue to increase through 2022 into 2023, your Board of Directors voted to spread those costs over 12 months versus the usual three months to lessen the monthly impact.
The WPCA is an adjustment of actual costs versus what was forecast. It isn’t a new concept and has been around since 2000. In fact, we have given credits on 27 of the past 46 months on your electric bill. When the actual cost of power is below the forecast, the WPCA is a credit. If the actual cost is above the forecast, the WPCA is an addition.
Cost-of-Service rate study
Due to rising WPCA and market conditions, MVEC is conducting a rate study this fall. When there is a rapid change in the energy markets, reviewing the rate structure is important. MVEC will make sure the co-op has financial stability and will balance how to best deal with economic changes that might impact the membership today and into the future. More details will be shared in upcoming newsletters.
Service area transition with Shakopee Public Utilities
MVEC and Shakopee Public Utilities (SPU) made a joint request to the Minnesota Public Utilities Commission in June to approve a plan for transferring customers from one utility to the other in light of the city of Shakopee’s annexation of Jackson Township.
Both utilities mutually agreed on the service area boundaries impacted. Homeowners and businesses in Jackson Township, currently served by MVEC, will be welcomed as customers of SPU. Likewise, current SPU customers with Prior Lake addresses south of County Road 42 will become members of MVEC.
The switchover date with Shakopee is pending; however, we anticipate a completed transition by the end of 2022. It’s a win-win plan for both utilities.
So as summer winds down, know that your co-op is working hard to be your trusted energy partner, safely providing reliable energy – at cost.
By Ryan Hentges, MVEC CEO
In May, the North American Electric Reliability Corporation (NERC) issued its 2022 Summer Reliability Assessment. In it, NERC — the U.S. authority on electric reliability — warned several parts of the country are at risk of energy shortfalls this summer due to predicted above‐normal temperatures and drought conditions over the western half of the continent.
The announcement followed similar comments from the Midcontinent Independent System Operator (MISO).
I talked about MISO last month — MISO manages the power grid for 42 million people in the U.S. and Canada, including Minnesota. Think of MISO as the air traffic controller of the region’s grid. Using sophisticated technology and procedures, MISO has a wide-area view and control of the grid that goes beyond any one utility.
Although MISO projects the Midwest will have sufficient energy for the summer, it emphasized additional measures may be necessary to maintain reliable service during periods of peak demand. This typically occurs on hot and humid days when members are using more electricity than normal.
NERC indicated the north and central areas of MISO are in a “high risk” category due to generator retirements and increased demand. MVEC’s service area is considered “high risk.”
In emergency situations, MISO calls on additional power supply resources, imports energy from other regions, and performs voluntary load reductions to manage the electric system. Temporary controlled manual load sheds, or periodic power outages (rolling blackouts), are used as a last resort to keep the system in balance. These situations are rare and would occur only after other options are exhausted. If temporary controlled load sheds are needed, procedures are in place to act immediately when directed by MISO to shed load. Load shed protocols and processes are defined and drilled routinely, so when these events happen, our wholesale providers are ready.
Could MVEC be affected? The short and honest answer is yes. MVEC has contracted for enough generation to meet our members’ needs. However, power to our substations may be interrupted by MISO. Many factors will go into the decision by MISO to direct rolling blackouts. Our wholesale power providers generate sufficient supply, but ultimately MISO will take the needs of the regional electric grid into consideration when determining whether to call for emergency rolling blackouts.
We will do our best to communicate with you in advance if MISO calls for an event. Communications will be made on www.mvec.net, Facebook, Twitter, and/or email notifications.
What can you do? Being energy conscious is important. There are lots of ways to save and conserve energy. Our website www.mvec.net is a great resource for conservation efforts. Find the latest news and ways to be prepared.
I encourage you to check it out. As your electric provider, we will do our best to keep the lights on. We are all in this together.
By Ryan Hentges, MVEC CEO
The electric grid is an extensive network of power plants, power lines, substations, and technologies owned and operated by different utilities, all striving to achieve the same goal: deliver service reliably and keep the lights on with affordable electricity to power daily lives.
A combination of energy prices and supply chain issues are contributing factors when considering electricity costs. As a member-owned cooperative, MVEC is focusing on keeping member rates stable (legacy residential rates have not changed in the past six years); responsible use of the cooperative’s rate stabilization reserve fund (which helps to minimize a member cost increase); and the impacts rising energy costs can have on member bills.
