JMEC is a not-for-profit, cost-of-service electric cooperative, whose members have significant say in how the system is run as they elect the board of trustees who govern the utility. Cooperatives seek the lowest, long-term costs since its investors are its members. IOUs are owned by their shareholders who seek to maximize earnings per share and rate of return and look for stable earnings and dividends as well as some growth.
JMEC seeks the best balance between the needs of its members for reliable service and low rates and the needs of the cooperative to be financially sound so we are able to meet those needs at the lowest long-run costs.
About the rate change
When the Advice Notice publishes in late December it will show the average residential member’s bill increases $5.82 per month. The requested overall system rate change is 9 percent.
Taking into consideration Phase 2 of Tri-State’s wholesale power cost reduction started in 2021, the estimated change to the average residential member’s monthly bill will lower in March 2022 to $3.30.
The total dollar increase will vary based on type of member (residential, small commercial, large power) and the amount of energy you consume. For example, here is how the residential rate is affected by amount of energy usage:
JMEC made a strategic decision to place the majority of the rate adjustment in the Facility Charge. The kWh rates will see very slight changes. Focusing on the Facility Charge accomplishes three things:
- Have the least impact on our lower income members.
- Keeps JMEC’s Facility Charge at the median of all New Mexico electric cooperatives.
- Enables JMEC to be financially sound so we are able to meet the needs of our members for safe, reliable service without being dependent on energy sales.
With this change, JMEC will not depend on selling more electricity to cover the cost of maintaining our system. The higher Facility Charge will better cover the fixed costs of operating the system and the energy charge will cover the cost of the energy we deliver to your home or business.
The rate change will go into effect in February 2022.
U.S. prices have increased nearly 14 percent over the last eight years since JMEC’s last rate adjustment and the cooperative has reached a point that its regular operating expenses are more than the revenue it collects through rates.
Jemez is legally obligated to comply with federal regulations mandating minimum financial metrics and this rate change must occur for the cooperative to do so.
The board of trustees is very sensitive to the economic burden experienced by many of our members due to the pandemic and has approved a rate adjustment that will have the least impact on our lower income members while still allowing JMEC to comply with federal regulations mandating minimum financial metrics.
Cooperatives throughout the U.S. periodically hire independent, third-party experts to conduct a Cost of Service (COS) study to determine what it costs the cooperative to provide electric service to each type of member (like resident, commercial, industrial), determining the amount of revenue needed to do so while minimizing the impact on members of any rate increase.
In making these decisions, the cooperative’s board of trustees wears two hats – they must ensure the cooperative is financially sound while at the same time representing the interests of its members. In October 2017, for example, JMEC’s board of trustees did not change rates after a COS study showed a need for a small increase.
The board of trustees did consider it in October 2017 when a cost of service study showed a need for an increase but decided not to request it. The board’s strategic focus on the lowest practical rates for members eventually ran its course, bringing the cooperative to a point where its regular operating expenses are more than the revenue it collects through rates.
It greatly depends on the economy. For instance, a rise in inflation could have bearing on the timing of any future rate change. When growth in the cost to operate the system requires it, as a not-for-profit, cost-of-service provider, JMEC will consider at that time only what is necessary to operate the cooperative while providing safe, reliable electric service.
In 2020, Jemez experienced an unusual loss of membership sales. Our largest load from the oil field sector suspended its operations due to that’s industry’s changing economy while casinos, schools and small businesses all shut down following pandemic-related orders. The pandemic only worsened what was already an unsustainable revenue model.
Regulators require that the consumption data of the year tested be “normal.” JMEC’s pandemic-year 2020 consumption data was not normal. In fact:
- 2020 and 2021 produced drastically higher kWh sales for residential members as in pandemic conditions people experienced layoffs, job loss or worked from home while school children resorted to remote learning. Using numbers from these years would allocate much more expense than normal to the residential rate class.
- 2020 and 2021 produced drastically lower kWh sales for commercial members including schools, casinos, restaurants and retail stores that have been closed because of the pandemic. Under this scenario this rate class would be allocated less expense than it would in a year without a pandemic.
Yes. All of the cooperative’s member types will pay their fair share of the rate change.
Natural gas rates recently tripled in New Mexico. With supply concerns and rising demand, forecasters predict natural gas costs that have doubled in the last year could double again if a colder than normal winter creates further pressure on demand.
