Concerned about Energy Costs?

Most people are. As a not-for-profit distributor of electricity to more than 65,000 homes and businesses in south central Kentucky, South Kentucky RECC shares those concerns. Our mission is to provide a comfortable living and working environment for our members at the most affordable cost. But we’re finding it to be one of the most challenging years we’ve faced since our cooperative was formed in 1938.

Below is an explanation of the four major categories you see on your bill each month: base electricity usage, fuel adjustment, environmental surcharge, and taxes. There are a number of factors converging to put pressure on energy costs, and electricity is no exception. The two primary drivers are higher costs for fuel and more stringent environmental regulations.

1. Electricity Usage

Customers are charged for electricity by the kilowatt-hour (kWh). The good news is that Kentuckians pay among the lowest average electric rates in the nation.

The portion of your bill that covers distribution services (the service we provide) includes putting in new lines, maintaining existing ones, responding to emergencies caused by acts of nature and accidents, ensuring safety, and assisting with energy audits and other programs beneficial to our members. South Kentucky RECC has worked hard to operate as efficiently as possible to keep these costs down.

More than 70 percent of the money you send to South Kentucky RECC goes to our energy provider, East Kentucky Power Cooperative (EKPC), which generates the power we distribute to you. We have a long-term contract to purchase power from EKPC to distribute to you. Like South Kentucky RECC, EKPC is a not-for-profit organization run by and for its members.

2. Fuel Adjustment Clause

Our power supplier is seeing similar kinds of price increases for fuel to make power that we’ve all seen at the gasoline pumps. Prices for many types of energy have increased all across the country and across the world. The Fuel Adjustment Clause is a line item on your bill that reflects monthly increases or decreases in fuel and other costs. The monthly charge is passed to South Kentucky RECC by our wholesale power supplier, EKPC. It varies depending upon power purchases by our supplier, fuel price changes and the weather.

The Public Service Commission, our governing body, allows this additional charge because it knows power generators would soon be out of business if they had to absorb the swings in prices for coal, natural gas and other fuels to generate power. The amount varies by month.

3. Environmental Surcharge

Environmental Protection Agency (EPA) clean air regulations have become increasingly more stringent, and the cost to comply with them has increased as well. After absorbing these charges for many years, the costs increased to such an extent that EKPC had to begin passing them along to South Kentucky RECC and other member cooperatives. The surcharge appears on customers’ bills as a percent of usage.

Taxes added to your bill are another pass-through that South Kentucky RECC collects and sends on. An example is the school tax, which is set in each community in which we operate.

Please remember that we have energy advisers who can suggest inexpensive steps to eliminate inefficiencies in your home or business, possibly lowering your bill. Some members have been able to reduce their monthly bill considerably based upon our advice.

South Kentucky RECC is owned and governed by its members. We welcome your questions and invite you to browse additional information on our website at www.skrecc.com. Call us at 800-264-5112 or visit us at our local offices.