Commissioners press 1803 Electric Cooperative on rate claims and new wholesale tariff

The Public Service Commission accepted an uncontested settlement allowing 1803 Electric Cooperative to amend its wholesale formula rate tariff and implement a transmission and distribution cost adjustment clause, but commissioners used the hearing to press 1803 officials on rate projections and the practical effects for consumers.

Commission staff told the Commission that the settlement was uncontested and fell under Rule 57, recommending approval. During a question-and-answer period, commissioners sought clarity about earlier claims that joining 1803 would make rates ‘‘about 20%’’ cheaper compared with alternatives. Brian Hobs, identified in the record as CEO of 1803 Electric Cooperative, said the earlier certification analysis showed wholesale costs roughly ‘‘17% below that option’’ and that recent internal comparisons still showed the wholesale component lower than competing options. Hobs said the wholesale component he presented is ‘‘still projected below what our other options were at that time and that's what we've represented.’’

Northeast Louisiana board leader Jeff Churchwell, speaking for one of 1803's member distribution cooperatives, provided monthly wholesale ranges for his cooperative and said the plan should deliver rate stability: ‘‘our rates range anywhere from 6.8 cents up to 8 cents wholesale cost . . . what we're what we see is a rate stability for Northeast and its membership through 1803.’’

Commissioners repeatedly noted that wholesale-cost comparisons do not automatically translate to retail bills, because each distribution cooperative adds retail-level charges. Commissioners asked whether 1803 had performed a direct retail-level comparison to investor-owned utilities; 1803 officials said that specific retail-level comparison has not been done, and that retail comparisons would require projections of investor-owned utilities' future rates.

Commissioners also pressed 1803 about the roughly $4 million of new marginal revenue referenced in testimony, asking how the figure was calculated and what it would fund operationally. 1803 representatives said the figure reflects efforts to develop operating reserves and maintain days of cash on hand for routine operations and potential payment hiccups, explaining the margin supports stability as membership and operations move into regular operation.

The Commission voted to accept the uncontested stipulated settlement under Rule 57, enabling the tariff amendments to proceed. Staff noted that tariff and cost-recovery items may be subject to future review in FRP or rate cases at the distribution level. The Commission directed 1803 and its member cooperatives to ensure clear disclosure to boards of directors and customers about the difference between wholesale projections and eventual retail rates.