With the projected increases in natural gas and propane this winter, the rate change proposed by JMEC will make electricity the most affordable energy to heat a home.
No. All ROW expenses are entirely paid through the rate riders on everyone’s bill and are reconciled and recalculated annually as noticed to all customers in February each year.
Carmen Campbell, district manager and tribal liaison for JMEC, is the contact person for this rate change. She can be reached at:
We’re committed to making sure all inquiries to discuss the rate change are satisfied.
Jemez’s rates have been among the lowest of New Mexico’s 11 electric cooperatives served by Tri-State G&T for the last 20 years. After the proposed rate change goes into effect, JMEC’s rates will still be the lowest in this peer group for the average (770 kWh) resident.
No, and while the new building is not the cause of the rate change, the cost to operate the new building, as with the old building and just as with poles, wires and service trucks, is included in the overall cost of providing service.
Much thought and consideration was given before it was decided in 2016 to replace the 50-year-old facility, Among the deciding factors:
- The previous facility required numerous immediate renovations such as complete environmental remediation to address asbestos and lead paint; replacement of its failing septic and heating, cooling and ventilation systems; retrofits to meet all Americans with Disabilities Act requirements.
- A new facility would incorporate design for worker safety and efficiency, energy savings, use of environmentally friendly materials and cost less to operate over time.
At the time the building was approved the cooperative was financially strong, JMEC members were timely in paying their monthly bills and a pandemic was not on the horizon so it was decided to pay for the new construction out of cash reserves. The new building is debt free and an asset on the cooperative’s balance sheet.
Jemez constantly evaluates our day-to-day operations for opportunities to improve and gain efficiencies, particularly so each fall as we develop the cooperative’s annual budget.
In the pandemic season:
- Hiring was frozen.
- Scheduled pay increases were decreased or delayed.
- New vehicle purchases halted.
- Capital expenditure projects almost completed stopped.
- Maintenance projects were deferred.
On an ongoing basis JMEC:
- Implements technology such as our outage management system or advanced metering infrastructure to help control costs, provide operational efficiencies and increase reliability.
- Properly spends on maintenance today, including a tree-trimming cycle, to avoid future risk to public safety and member reliability if operations and maintenance expenses are cut too deeply.
- Facilitates staff and energy efficiencies in the new building such as with better equipped and located IT server room, mechanic and warehouse shops; LED lighting; high-efficiency heating and cooling system; energy-saving insulation and windows.
- Competitively bids all contracts to ensure quality service at the best possible price.
- Works with state and federal lawmakers to ensure issues affecting our rural members are heard and addressed. Recently, this has included access for RUS borrowers like JMEC to low-cost capital, for example, to refinance loans without penalties at interest rates much lower than the 4 to 6 percent the cooperative pays now.
The rate change will improve the recovery of our fixed costs that reoccur monthly whether or not a single kilowatt-hour is used. Your cooperative’s margins (profits) are to be allocated to members in the form of patronage capital and returned in the form of capital credit payments to you.
The cooperative must make more money than it spends each year in order to stay in business and operate in a financially sound manner. As a member of JMEC, you receive a report of your portion of the cooperative’s margins (profits) for the year. JMEC keeps track of this and returns it to each member over time. This report is called a capital credit allocation notice and is included on one of your billing statements.
No. JMEC is a not-for-profit electric cooperative. Our not-for-profit status mandates that any net margins (profits) made by the cooperative must be allocated to the membership in the form of capital credits.
JMEC last distributed capital credit allocations in 2017 for members who were part of the cooperative in 1985, 1986 and a small part of 1987. It is intended that JMEC distribute capital credits more frequently as new rates help stabilize the cooperative’s financial situation.
The cooperative has several options to help members manage their electricity bill:
- Online and automatic payment options
- Pre-paid program
- Levelized/budget billing
- There are also several programs to help members lower electric costs:
- Rebates can be found at https://www.jemezcoop.org/rebates for when you purchase energy efficient appliances and lighting.
- Jemez billing clerks are happy to discuss ways to help identify energy saving measures and ways to identify any household energy hogs.
- For those who have had trouble keeping up with their bill, our customer representatives are ready to help you with short- and long-term installment payment agreements.
- There also are assistance programs through other organizations that may help certain qualifying households. You can find a list of them and their contact information at https://www.jemezcoop.org/assistance-program