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VEC Marks Fifth Year with No Rate Increase 

November 13, 2018

Johnson, VT - VEC will not seek a rate increase for January of 2019, marking the fifth consecutive year that VEC has kept electric rates flat.

“I’m very proud of the work our entire team has done to keep rates flat since January 2014,” said VEC Chief Financial Officer Michael Bursell. “It’s taken a great deal of creativity, negotiation, and careful budgeting and everyone has pitched in,” he said. “That’s the beauty of the co-op model – if we do well, all our members do well.”

For one of the larger electricity consumers in VEC territory, the announcement there will be no rate increase for yet another year, was welcome news.

“Any time we can keep costs down – and for our resort electricity is a significant cost – we can invest in a better experience for our guests and help us keep and add jobs in the local community,” said Steve Clokey, VP Marketing, for Smugglers’ Notch Resort. “Hats off to VEC.”

Over the past ten years, VEC’s rates have increased an average of just 0.7 percent each year, well under the annual rate of inflation.

Broadly speaking, VEC has been able to contain rates in recent years by continuing to make good investments in infrastructure, managing debt effectively, and having locked in an economical, diversified power portfolio that largely insulates the co-op from lots of power supply cost volatility, Bursell said. The co-op has also benefited from increased power sales to some commercial users who are abandoning fossil fuel in favor of electricity. Members’ willingness to trim their electric use during times when it’s particularly expensive for the co-op to buy and transmit extra power – via the VEC Beat the Peak Program - has also likely helped, he said.

VEC has been able to keep the rates flat even as the co-op has maintained high customer service and reliability ratings overall. For instance, VEC’s frequency and duration of power outages have met or exceeded state regulatory requirements since 2014.

Bursell cautioned that cost pressures likely will not abate in the coming years. For example, Vermont’s net metering program, which requires utilities to compensate producers at rates above retail prices, heavy storm activities, transmission costs, and the replacement of natural gas contracts with higher cost renewable contracts, all add to increasing costs.