What is the Basic Charge?
The basic charge is the cost to make service available. This includes the cost for line construction and system maintenance, cost of poles, wire, equipment, vehicles, tree trimming, billing, etc.
Why do many cities not have a basic charge?
Cities and towns have an average of 48 customers per mile. Itasca-Mantrap has an average of 5.8 Members per mile of line. Therefore, Itasca-Mantrap has only 5.8 Members from which to recover the investment of $20,000 to build a mile of single-phase line. In contrast, a municipal or city could recover that cost from 48 customers. Itasca-Mantrap needs a basic charge because we do not collect enough revenue per mile of line to cover our fixed costs.