Understanding The Factors Driving Your Energy Bills
This month, I’d like to delve into the factors contributing to rising energy prices. With inflation having impacted everything from gasoline to eggs, the cost of fuels needed to generate electricity is no exception.
Key elements influence energy prices and rates. Some of these factors URE can manage, some you can influence, and others are outside our control. Your monthly electric bill is made up of 3 main components:
Generation Charges
These charges cover the cost of generating or purchasing the energy you use. The Fuel Cost Adjustment in this section has been increasing due to higher fuel prices. It reflects that the power URE purchases from Buckeye Power, our wholesale provider, is becoming more expensive because the fuel to generate power costs more. The Fuel Cost Adjustment enables us to manage fuel cost fluctuations without having to constantly restructure electricity rates.
When you purchase natural gas from URE, the CCF commodity is the first section of your gas bill. It’s a direct reflection of the cost to purchase the gas you used, including transmission and storage costs. Natural gas prices can be quite volatile, leading to monthly changes in this rate.
Transmission Charges
URE relies on investor-owned transmission companies to build, operate, and maintain the high-voltage transmission grid, connecting generation stations to URE’s substations. These companies have significantly increased costs as they continue to upgrade and build new transmission lines to cater to the rising demand from intermittent generation sources. These costs are passed directly onto our customers each month, without markup.
Natural Gas Transmission Charges are bundled into the CCF commodity section of your natural gas bill.
Distribution Charges
The fixed monthly base charge along with a rate per kWh (kilowatt-hour) of electricity or CCF (volume of 100 cubic feet) of natural gas covers costs related to delivering energy to your home. This includes equipment, materials, labor, and operating costs necessary to serve each member in URE’s service territory. Like most businesses, we’ve grappled with supply chain disruptions and steep cost increases for essential equipment. Beyond energy costs, costs for materials, tools, and labor have all increased as well.
Changes in weather have a significant impact on your energy usage, as cooling and heating equipment tends to run longer when temperatures are extreme. However, you can influence this factor. A simple measure such as adding a programmable thermostat can help you reduce energy consumption. In the summer, consider letting the temperature in your home rise slightly, particularly when you’re not there. During winter, let your home cool down a bit more while you’re away, and set your thermostat to warm up to your preferred temperature an hour before you arrive home.
I hope this information clarifies what determines your energy bills. While we can’t control the weather or the rising costs of fuels, please know that URE is doing everything possible to manage internal costs, and to help you save money on energy.
Remember, we’re here to help. Don’t hesitate to reach out if you have questions about your energy bill or need advice on how to save energy at home. Also, if it’s been a while, you should check out the refreshed look of URE’s SmartHub application, which allows you to actively monitor your energy usage (down to the day for gas and hourly for electricity) pay your bill online, and even report or keep up on the status of power outages in your area.
We’re here to help you control your energy costs, it’s all part of being your electric cooperative!