By: Mark Walling, CEO & President
Owning a car was once considered a luxury, but most people today would agree that it’s more of a necessity. If you have one, you are very aware of the fixed cost that you incur whether you drive your car or not. Just to have the car available to use, you must pay for the car, property taxes, license fees, and insurance. In addition to fixed costs, you have expenses for fuel, and maintenance costs such as replacing the brakes and tires. The more you drive, the more you spend on fuel and maintenance. The cost of operating the electric system is very similar to owning and operating a car.
Your monthly electric bill, or “light bill” as we like to say in the south, is composed of two components: a fixed charge, which your cooperative calls the facility charge, and the energy charge.
The energy charge varies month to month, depending on the volume of energy you consume. The weather, heat in the summer and cold in the winter, is probably the single biggest factor that causes your monthly consumption to change throughout the year. The fixed charge, or facility charge, is the same every month until the cooperative has to change it due to the changing cost for the service provided. This facility charge is intended to cover the fixed cost of making the power available at your residence or business if and when you choose to use it.
Coastal Electric does not generate any of the electricity that you consume. We purchase the power from Central Electric Power Cooperative at 13 delivery points throughout our territory. We take delivery at 69,000 or 115,000 volts, step it down to 12,470 volts, then distribute it throughout our territory. When it reaches your home or business, we step it down again to a usable level, typically 120 volts. This distribution requires transformers, wire, and a lot of other equipment to transmit the power to your location. Unfortunately, most of the equipment we utilize in our daily operations has increased between 40% and 100% in the past five years. As a result, your cooperative has to increase the facility charge six dollars per month, or about twenty cents per day, beginning with the January 2024 billing period. For a residential user who consumes about 1200 kWh per month, this is a monthly increase of about three percent. The energy charge remains unchanged, making ten consecutive years without an increase on that component of your bill.
None of us want to pay more for the things we need. Rest assured that your cooperative team is working hard to hold down cost as much as possible, while not allowing the service and reliability to you, our members, to suffer.