We carefully watch energy market commodities and monitor how this impacts business operations. MVEC has a diverse power supply portfolio and purchases electricity from three wholesale power providers: Great River Energy, Basin Electric Power Cooperative, and Alliant Energy. For every dollar you pay on your electric bill, 70¢ goes toward paying for wholesale power costs – called “cost to generate” on your bill.
So where does wholesale power come from? The Midcontinent Independent System Operator (MISO) operates a power grid serving 15 central U.S. states and Manitoba, Canada. MISO’s wholesale market is where electric energy is bought and sold, and transmission is regulated. MISO helps the region’s electric providers deliver reliable, affordable energy in three ways:
Managing the grid
Think of MISO as the air traffic controller of our region’s grid. Using sophisticated technology, processes, and procedures, MISO has a wide‐area view and control of the grid that goes beyond any one utility.
This helps utilities maintain reliability regionally and prevents emergency operating situations in the future or in real‐time. Forty-two million people depend on MISO to generate and transmit the right amount of electricity every minute of every day.
Managing energy markets
In decades past, coordinating power flows and transactions was a manual process requiring many agreements between utilities. Today, all generation production is sold into the MISO market and cooperatives buy back what they need to serve members. MISO’s energy market helps keep electricity affordable by using the lowest cost generation available first to supply members and minimize flow constraints across the grid. MISO provides transparency with energy market price changes occurring every five minutes, all seen in real-time.
Rising prices in energy markets
The price of electricity in the MISO energy market has increased dramatically over the past several months due to many factors, but primarily natural gas price increases. Although MVEC’s margin reserves have been able to offset much of those rising costs, at some point, MVEC may need to pass those costs on to our members through the wholesale power cost adjustment on your bill, shown as part of the “cost to generate” line. This represents a pass-through from our power providers to cover variances in fuel and other costs that vary with commodity prices. We continue to find ways to keep costs down, but we also want you to be aware of potential future impacts.
On another note, supply chain challenges are being felt, and we are not the only ones experiencing this. For MVEC, supply delays mean longer wait times for materials, and costs are higher for essential supplies needed to operate our system. This could possibly linger to 2023 or beyond and affects new construction and service installations, as well as infrastructure planning into the future.
We are currently in a volatile and dynamic economic environment, which impacts the energy sector. As a non-profit, member-owned utility, we’ll continue to work hard to manage the impact this volatility has on your electric bill while continuing to provide the service you expect.
MVEC is a summer-peaking system, which means the co-op needs to purchase more electricity in the summer months, and your cooling system and other heavy appliance use during peak hours impact this need. See ways to troubleshoot your usage and costs. It is also important to understand how your usage is represented on your bill and learn the different electric rates your co-op offers.
There are two cost components on your electric bill:
Cost to Generate (wholesale power): This is MVEC’s cost to purchase the electricity you use. Wholesale PowerCost Adjustment (WPCA) is a pass-through from our power providers, covering variances in fuel and other costs that vary with commodity prices.
- This accounts for 70% of MVEC’s costs.
- The rate on your main meter includes a WPCA on the amount of electricity used in kilowatt-hours (kWh).
Cost to Deliver (MVEC expenses): This is MVEC’s cost to deliver electricity to your home or business.
- This accounts for 30% of MVEC’s costs.
Wholesale Power Cost Adjustment (WPCA) – legacy members
July WPCA Impacts: Energy and fuel prices, affected by world events outside of our control, are having an impact on the co-op’s wholesale power costs. On your July electric bill, residential members will see an increase in the WPCA, averaging around $3. It is forecasted to continue to increase through 2022 into 2023.
Why is there a WPCA on your electric bill?
- WPCA represents the difference in costs to generate electricity from our wholesale power provider from what was projected at the beginning of each calendar year and would normally be covered in our rate structure.
- The WPCA absorbs the volatility of generation fuel (natural gas, oil, coal) costs and aims to spread it over the projected kilowatt-hour sales for the year. This helps mitigate member impact by leveling out price spikes.
MVEC recently changed the WPCA calculation. What does this mean going forward?
- Given the rising costs, in May 2022 the Board of Directors voted to change the monthly WPCA to be applied over a twelve-month period versus a three-month period. What benefit does this offer? Moving from three months to twelve months allows usage costs to be divided over a larger period of time and can make a lesser impact on your monthly electric bill.
- MVEC rates are largely based on annual forecasts of what the cooperative expects to pay for wholesale power. This variable rate rider will allow us to true up actual wholesale power cost variances from previously forecasted amounts to better protect our overall financial stability.
- When the actual cost of power is below the forecast, the WPCA is a credit on your electric bill. If the actual cost is above the forecast, the WPCA is an addition to your electric bill.
