Increasing Power Costs Drive Need for Rate Adjustments

By Emily Compton

Plumas-Sierra Rural Electric Cooperative has experienced a cost of purchased power increase of $16.2 million between 2021 and 2022, and forecasts an additional increases in 2023. Graphics by Plumas-Sierra Rural Electric cooperative.

Americans have felt the pressure of rising costs across the country, whether it be at the grocery store, the gas pump or buying lumber for their DIY home project. Unfortunately, your cooperative is not immune from these cost increases and is also feeling the effects of inflation. Plumas-Sierra Rural Electric has worked hard to mitigate rising costs.

Plumas-Sierra Rural Electric Cooperative (PSREC) meets the energy needs of its members each month by producing its own generation and purchasing power in the power market through short- and longterm contracts.

Wholesale power delivery is a significant expense in providing electricity to member’s homes and businesses. PSREC’s power delivery costs in 2022 are projected to be 63% higher than 2021.

Your cooperative is also seeing rising costs in operating equipment necessities, such as transformers, meters, poles and wires. Costs for some of these items have more than doubled, along with delayed delivery times due to supply chain issues.

What Is an Electric Cooperative?

PSREC is a not-for-profit, electric cooperative. Electric cooperatives are private, independent electric utilities owned and democratically governed by the members they serve. They are organized under the Cooperative Principles, anchoring them firmly in the communities they serve and ensuring they are closely regulated by their member owners. As not-for-profits, cooperatives return any margins to consumers on the basis of patronage called capital credits. Since there are no investors, the locally elected boards of directors have the cooperative’s mission and purpose in mind: to provide safe, affordable and reliable electric service in rural California.

PSREC is governed by a 7-member board of directors elected by you. You can find the contact information for your director on the back page of the Ruralite magazine. The board sets policies, strategic direction, rates and budgets. They attend classes and work diligently to understand the complexities of the electric utility industry and the telecommunications business. We thank them for their hard work and commitment to PSREC.

How Much Are the Rate Increases?

As discussed in previous issues of Ruralite by Bob Marshall, PSREC’s General Manager. 2 rate increases were approved by the PSREC Board of Directors. Despite PSREC’s best efforts to prolong any further increases and to ensure financial stability of your cooperative, the board of directors voted on and approved a facility fee increase for all service types effective November 1, 2022, and an additional kilowatt-hour (kWh) increase effective January 1.

The residential facilities charge increased to $49.99 per month. The small business rates increased to $87.99 for single-phase service and $119.99 for three-phase service effective November 1, 2022. At that time, there was no increase to the kWh charge.

Effective January 1, the board of directors approved a wholesale power cost adjustment of 2 cents per kWh for the first quarter of 2023. The biggest drivers of the WPCA charge are the lack of our federal hydropower due to extremely low reservoir levels at the Bureau of Reclamation dams in California and extremely high wholesale prices for power and natural gas throughout the Western United States. The wholesale prices are comparable to the worst of the 2000 power crisis. Read more information about the Wholesale Power Cost Adjustment (WPCA) in the manager’s message.

How Will My Bill be Impacted?

On an average residential bill of 1,000 kWh, there will be an increase of approximately $20 a month from the WPCA.

Are These Rate Adjustments Permanent?

The increase to the facility charge is permanent. The WPCA will be adjusted quarterly as the year progresses depending on conditions.

Check Plumas-Sierra Rural Electric Cooperative for the most up-to-date information on the WPCA. The WPCA may change as conditions change. It is possible the impact of high natural gas prices for the first part of 2023 could force another WPCA increase. Currently, we do not see the power cost adjustment going down.

What Can Members Do to Save Money Today?

Based on the October 2022 Consumer Price Index 12-month increase from October 2021 to October 2022. Shelter: 6.9%; Grocery: 12.4%; Gasoline: 17.5%; Energy: 17.6%
Data from October 2021 to October 2022 shows basic costs for everyday goods are rising.

PSREC offers resources to help members understand their energy use. Visit our website for more information. These tools can help members become more energy efficient as well as learn how to improve the way energy is used. PSREC also offers rebates for the purchase of high-efficiency appliances, as well as high-efficiency HVAC and weatherization upgrades to your home.

PSREC’s winter rate assistance program offers a discounted rate for the kWh charge during the winter heating season, November through April. Program eligibility is based on family income using an annual income of up to 190% of the federal poverty standard as qualifying eligibility. For more information, call (530) 832-4261 or visit our Low Income page.

The Low Income Home Energy Assistance Program  (LIHEAP) helps keep families safe and healthy through an initiative that assists families with energy costs such as home electricity bills. For Lassen County LIHEAP information call the Lassen Economic Development Corp. at (530) 256-3531. For Plumas and Sierra Counties call the Plumas County Community Development Commission at (530) 283-2466. For Washoe County call the Nevada Home Energy Assistance Crisis Intervention Program at (775) 684-0730.

Rate increases are difficult and your board does not take rate adjustments lightly, but this change is necessary to cover operating expenses and keep your cooperative financially sound.

We understand members face economic challenges, and we will continue do everything possible to control costs by operating safely and efficiently while providing the most reliable electric service possible.

Check out 30 tips on How to Save Energy and Money. Be on the lookout for more ways you can save in upcoming Ruralite Editions.