Unbundling Electric Rates

In your most recent power bill, you may have seen a line item titled 'Peak Demand.' Your Clearwater Power bill now includes three distinct charges:

  • Service Availability (fixed)
  • Energy (consumption over time)
  • Peak Demand (highest point of energy use and system impact)

As your electric provider, our charges are set to meet costs. Fortunately, we operate on a not-for-profit basis so there are no dividends or shareholders to pay. We simply must cover the costs to the cooperative. Traditionally, most of the utility's costs were "baked in" to the energy rates. Beginning in January of 2022, our Board of Directors has chosen to adopt adopted a new billing methodology that is more equitable for all of the different types of consumer:

  • Some people use a lot of energy. Increasing energy charges unfairly impacts those large homes, shops and farms
  • Some people need electric service to serve a very small load (like a well pump). Increasing Service Availability charges unfairly impacts those smaller customers
  • Some people offset their energy consumption with net metering. Those customers get full access to power when needed but their impact to the grid is unduly subsidized by other members
  • Some people use large "peaks" of power for short times resulting in a large impact to the grid with relatively low energy purchases

The new billing methodology is a more equitable way for each distinct usage pattern (load profile) to help cover the costs to the cooperative.

When Clearwater Power buys electricity from the Bonneville Power Administration, energy (kWh) and demand (kW) are billed separately. Energy is consumption over time (wattage draw of the appliance multiplied by the hours it was used). Demand is an instantaneous measurement of peak wattage. Demand is the size of the load, regardless of how long it was on. Demand measures the impact on the grid by measuring the highest peak wattage draw of the month.

In addition to charges from BPA, there are internal expenses to run the cooperative, maintain the distribution grid, purchase equipment, etc. These charges are ‘fixed’ because they cost roughly the same no matter how much energy is being used by consumers. These costs are incurred every month just to keep the electricity available to anyone, whenever it might be needed.

As a not-for-profit cooperative, Clearwater Power’s new rate takes a step towards unbundling the retail rates to match the wholesale costs. We have introduced a small charge for demand and lowered the energy rate at the same time. Now, just as the co-op’s costs fall into three categories, the retail bills will have three categories: energy, demand and fixed charges. This helps us spread charges more fairly according to what it costs to serve each member.

Each member will be affected differently, but the overall change to your bill should be an increase of around 1.6%. Many people will see an increase of $3 - $4 on their bill.