History of WPCA for legacy members
|2019||WPCA credit: 8 months
Jan, Feb, May, June, July, Aug, Sept, Oct
|WPCA addition: 4 months
Mar, Apr, Nov, Dec
|2020||WPCA credit: 9 months
|WPCA addition: 3 months
|2021||WPCA credit: 9 months
|WPCA addition: 3 months
|2022||WPCA credit: 1 month
|WPCA addition: 6 months
Is a WPCA a rate increase? While it could be argued that MVEC’s rates are not going up, the reality is that any WPCA that makes a member spend more money on electricity looks exactly like a rate increase. A WPCA can add costs or reduce them, dependent upon the price of fuels to generate power.
Is this happening to everyone? Many utilities in Minnesota are being impacted. Even with the WPCA in place, you are paying very competitive rates in the national marketplace. The same generation fuel cost increases are impacting electric customers nationwide. Some power providers have announced rate increases to cope with rising costs. MVEC is currently discussing our next steps.
Why doesn’t MVEC pay for these increases?
MVEC is a not-for-profit electric cooperative owned by the members it serves. There are no other sources of revenue to pay bills incurred to generate electricity, except for actual costs from the members who use the electricity.
Why give members a credit and then later increase the WPCA? Why not just keep the credit and use that to cover increasing costs? We believe it’s important to charge members the actual costs of providing electricity. Therefore, if wholesale prices drop, members should enjoy a reduction in their rates as soon as is practical.
For other cost-saving solutions, see the tab below called “Resources for saving energy and protecting the grid”
- Energy Usage Information SmartHub is a secure online portal offering usage transparency that can help members make energy decisions based on their home or business’s specific usage date
- Energy Wise Programs Over 40% of MVEC members enjoy the benefits of reduced rates, monthly savings, or credits while participating in these conservation programs: electric water heating, space heating, electric vehicles, and cooling options, including an innovative Wi-Fi Thermostat program
- MyEnergyXpert A free do-it-yourself energy audit of your home with expert recommendations.
- Rebate Offers Get cash back for energy-efficient appliances and HVAC purchases
- GreenChoice Options While the electricity delivered to your home includes increasing amounts of renewable energy, MVEC has optional programs that give you free and low-cost choices to do even more.
- Finance Options Our program is for members interested in making investments in energy efficiency.
- Business Solutions Our key account team can help your commercial, industrial or agricultural business succeed by increasing energy efficiency, choosing rate-saving options, and optimizing the power use within your facility.
- Wherever possible, use ambient sunlight to illuminate workspaces.
- Turn off lights and equipment such as copiers, computers, process machinery, etc. when not in use.
- Replace inefficient incandescent and fluorescent lighting with LED lighting. Upgrading may qualify for MVEC grants and rebates: https://www.mvec.net/business-solutions/
- A little-known rebate is for Emergency EXIT signs
- Install occupancy and motion sensors to turn lights off automatically in unoccupied spaces.
- Perform regular, seasonal tune-ups on HVAC equipment. Be sure to clean coils and replace filters every 3 months.
- Do the same for all types of refrigeration equipment such as coolers and freezers.
- Consider tint film or blinds to reduce heat generated by sunlight through windows.
- Install programmable or smart Wi-Fi thermostats to automatically adjust the temperature according to the season, during closed hours, or when no one is around.
- A temperature setting of only three to five degrees higher can feel as comfortable with fans and each degree of higher temperature can save about three percent on cooling costs.
- Use power management features and software to place computers into a low-power “sleep mode” after a set time of inactivity.
- Use “smart” power strips to shut down power to devices that go into sleep mode and when the workspace is unoccupied.
- When purchasing new devices look for Energy Star office equipment that uses less energy. Or consider leasing energy-efficient equipment.
- Use weatherstripping and caulking wherever needed. Doing so will help keep conditioned air from leaving the building.
- Educate and encourage employees to be energy-conscious and offer ideas about how energy can be saved.
- Consider a professional energy audit to identify and determine ways to save and use energy more efficiently. Contact MVEC key accounts for more information.
Let’s Beat the Peak
conserve energy and ease the electric grid
The Midcontinent Independent System Operator (MISO) manages the power grid for MVEC and 42 million people in the United States and Canada (see map below). It helps electric providers (like GRE and Basin Electric) in the region to deliver reliable, affordable energy to distribution cooperatives, like MVEC. Think of MISO as the air traffic controller of the region’s grid. Using sophisticated technology, process, and procedures, MISO has a wide-area view and control of the grid that goes beyond any one utility.
