Concerned about Energy Costs?

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

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 power.

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 EKPC’s 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 offices.