Utilities Face Wholesale Energy Rate Increases
Transparency with our members is one of our guiding principles at Lane-Scott Electric. Sometimes we get to share good news, and sometimes, not so good news. The current challenge is one we are not facing alone. Utilities across the globe are faced with increased wholesale energy prices as a result of the current economic climate.
Electricity prices nationwide have jumped an average of 15.8% the past year, largely due to a 53% increase in natural gas prices. The highest natural gas prices have been since 2008. There was an article published in the October Kansas Living Magazine, that explained in great detail what factors have contributed to the increase. Here’s a quick summary:
1. More electricity is now being produced from natural-gas generation and renewables to make-up for lost production of retired coal-fired plants.
2. U.S. natural gas exports to other countries has increased due to many countries halting imports of Russian gas.
3. Slowed domestic oil exploration following the pandemic.
4. Weather. People consumed more energy during the record setting summer temperatures and extended days of heat this year. Severe weather, whether extreme hear or cold, strongly influences residential and commercial demand for natural gas, pushing prices upward.
More information has been released from the U.S. Energy Information Administration (EIA), forecasting electricity prices to continue rising this year and into the winter months of 2023. Inflation and the war in Ukraine continue to increase international competition for natural gas. The prices will not only affect electricity, but also gas utility bills. Unfortunately, utilities are at the mercy of the volatile energy market.
Here is a chart showing how the price of natural gas has increased in the last 2 years. The spike in 2021 is during Winter Storm Uri when electricity process tripled.
So, what does this mean for you as a Lane-Scott Electric member?
As a not-for-profit utility, co-ops must pass along the cost of our fuel to members. Co-ops don’t make a profit from these costs; it is a pass through from our power supplier to our members. This is shown on member’s bills as an Energy Charge Adjustment (ECA), either as a credit or charge. Lane-Scott includes a $0.06/kWh charge in the cost
of energy to pass along the average cost of wholesale electricity. Whenever the actual cost is above or below $0.06/kWh, that difference is the ECA charge (or credit). For the last several years the Cooperative has been able to pass this on as a credit to our members. Unfortunately, it has now become a charge.
We are estimating based on projected ECA calculations for the remainder of 2022, that an average residential member consuming 800 kWh / month will see an increase of $13-$20 on their monthly bill.
What can you do to help reduce your utility bill?
The ECA cost is based on kWh usage, which is your use of electricity. The easiest way to cut a few dollars from your electricity bill is to manage your electricity use.
- Bump your thermostat settings up a couple of degrees on hot days and down a few degrees in the colder months.
- Switch the most used light fixtures in your home to LED bulbs.
- Lower the temperature setting on gas or electric water heaters.
- Turn the lights off and open your window coverings. This will reduce electricity use and let the sunlight warm your house instead of your furnace.
While we are the bearer of not so good news, we are here to work with you the best we can in these uncertain economic times. If you find yourself in a position where you are unable to pay your electric bill. Please call, we will work with you on a payment arrangement.
There are also programs that can help, such as the Low-Income Energy Assistance Program (LIEAP) available for income-eligible homeowners and renters. The Kansas Weatherization Program, and other local payment assistance resources that can be found on our website: https://www.lanescott.coop/payment-assistance-resources