If there is an emergency of magnitude that would cause rolling blackouts, as the last resort MISO directs all of the utilities in the region to implement periodic power outages according to pre-determined plans. That means many areas of Minnesota will likely be affected.
What is a rolling blackout? Think of it as a rotating power outage that is systematic and temporary to selected areas to balance power on heavy demand days.
Why does this happen? There’s a potential strain due to warmer weather and necessary electrical generation is off-line and not available to meet the energy demand being consumed. If the demand can’t be met, it can result in the Midcontinent Independent System Operator (MISO) issuing rolling blackouts across its service area. MVEC is part of the MISO North service area (indicated by blue on map).
When? Rolling blackouts normally occur during peak energy use times, normally between 4-8 p.m., but they can also happen at any time of the day if the system demand is too great to keep up.
Does this only happen to MVEC members? No, this is not specific to MVEC. Other MISO utilities are directed to do the same thing.
What benefit does it provide? It helps restore balance to the supply and demand of electricity in the markets. A blackout can be up to an hour, then the power is restored and another area is turned off – hence the name rolling blackout.
Did MVEC not plan correctly for rolling blackouts to happen? This is not a shortfall in MVEC planning. Although the cooperative contracted for and our wholesale power suppliers Great River Energy and Basin Electric Power Cooperative have the adequate generating capacity to meet our membership needs, the markets as a whole do not have enough electrical generation to meet regional demand.
If the market is short on electrical generation, all market participants are required to reduce load through a variety of means – the most dramatic being rolling blackouts.
How will we know if an event will happen? We will do our best to communicate with members in advance if MISO calls for an event. Communications will be made on www.mvec.net, Facebook, Twitter, LinkedIn, and/or email notifications.
- Do we have your preferred phone number and email address on file with us?
Update your phone number and email with this form
Safety tips if a rolling blackout occurs:
- Turn off the electrical equipment you were using when the power went out.
- Keep a flashlight on hand for emergency lighting if needed.
- Keep your refrigerator and freezer doors shut, if possible.
- If you have a generator, do not run it inside your home or garage.
- If using a generator, connect the equipment you want to be powered directly to the outlet(s) of the generator. It is important to not connect a generator to your home’s electrical system.
How can you prepare if an event happens?
- Keep essential supplies handy, like flashlights, batteries, bottled water, and a small supply of food.
- Refrigerated medication: Most will keep well in a closed refrigerator for several hours without any issue. If any concerns, visit your doctor.
- Computer use: keep files and operating systems backed up regularly. Consider a high-quality surge protector for all your computer equipment.
- Electric garage doors: make sure to find where the manual release lever is located and how it functions.
Health-dependent individuals or disability situations:
Members with critical health issues should be prepared with backup plans in case of an outage. If you believe your household qualifies for the Critical Service Load list, please get a physician’s note on clinic letterhead and send it to the address below. Upon receipt, MVEC will call to confirm your phone and location number.
Minnesota Valley Electric Cooperative
Attention: Dispatch Center
125 Minnesota Valley Electric Drive
Jordan, MN 55352
If you are on MVEC’s Critical Service Load list, we can notify you prior to a planned outage allowing you to make alternative arrangements. In the event of an unplanned outage, the cooperative’s restoration process requires the backbone of the system to be restored first. Members on the Critical Service Load list will be placed next on the list.
Energy conservation tips to help reduce electricity use can potentially help avoid rolling blackouts. Thanks for doing your part to help conserve energy!
- Set your thermostat at 78 degrees or higher.
- Install a Wi-Fi thermostat. Get a $50 rebate and save 10% on energy usage from June to September every year.
- Change the furnace filter – this can reduce energy consumption by up to 15%!
- Turn off lights and other electronics not in use.
- Use major appliances after 10 pm when the demand on the system is much less.
- Charge electric vehicles overnight, when there is less demand and the cost of electricity is least expensive.
- Visit these sites on mvec.net:
We’ll keep a watchful eye on MISO developments over the summer and will communicate openly. Thanks for being a member of MVEC!
- Build or buy an emergency preparedness kit, including a flashlight, batteries, cash, and first aid supplies.
- Have alternative charging methods for your phone or any device that requires power.
- Know where the manual release lever of your electric garage door opener is located and how to operate it.
- Purchase ice or freeze water-filled plastic containers to help keep food cold during a temporary power outage.
- Keep your car’s gas tank full. Gas stations rely on electricity to power their pumps. If you drive an EV, keep it charged overnight, when there is less demand and the cost of electricity is least expensive.
- If you rely on anything that is battery-operated or power dependent like a medical device, determine a backup plan.