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 were
finding it to be one of the most challenging years weve 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
The Fuel Adjustment Charge (FAC) that appears on your
bill represents the cost of the fuel for the power plants that generate your
electricity. For the most part, it is the cost of coal, but it also can include
the cost of natural gas and/or purchased power. Purchased power and gas-fueled
power both tend to be significantly more expensive than coal-fueled
The monthly charge is passed to South Kentucky RECC by
our wholesale power supplier, EKPC, and South Kentucky RECC does not keep any
of the fuel adjustment it collects. While market prices for coal and other
power plant fuels have moderated somewhat in recent months, they are dropping
much more slowly than the price of petroleum, which has plummeted in just two
or three months. In addition, there is a delay in the time that you are billed
for the FAC. You receive a bill in December for your November usage, and the
fuel costs for that bill are based on costs in October. In October, two of
EKPCs main coal-fueled units were offline for routine maintenance. (EKPC
tries to schedule maintenance outages for spring and fall months when
temperatures typically are mild in order to minimize fuel costs.) Keep in mind,
these same delays applied while market prices were rising.
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