A provincial energy cooperative will offer full 2022 profits to stabilize members’ bills in an unprecedented decision Wednesday as natural gas prices soar and customers charge higher energy bills. decided to
The nonprofit Sulfur Springs Valley Electric Cooperative is a member-owned distribution cooperative that powers more than 60,000 locations, including homes, businesses, electric wells and other members.
To stabilize member bills, the organization’s board of directors approved a decision to apply last year’s $8 million in profits to outstanding wholesale power and fuel cost adjusters. Fuel cost.
The organization’s CEO, Jason Bowling, said cooperative members are seeing a surcharge of 5 cents per kilowatt on their bills. This equates to an average of about $35 per month plus taxes for standard residential use of 700 kilowatts per month.
“Our rate, approved by the Arizona Business Commission, is about 10 cents per kilowatt-hour, one of the lowest in Arizona. This is what the Wholesale Fuel Cost Adjuster’s rate represents,” Bowling said.
Other companies are also charging fuel surcharges to pay for increased costs. Arizona’s largest utility, the Arizona Public Service Company, has $456 million more in fuel than he collects from its customers.
Sulfur Springs has outstanding fuel bills of $22 million. Of that total, in 2022 he will accrue $10 million, and this year he will add $12 million.
Sulfur Springs spokesman Eric Peterman said: “As expected, if natural gas prices fall in the future, we will gradually reduce our fuel adjusters to ‘compensate’ for the unrecovered energy costs incurred in 2022.” I expect to be able to.By email.
Adding last year’s operating margin to pay for some of the debt will allow the company to keep its fuel conditioner at 5 cents per kilowatt hour without increasing for the foreseeable future, Petermann writes.
He pointed out that if the $8 million is not applied to the debt, the fuel surcharge will need to be further increased to pay off the $22 million.
This isn’t the first time cooperatives have helped their members by lowering bills. Co-operatives periodically credit their customers with what is called a capital allowance, or money that is credited to members from the previous year’s profits.
In 2021, the co-op has released the most credits to its members ever released. This made him $4 million.
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The cooperative released $5 million in December. This is the highest amount ever the organization has retired in his one year to offset the impact of rising fuel costs due to inflation. Members who received services in 1996, 1997 and 2021 received capital allowance payments.
Additionally, in order to protect members from sudden increases in dues, the cooperative decided to share most of the $10 million raised this summer due to skyrocketing fuel costs.
Bowling said summer is when people use the most electricity, and seeing electricity prices skyrocket could have been “devastating” for customers. Slowly increased cost that increments over the months.
Bowling said the $8 million in earnings that would be used to pay off the fuel debt would eventually be capital deductible, but it could take decades to achieve.
Bowling asked for patience from its members as the cooperative worked with outside consultants to determine what the fee would be and how it would affect members’ billing.
He said an update is expected in the coming weeks.
Bowling said the organization will continue to do what it can to stabilize energy costs for its customers.
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The cooperative is also committed to investing in renewable energy, including the construction of a 20-megawatt solar array with a 20-megawatt battery system currently under construction at McNeill.
Sulfur Springs is also considering adding two turbines to its Apache Power Station in Cochise County, with plans to add solar and battery system projects in the future.
“These measures will improve reliability and reduce our reliance on volatile energy markets,” Bowling said in a press release.
Organizations also work with so-called financial hedges to lock in stable prices in the future.
The Republic of Arizona reported that fuel price increases are due to multiple factors. These include the use of natural gas instead of coal, hot summers, lack of storage, and increased exports to Europe.
“We are at our limit when it comes to how much AEPCO will pay for fuel to generate electricity,” Bowling said, referring to the Arizona Power Cooperative, a nonprofit generation and transmission company. “What makes us different as a cooperative is that we can apply our operating income to the outstanding fuel bank charges where other utilities pass that margin on to their investors.”
The cooperative’s service area covers portions of Cochise, Graham, Pima and Santa Cruz counties, as well as Sierra Vista, Huachuca City, Patagonia, Elfrida, Benson, St. David, Bowie, San Simon and Wilcox. , Sonoita, and Pierce-Sunsite communities. According to its website.
Covers Southern Arizona azcentral.com In the Arizona Republic, the nonprofit Report for America is partnering with The Republic to provide funding.
Please contact the reporter at sarah.lapidus@gannett.com.
