Cold winter temperatures have been causing concern for many Navopache Electric Cooperative (NEC) members. With colder temperatures came higher usage, resulting in higher electric bills.
January 2013 had 5 days where the overnight low was zero or below zero, and 8 days where the highs were at or below 32 degrees. Last January, there were no days where the overnight low was zero or below zero, and only 1 day where the highs were at or below 32 degrees. With colder winter temperatures it can be expected for people to use additional electricity for heating their homes and businesses.
While higher usage is the primary cause of higher electric bills, there are a few supporting factors that add to the bottom line. In July 2012, the Arizona Corporation Commission approved NEC’s rate case, which went into effect on August 1, 2012. It was the first rate increase for NEC since January 2002. NEC used a third party consulting firm to perform a cost of service study to determine the necessary rate increase of each rate schedule. Increases in each rate schedule varies, therefore, members have varying impacts based on their usage and particular rate schedule.
Over the past several years, NEC has experienced an increase in the cost of power. NEC’s total cost of power in December 2010 was $0.04801 per kWh, in December 2011 it was $0.05707 per kWh, and in December 2012 it was $0.08005 per kWh. Additionally, during the past 8 - 10 months NEC members have experienced an increase in the power cost adjustment factor on their bills. This is due to increases NEC has incurred from their wholesale power supplier. The power cost adjustment factor is an adjustment to the wholesale power cost NEC pays for their power supply. When the power supplier's costs increase due to items such as fuel, renewable energy, environmental (EPA) and regulatory issues, the costs are passed to NEC. NEC then passes those costs through to members on a per kWh basis as the power cost adjustment.
To help members address high electric usage, NEC encourages members to be energy efficient in their daily usage. NEC regularly reminds members to use CFL lighting, caulk around windows and doors, add additional insulation to their homes, replace single pane windows with double pane, install timers on hot water heaters, etc. A large number of the homes in the area were built as second summer time homes and do not have the necessary insulating qualities for the winter conditions. In addition, NEC offers a Time of Use (TOU) rate and Levelized Billing to members. The TOU rate provides a savings on energy costs for electric usage during the off-peak times. NEC's Member Services will review a member's electric bill with them at their request to determine the best rate, including a TOU rate, the member should be on. Levelized Billing provides members, who have been with NEC for 12 months, a set monthly amount on their bill so they do not get a shock on their winter usage and in August of each year their account is trued-up to any outstanding amount owed or credit due.
As a not-for-profit rural electric cooperative, NEC’s rates only generate revenues necessary to cover the cost of wholesale power, operating expenses and debt service.
For more on this story see upcoming article in Tuesday's White Mountain Independent.
© Copyright 2013, White Mountain Independent, Show Low, AZ.