By DeAnna Greene & Amy Carlson
Many of us tend to overlook our bills in today’s fast-paced world. Some might not even bother opening them; instead, they use apps for quick payments and move on with their day. We rarely pay attention unless there is a significant deviation from our usual expenses. However, it is crucial to understand your Valley Electric bill and what it encompasses. Understanding your bill not only aids in making informed decisions about electric usage but also provides insight into what exactly you are paying for.
Your electric bill encompasses many different things. Understanding what you are paying for when you pay your power bill can help you understand the importance of Valley Electric’s work. When you turn on that light, you can appreciate what it requires to deliver it.
The cost of being in the electric business has many different facets. We pay not only for the actual consumption but also the transmission costs, peak usage costs, maintenance, operations, interest on loans, depreciation of assets, and more.
Your bill’s “Energy Charge” is the kWh your home has used. This charge is based solely on the power consumed by a location. It is the cost of the electricity purchased from the wholesale market, transmission, and operating costs, all wrapped up neatly into one charge on your bill.
Valley Electric does not produce its power and must purchase it from a wholesale market or power purchase contracts. Some of Valley’s power is attained through power purchase agreements that help keep the power rates stable. The rest is purchased from a wholesale power market. These prices fluctuate and can be unpredictable. The Western power grid is interconnected and is where other energy companies go to purchase power, and during times of extreme weather conditions, energy prices can be quite high.
Transmission costs are associated with delivering the power to your home or business. The power comes from the generation plant and is delivered to your meter. These plants can be hundreds of miles away and pass through more than Valley Electric’s transmission system. There are fees associated with its travel, which are included in the “Energy Charge” line item on your bill.
The operation costs associated with running and maintaining the business are also included in the “Energy Charge” on your bill. These costs include fuel, labor, and other overhead costs that the cooperative endures while continually working to keep the lights on and provide reliable electricity.
A “PCA Charge” is a power cost adjustment. A Power Cost Adjustment (PCA) reflects the difference in the cooperative’s actual wholesale power market costs compared to the planned budgeted costs. The PCA charge is a fluctuating charge that takes the deficit and the overages and spreads them out through 12 months. A PCA’s purpose is to allow Valley to adjust rates to accommodate extreme cost changes, such as rising fuel costs or extreme temperatures. Given the push towards “green energy” across the nation, supply and demand, especially during extreme weather conditions, can cause energy purchase pricing to increase exponentially for periods. Rising fuel costs are another big factor in energy pricing. The PCA charge helps the cooperative continue to cost-effectively provide power to its members without restructuring rates.
A “Basic Service Charge” is used for the general maintenance of the power poles, lines, and equipment that brings the power to the meter. This includes the costs of new poles, wires, and equipment to keep our system as safe and reliable as possible.
Electricity is such a necessary commodity in our lives. Almost every minute of our lives, we are using this essential utility. Because of its regular use, it is easy to take it for granted. Our quality of life requires electricity. It powers our lights, TVs, computers, refrigerators, air conditioners, and so much more. When you open your fridge, curl up on the couch to watch TV, or power on the computer to reach out to others on social media; remember the value that electricity brings to your life.
Our Cooperative remains community-focused, continually priding ourselves on delivering safe, reliable, and affordable services to our members. If at any time you have questions regarding your bill, please contact us at (775) 727-5312.