As we begin a new year, CoServ looks forward to continuing its record growth and commitment to bringing you safe and reliable energy solutions. Whether through the record-breaking addition of new electric and gas meters, adding more talented employees to serve you best, or continuing to make a positive impact in our communities, we are committed to you, our Members. With that, the Brazos Bankruptcy is coming to a close and we look ahead to what this means for our Members.
The decision to utilize securitization took months of deliberation, as to ensure that we found the most cost-efficient method with the lowest overall impact to our Members. CoServ believes that securitization will have the least impact on our Members and provide the cooperative with the financial flexibility we need to continue serving our existing Members while adding thousands of new meters every year.
In an effort to be fully transparent about the costs, CoServ Members will start seeing the Securitzed Charge Recovery Factor (SCRF) as an additional line item on their bills in early 2023.
At least every six months, the amount that is charged on a per kWh basis will be reviewed, and adjusted as needed, to ensure CoServ is collecting the appropriate charges. As CoServ continues to grow, the per kWh amount that is charged should be reduced due to additional contributions from new CoServ Members.
Under the bankruptcy reorganization plan filed by Brazos, Brazos will be selling their generation assets in 2023. Additionally, CoServ will no longer have a power purchase agreement requiring us to buy power from Brazos and will assume control of our own power purchases. By doing this, CoServ expects to save millions of dollars per year relative to the costs we previously paid to Brazos.
What this means for you, the Member, is that with CoServ’s ability to buy competitively in the power market, it should mitigate the impacts of the securitization charges that our Members will see on their monthly bills. This is because we will be able to reduce our power purchase costs, ultimately lowering the costs that are passed through to our Members and balancing out the securitization charges.
CoServ takes its responsibility to its Members seriously, and we want you to know that we are doing everything we can to continue providing you safe and reliable power.
It is important to remember that the effects of Winter Storm Uri and the extraordinary costs incurred during this time affected CoServ and all of Texas under ERCOT. Retail Electric Providers and Cooperatives must distribute these costs to their Customers and Members.
Would I be better off if I lived in the deregulated market with retail electric choice?
No. The unprecedented costs from Winter Storm Uri will affect everyone under ERCOT, including the retail electric providers (REPs). Based on CoServ's analysis, REPs have increased the margins embedded in their rates to help them recover from Winter Storm Uri.
In November 2022, when this article was written, the average REP rate was 16.14 cents per kilowatt-hour for a fixed 12-month plan based on 1,000 kilowatt-hours of usage as shown on PowertoChoose.org. That’s about 3 cents per kWh higher than CoServ’s current rate for the same usage. For a true apples to apples comparison, both the average REP rate and CoServ's rate are calculated with all applicable energy, wires and customer charges factored in.
It's important to note that REPs may not itemize the Winter Storm Uri charge on bills and they aren't under obligation to communicate about it. CoServ is letting Members know that the charge will be factored into bills starting early this year.
I joined the cooperative after the winter storm. Am I subject to the securitization charge?
Per Senate Bill 1580, all Members in CoServ’s service area are required to pay the securitization charges regardless of whether they were a Member or not at the time.
However, one of the benefits to being a CoServ Member is that we are not run by shareholders, and our responsibility is to you, our Members.
Where can I find the most up-to-date information on the Brazos Bankruptcy and Securitization?
Click here to learn more.