Understanding Your Electric Bill
By Richard McLeon, General Manager / CEO
August is typically one of the warmest months of the year, and that means air conditioners across our community are working overtime to keep homes comfortable. During periods of extreme heat, many members may see an increase in their electric bills and wonder what factors contribute to the cost of electricity.
At the Lane-Scott Electric Cooperative, Inc. we believe understanding your electric bill is an important part of being an informed member. While the total amount due may seem like a single number, it actually reflects several different costs associated with delivering reliable electricity to your home or business.
Energy Charges
The largest factor is often the amount of energy you use. Electricity is measured in kilowatt-hours (kWh), and the more energy your household consumes, the higher your bill will be. During the summer, air conditioning is typically the largest driver of increased energy use. When temperatures climb into the 90s or higher, our cooling systems run longer and more frequently, consuming significantly more electricity than they do during milder weather.
Lane-Scott Electric Cooperative incorporated a demand charge, measured in kilowatts (kW) a few years ago, to ensure those who put larger demand on the grid pay a proportionate share of costs. The demand charge is measured in 15-minute intervals and charges the highest kW interval during the billing period.
Cost of Generation and Transmission
Another major factor is the cost of generating or purchasing electricity. Like many cooperatives, Lane-Scott Electric purchases power from Sunflower Electric Power Corporation. The cost of producing electricity fluctuates based on fuel prices, including natural gas, coal and other energy resources used to generate power. Changes in wholesale power costs influence the price of electricity delivered to members.
Transmission costs also play a role. Before electricity reaches your home, it must travel across a network of high-voltage transmission lines that connect power plants to local distribution systems. Transmission equipment requires ongoing maintenance and upgrades to ensure reliability, especially as electricity demand continues to grow.
Summer temperatures can also influence costs in less obvious ways. When the demand for electricity is high across a region, wholesale power prices can increase. Utilities and grid operators must ensure enough generation is available to meet peak demand, and those costs can be reflected throughout the electric system.
Wholesale power costs and transmission charges are billed as a straight pass-through charge from our wholesale power supplier.
Operation and Maintenance
Closer to home, Lane-Scott Electric maintains the local electric distribution system — utility poles, power lines, transformers, substations and other essential equipment that safely delivers power to members. Maintaining this equipment is covered through the monthly customer charge. This is a flat monthly fee all members pay, regardless of how much electricity they use. This fixed fee ensures all members pay a fair share of the basic, operational costs required to keep the power grid reliable and ready to serve your home or business. Whether a member uses a little electricity or a lot, we must maintain infrastructure and have crews, equipment and resources available to provide electricity around the clock.
The good news is that simple steps to lower energy use can make a meaningful difference. Setting your thermostat a few degrees higher when you’re away, replacing dirty HVAC filters, using ceiling fans, sealing air leaks, and avoiding the use of major appliances during the hottest parts of the day can help reduce energy consumption and lower your bill. Spreading out the use of energy using equipment and appliances in separate 15-minute intervals will decrease the demand charge and reduce strain on the local grid during peak demand.
Lane-Scott Electric strives to provide safe, reliable and affordable electricity while being transparent about the factors that impact energy costs. We understand every dollar matters, and we are committed to making smart investments that keep the lights on and support the communities we serve.
Thank you for allowing Lane-Scott Electric Cooperative to serve you.
August is typically one of the warmest months of the year, and that means air conditioners across our community are working overtime to keep homes comfortable. During periods of extreme heat, many members may see an increase in their electric bills and wonder what factors contribute to the cost of electricity.