Sometimes, the need to make a change steers us toward better days. As we anticipate the arrival of cooler weather, I’d like to talk about the new fixed demand charge you’ll soon notice on your Wiregrass Electric Cooperative monthly bill. Although this change isn’t of the sunshine and rainbows variety, it is necessary as we move forward.
To help explain this billing change, I’d like to use an analogy to illustrate the ins and outs of our power costs. Think of your energy consumption like a vehicle’s odometer, logging the total miles driven over time. Demand, on the other hand, is the speedometer, recording the highest speed during that drive.
Understanding your energy consumption is pretty simple — you pay a set rate per kilowatt-hour of electricity you’ve used in the past month. It doesn’t matter when you use the energy, it just matters how much.
Now, this new $6 fixed demand charge is tied to the speedometer side of the analogy. It recovers a portion of costs caused by peak demand periods that occur between 6 and 9 a.m. in the winter. We’ve been mostly recovering these demand costs through the energy rate. But, with nearly every residential meter having around a 3 kW demand during this peak period, it’s become necessary to adjust our billing structure. Implementing a fixed demand charge is a fairer way to recoup demand costs, ensuring our cooperative remains fiscally sound and resilient.
This change, my friends, is about fairness, reliability, and transparency.
We’re doing our part at Wiregrass Electric, delivering reliable service with a smaller workforce compared to other co-ops our size. But, we must also navigate the broader economic dynamics at play that shape our power costs.
Since June 2022, the U.S. has been the world’s top exporter of liquified natural gas. We’ve seen supplies tighten and costs increase at home. This trend impacts us directly, as natural gas generates most of the electricity we purchase for distribution. Coupled with inflationary pressures that have driven up the cost of materials and growing power demand, adjustments in our rate structure are necessary to sustain reliable service.
We’ve approached this change carefully, conscious of the potential effect on your budgets that, much like ours, are stretched thin by inflation.
The silver lining is that everyone can contribute to reducing peak demand. Simple changes, like installing a water heater timer or a programmable thermostat, can significantly lower peak demand, which is our highest capacity need. This, in turn, can reduce our power costs in the long term.
Starting in October, you’ll see the new residential fixed demand charge on your bill. We stand by the necessity of this change to continue offering service you can count on.
As we celebrate Labor Day, let’s extend our heartfelt thanks to the diligent co-op employees whose tireless efforts keep our lights on and our lives moving.