KEYSTONE HEIGHTS, Fla. – Beginning this month, Clay Electric Co-op has lowered the cost of power for its members by $3.20 per 1,000 kilowatt hours (kWh) of electricity. This means that members will pay $113.90 for 1,000 kWh. Last month’s cost was $117.10.
The cooperative is able to lower the cost of power due to the dropping price of natural gas, which Seminole Electric Cooperative uses to generate a sizable portion of the wholesale electricity it provides Clay and eight other distribution cooperatives in Florida.
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“Our lower power cost comes as a result of our power supplier continuing to purchase fuel at the lowest possible price,” explained General Manager/CEO Ricky Davis. “Based on projections of the cost of fuel used to generate power, our cost of power should remain stable for months."
The lower cost of power will be reflected in a lower Power Cost Adjustment (PCA) on members’ monthly power bills. The PCA decreased from $24.60 last month to $21.40 this month.
With this month’s drop in the PCA, members’ cost for 1,000 kWh is now the third lowest rate among the 15 electric cooperatives in Florida. Clay Electric is also lower than many of its neighboring utilities.
This month, members of Clay Electric who are entitled to a Capital Credits refund will see their Capital Credits refund credited to their bill, which means this month’s bill will be even lower.
Capital Credits are a reflection of the fact that Clay Electric is a not-for-profit cooperative. This means that any margins left over at the end of the year after all expenses are paid is set aside in each member’s name to be refunded at a later date as Capital Credits. That’s a unique benefit of being served by a member-owned cooperative.
What is a power cost adjustment?
Electric utilities commonly use a Power Cost Adjustment to help them recover a portion of their wholesale energy costs that aren’t covered in their base rates. The Florida Public Service Commission authorized utilities to use a Power Cost Adjustment following the Arab Oil Embargo in the early 1970s. Back then, utilities relied more heavily on oil for power generation.
Clay Electric’s base energy rates are designed to recover an estimated amount of power cost each month. However, because generating costs fluctuate, the amount Clay pays Seminole Electric Co-op (Clay’s wholesale power provider) may be greater or less than the estimated cost Clay’s base rates are designed to capture. Because the actual power cost each month is different from the base rate, the power cost adjustment (PCA) helps Clay collect the difference.