From time to time we get questions about the Customer Charge assessed to each account. Other organizations may refer to it as a Facility Charge or a Connection Charge. They all describe the same thing – a way to recover some of the fixed costs
of an operation regardless of the usage.
People are sometimes unsure about having to pay for something that they don’t think they are “using”. Especially if it is a service they only use at certain times of the year, such as a stockwell or bin service. But that is the situation that makes a Customer Charge necessary. To recover the costs that we have to have power available to an account 365 days per year regardless of how much or when it is used. We are constantly doing maintenance on existing line, replacing damaged poles, and rebuilding stretches of line that are aging. That and many other kinds of maintenance are
required to continue to provide reliable and high-quality electric service to all our member accounts.
Another example I have often cited is that we don’t send out a separate bill for outage calls. If you have a fuse out on one of your accounts or if a storm breaks off a pole, our guys get out there and get the lights back on. Those are examples of things that have to be done whether the service is being used right then or not. So they are costs that need to be recovered through a Customer Charge.
And it is not just electric utilities that now use this type of cost recovery. Almost every service you use now employs this model. For many years you have gotten a cable or satellite bill regardless of how much TV you watched that month. Cell phones used to be more usage-based but now are often a set access charge. And any subscription or streaming service you have is just a flat fee per month.
Even though it might not always seem that way, a Customer Charge is actually the most fair way to recover fixed costs. It ensures that everyone is contributing their share to having power available when they need it. Accounts that use more electricity are not covering for the ones that use less. And it helps make sure Midwest is recovering our costs in low-usage times while not over-collecting in high-usage periods.
Jayson Bishop
*Midwest Electric is an equal opportunity provider and employer.*