By Ken Schlimgen
Electricity plays an essential role in everyday life, and this time of year it makes the holidays more enjoyable. We depend on it to keep us comfortable, entertained, and safe, and because most technology uses electricity, it also helps us to be more efficient. If the power goes out, even briefly, our lives can be disrupted.
Recently, I was approached by a friend at the grocery store who is also a member of our cooperative. During our conversation, he asked questions about our electric system, the 2024 electric rate increase, facility charges and more. If I may, I would like to share parts of our conversation.
The system that delivers your electricity is often described as the most complex machine in the world. We all use different amounts of electricity throughout the day, so the supply and demand for electricity is constantly changing.
Everything that makes up our electric delivery system is aging, and we are strategically replacing it at a pace to maintain reliability, increase capacity and, to our best efforts, maintain affordability.
Inflation has impacted our everyday purchases, like my grocery list, and the cost of your cooperative’s materials. Interest rates and the cost to hire and retain a quality workforce have increased. The biggest hit to your cooperative for 2024 is the increase in wholesale power costs, which can be tied back to inflation, interest rates and labor. These are the main factors that impact Central Electric’s operating costs, and ultimately the electric rates. Some factors we can manage, while other factors are beyond our control.
There are two parts to most electric bills. They are the facility charge and the energy or kilowatt hour (kWh) charge. Larger customers also have a demand charge, which is a more complicated topic I can try to explain in a future article.
The facility charge is meant to cover the costs associated with delivering electricity to your meter. This includes vehicles, tools, materials, labor and all the maintenance necessary to keep the lights on, regardless of the amount of electricity needed.
Unfortunately, our service area is sparsely populated. We have the third lowest meter density in our state at 1.6 meters for every mile of line that we maintain. If there were more meters in every mile of line, more people would share the costs and the facility charge could be lower. Our low density puts upward pressure on the facility charge applied to every bill.
The other component of your monthly bill is the kWh charge. This charge is intended to cover the cost of purchasing the electricity you consume. You’ve likely noticed the amount of energy you use can vary from month to month and is typically impacted by weather and your activities.
Energy consumption is an area that you have some control over. You can lower your monthly bill by using energy-efficient equipment, adjusting thermostats and by simply turning things off when they are not needed.
Please know that Central Electric is doing what it can to control internal costs and influence what we pay for wholesale power. We’re here to help you, too. Visit our website or contact us for advice on how to save energy at home.
Have a joyous holiday season and until next month – be safe!