Power Cost Relief Coming Your Way!
The Board of Directors recently approved a BCREMC Wholesale Power Cost Relief refund for members. During this time of inflation, BCREMC is trying its best to alleviate some of the impact of increasing wholesale power costs for our members. This special refund is for all current members that receive electricity from us and is based on kWh usage beginning January 1.
Why is the cost for power increasing?
It’s a combination of several factors, driven by inflation, supply chain issues created by the pandemic, and most recently, the war in Ukraine. Fuel supply costs have increased dramatically, causing electricity prices to do the same. It’s the most volatile period we’ve seen in the last 20 years.
Electricity must be generated or purchased. Generation requires a fuel source, primarily natural gas and coal. Coal prices are up nearly 300% since this time last year, and natural gas prices have increased more than 100% year over-year.
What is the reason for the relief?
During this time, when costs for all goods and services are at an all-time high, BCREMC is absorbing some of the increased wholesale power costs (shown as Wholesale Tracker on your bill) to keep rates as low as possible for our members.
How much will the refund be?
The refund for members will fluctuate monthly, based on margins the cooperative generates in the previous months and the amount of electricity that you use. The refund amount per kWh will be listed on your bill as “Wholesale Power Cost Relief” and will change monthly. The refund amount will be a credit of $0.00571 per kWh for bills sent mid January and first of February.
BCREMC is in solid financial standing to give back to our membership during this time of inflation, when members need financial relief the most. This is a newly established refund to absorb some of the rising costs of electricity and to help our members.
Who will receive the refund?
All current members who receive electric service from BCREMC will see the Wholesale Power Cost Relief amount on their bill, beginning with mid-January bills.
BCREMC will issue the refund monthly as a credit beginning on bills mailed on January 15 and Feb 1. It will be listed as “BCREMC Wholesale Power Cost Relief” on your bill in the details.
Why is this refund different?
This refund is different because we are in good financial standing to give back current margins to help alleviate the increasing price of wholesale power. Typically, at the close of each fiscal year, all revenue received in excess of expenses, known as margins, is allocated back to the membership in the form of capital credits. Those credits are then retained and used by the cooperative as capital to operate for approximately 25 years before being retired and paid to the members. This year, we will be monitoring margins closely and refund a percentage of the previous month’s margins to our members, month by month, instead of waiting and allocating all margins at the end of the year in capital credits.
What is the Wholesale Tracker on my bill?
The power we buy from our wholesale power provider, Hoosier Energy, to sell to you constantly fluctuates in price. Because of this, the Wholesale Tracker is on your bill monthly and changes quarterly to recoup or credit the fluctuating cost of power we buy on your behalf. The tracker is a pass through from Hoosier Energy and is calculated based on your kWh usage. The Wholesale Tracker for the first quarter of 2023 is $0.012040 per kWh, an increase of $0.006009 per kWh from last quarter. The refund was created to offset the increase as much as possible.
How long will the refund last?
It’s impossible to predict how long we’ll be in this environment, but we expect the volatility and increased costs to continue for the foreseeable future. The board of directors will approve this refund in their monthly board meetings and will extend this refund, or other relief measures, for as long as we can financially do so. Please know that we are doing everything we can to minimize the negative impact of increased power costs during this time.
Remember you can directly impact your bill by reducing the amount of electricity you use. It’s more important than ever to be energy efficient. See page xxx for tips on how you can save electricity this winter.