Adjusting to New Rates in the New Year

Posted: January 13, 2023 at 4:03 p.m.

As we communicated throughout 2022, Cloverland’s board of directors passed the recommended rate increase from our cost-of-service study, effective this month. The 5% overall increase is equivalent to 1% per year since the 2017 increase. To address questions on our new rate structure, please visit or contact our member services team to have information mailed to you. Meantime, here are some common questions:

The new rate is structured differently – what is the facilities charge and peak demand charge?

The facilities charge ensures that expectations for continuous power and outstanding member service are m

A graphic showing utility poles, trucks, and a transformer. The graphic explains what the facilities charge covers.

et. It gives each member a fair and equal share of the cooperative’s operations. It provides funds that must be invested now to maintain the quality, reliability and integrity of service that our members count on and expect. The facilities charge essentially ensures that all equipment operates properly and staff is trained and ready so the lights turn on when you need them.

Peak demand is the maximum rate at which your household consumed electricity during the billing month, but only during the peak daily hours (8 AM – 9 PM). Each Cloverland member’s highest monthly point of peak demand (measured in kW) is multiplied by the peak demand rate to determine the monthly peak demand charge. The peak demand rate is set by each rate class:

  • $0.93 residential
  • $1.67 general service 1
  • $2.02 general service 3
Video explanation of Demand Charge

Who determines when a rate increase is necessary and by how much?

Cloverland’s board of directors and management continuously monitor the financial stability of the cooperative to determine when a rate increase is necessary to cover the costs to provide service to our 34,000 members across 4,000 miles of power line in five Eastern Upper Peninsula counties. It is common for cooperatives to conduct a cost of service study to assess rates regularly. It is a comprehensive review of all rates to ensure each member pays a fair share regardless of rate classification [residential, commercial/industrial]. Each member should pay its fair share of costs without having one class subsidizing another.

What members will be impacted the most?

Members with electric heat may see the greatest impact on their winter bills, so we’ve increased our incentives for heat pumps as a lower cost consideration for heating your home. Members can continue to use our online Energy Advisor assessment for guidance on additional savings [].

A chart showing average electric rates across the United States. Michigan's average is $0.16 cents per kWh.

How does Cloverland’s rate compare to neighboring electric utilities?

For perspective, Cloverland members have one of the lowest utility rates in the state of Michigan. Compared to national averages, our rates align with some of the lowest state averages. The increased cost of power supply and materials is causing other utilities to ask for rate increases as high as 15%.

What is Cloverland doing to keep costs down?

Cloverland strives to operate efficiently while adhering to our mission of providing reliable and affordable services. We continually evaluate our operations to keep your rates as low as possible by:

  • Managing our power supply costs. For each dollar collected, $0.60 goes to the cost of purchasing electricity to meet the needs of our members;
  • Implementing beneficial technology, such as our outage management system or advanced metering infrastructure, to provide operational efficiencies and increase reliability;
  • Competitively bidding all contracts to ensure quality service at the best possible price; and
  • Ongoing assessments of our daily operations for opportunities to streamline or improve efficiencies.

What can I do to reduce my electric costs?

Manage your energy use by operating major appliances (dishwasher, washer, dryer) during non-peak hours, after 9 PM and before 8 AM. Replace lighting with LED lights and upgrade to energy efficient appliances. Take advantage of our Energy Optimization program incentives [] – we’ll pay you $50 for recycling an old refrigerator [April-October] and provide a $100 rebate on a new fridge. Keep in mind that we also offer budget billing to level out payments throughout the year. For payment assistance, contact Michigan 211.

I will continue to work with our staff and board of directors to ensure our rates hold steady for as long as possible.