If retail wheeling comes to pass, a different infrastructure will be superimposed on these rural areas. As a consequence, there will be many losers. There are 32 co-ops in Kansas. We analyze the economic impact of retail wheeling using two possible scenarios. It is very likely that retail wheeling will force changes in most co-ops' rate structures.
Many utilities use cross-class subsidies.
Most co-ops use a form of price differentiation, setting a lower marginal price for users with larger, more elastic demand, to increase revenue over what it would be with a single rate system. Because under retail wheeling the prices for generation, transmission and distribution will be unbundled, this strongly suggests that retail wheeling will substantially change current differential pricing and subsidized rate structures. Present price differentiation of each co-op is retained. Energy price changes are passed through directly to customers. Using both methods, our regression analyses and expenditure models show that many RUS customers in Kansas will see their rates increase.