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Record-breaking heat, record electric bills

Record-breaking heat, record electric bills

 

By NICHOLAS SAKELARIS | CoServ 

CoServ Members are having sticker shock when they open their electric bills and for good reason – the summer heat was one for the books and the cost per kilowatt-hour peaked at some of the highest prices it’s ever been thanks to the steep increase in wholesale power costs.

These higher electricity costs are affecting all utilities in Texas this summer, not just CoServ Members.

What does natural gas have to do with electricity?

The biggest culprit for higher electricity prices has been the rise in natural gas prices. Natural gas fuels 38 percent of the electricity generation in the Electric Reliability Council of Texas (ERCOT). As natural gas prices go up, the cost of wholesale electricity also rises.

Natural gas prices have gone from $2 per million British thermal units to as much as $9 per MMBtu in the last 12 months.

What makes up my rate?

Your rate is made up of three parts: wholesale power costs, transmission and substation costs, and local delivery costs. Because CoServ is a distributor, we buy our electricity from other sources. Above is a breakdown of the costs that go into the price you pay per kWh.

As the cost of electricity goes up and down, those changes are passed through to CoServ and we pass those on to our Members. As an electric co-op, we have no incentive to mark up the electricity we purchase for you.

To learn more about how your rate is calculated, visit CoServ.com/Rates.

Would I be better off if I had retail electric choice?

Electric cooperatives, like CoServ, are governed by a democratically elected board of directors who work for you, the Member. For-profit REPs are working for their shareholders instead and aren’t concerned with your best interest.

Aside from this, if natural gas prices drop in the next six months, CoServ Members will reap the benefits because we would pass through these lower costs to you. Retail Electric Provider customers will likely be locked into their rates for multiple years with no relief – unless they pay a penalty to break their contract.

LOOKING AHEAD

CoServ remains committed to providing the lowest priced electricity possible to Members. As we’ve mentioned previously, the Brazos Bankruptcy filing is coming to a resolution, and with that, we will have a better idea of the impact to CoServ and our Members. Please visit CoServ.com/Brazos for the most up-to-date information. 

 

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