Dear Y-W Member:

Please find enclosed the Y-W Electric Association, Inc. (YW) Notice of Change in Tariff sheet corresponding to a 3.53% average overall rate increase for the year 2024. The actual rate increase you will receive depends on the specific rate class you are in, the amount of energy you use from month to month, and your pattern of usage in each billing month.

Refer to the Notice of Change in Tariff for information on how each rate class will change and the average overall rate increase for each rate class. Of particular note for the Residential and Small Commercial rate classes, YW will add a demand billing component in addition to the energy and service charge components on your 2024 monthly bill. Please refer to the included demand billing information sheet for details about what demand represents and how this will be shown on your bill for 2024. YW has an instructional video and a residential rate calculator posted on our website at https://www.ywelectric.coop/understanding-demand-billing for further information on demand billing and how it will affect your residential power bill going forward.

The present need for an increase in electric rates is driven primarily by cost increases related to YW's wholesale power supply and secondarily to YW's commitment to upgrading and rebuilding the electrical system. YW's wholesale power supplier is estimated to increase rates to YW by 7.6% for 2024.

YW's construction work-plan is addressing a systematic reinvestment into the power system to replace and refit electrical infrastructure that is at the end of its useful life in being able to provide reliable electric service. The additional investment increases YW's depreciation costs. To pay for the construction, YW gets about 47% of the required revenue through rates and 53% from borrowing loan funds, which raises YW's interest costs. High inflationary pressures on materials and equipment continue to raise costs for the construction and maintenance of the power system.

To comply with our lender's mortgage covenants and to keep YW in a financially healthy condition, the YW Board of Directors has made the decision to increase rates effective January 1, 2024. Please review the attached Notice and contact the YW office for additional details or to answer any questions you have.

Sincerely,
Trent Loutensock
General Manager