At Wiregrass Electric Cooperative, we are steadfast in our mission of providing local, affordable and dependable electric service to every member, whether you’re the owner of a big business or someone on a fixed monthly income.
We are pressured daily by challenges that affect our ability to fulfill that mission. One of those challenges is the growing demand for electricity.
How does that demand differ from overall energy consumption? Imagine electricity in the context of a car: The car’s speedometer shows how fast it’s being driven at any given time, similar to how demand measures the amount of energy being used at one time. Meanwhile, an odometer tallies the total distance traveled, regardless of the car’s varying speeds, much like consumption measures the total energy used.
Demand has a big impact on the price WEC pays for power, accounting for about one-third of our costs. This is because we must purchase enough generating capacity to meet the highest demand, even if we only reach that maximum for a few hours a year. Take Christmas Eve last year as an example. That morning was extremely cold, triggering all of our residential members to heat their homes at the same time. As a result, our system experienced its highest- ever demand for electricity and registered a new maximum demand for WEC. Now, we must pay extra to reserve that level of generating capacity so we can access it when members need it.
As a national trend, electric demand and usage are climbing right along with the costs of doing business. Electric utilities all over the country are being forced to charge members more for service. We were fortunate to be able to shield members from much of the effect of skyrocketing natural gas prices last year, which impacted power production costs. However, the increased cost was staggering, and we couldn’t absorb all of it.
To recover some of that increase, we applied a power cost adjustment, or PCA, to your bill. We’re proud that it’s been a much lower cost adjustment than what was charged by many other utilities in the region. The PCA is a temporary debit, but for the meantime it must remain as we deal with an increase in our demand expense.
We are always working to keep electricity at a
great value. In doing that, we must consider how our members use energy. For example, close to 80% of our members are residential, while less than 20% of members represent commercial or industrial accounts. This imbalance in WEC’s consumer base creates what is referred to as a “low load factor,” because businesses and residents use power much differently.
Typical residents have a pretty predictable routine. They wake up in the morning, adjust the thermostat, take a shower, maybe shave or use a hair dryer, cook breakfast and then head to school or work. Very little electricity is used while they’re away. When they return home, they cook dinner, wash and dry clothes, watch TV and wash dishes, bumping up their electric use in the afternoons and evenings.
These power consumption habits create high demand for electricity during certain times of the day that we must prepare to meet with equipment, power generation and manpower. However, that higher capacity is only needed a few hours per day — usually during cold mornings and hot afternoons. To offset this imbalance and maintain low rates, WEC focuses on improving the energy efficiency of homes and businesses by sharing information and offering incentives. We also work with many economic development boards to attract more businesses to our area to better balance the load factor aspect of demand.
In considering current consumer behaviors and industrywide trends, we are exploring options for a rate structure based on demand that we believe will best serve all our members. Any pricing adjustment will be carefully considered by WEC’s administration and our board of trustees before it’s implemented.
For now, we are working diligently to empower members to make smart choices concerning their demand that could help them experience immediate energy savings. In fact, you’ll see some great tips to lower demand on the next page.
Whether you’re a member living in a one- bedroom apartment or operating a storefront, you are on the hearts and minds of all of us at Wiregrass Electric Cooperative as we weigh all decisions. I remain confident in our ability to continue providing you with reliable and competitively priced electricity in spite of any challenges that we may face.