Heat is on | CraigDailyPress.com

Heat is on

Residents soon to feel increase in electricity costs

On the heels of rising gasoline prices and a 47 percent increase in natural gas bills is an estimated 15 percent increase in the cost of electricity.

Residents will feel the heat in coming days as their Yampa Valley Electric Association bills arrive.

The price increase is a pass-through charge, meaning that the association doesn’t make a profit, but passes on what Xcel Energy charges for electricity, said Jim Chappell, the association’s manager of consumer accounts.

The association, a cooperative owned by customers, purchases 96 percent of its electricity from Xcel and distributes it to consumers.

Yampa Valley Electric is not raising rates, but Xcel Energy is.

Xcel officials said they expected natural gas commodity prices to decrease by 14 percent in December but expected the average customer’s bill to go up 20 percent because of increased use of the fuel.

Although the price of natural gas is falling, the price to produce energy isn’t, Chappell said. Yampa Valley Electric Association customers are paying for that production of energy.

Shipments of coal from Wyoming’s Power River Basin have been curtailed as 110 miles of railroad are being reconstructed. That interruption is increasing dependence on natural gas-fired power plants, contributing to the high costs to produce electricity, Chappell said. That cost generally fluctuates monthly, but never to this degree, he said.

In January, Xcel charged the association 1.2 cents per kilowatt hour for energy production. That amount fell to 0.07 cents in February and hit a high of 1.8 cents per kilowatt hour in October. For December, the charge is 3 cents per kilowatt hour.

Bad timing

“That’s the highest it’s ever been,” Chappell said. “The Xcel fuel cost adjustment is skyrocketing, but that charge is directly related to the increased costs of producing energy with natural gas.”

Although the Xcel surcharge on each customer’s bill will more than double, all other fees will remain the same.

As soon as the association learned about the increase, it tried to alert some of its large account holders, Chappell said. Also, it addressed the possibility of an increase in November’s newsletter, he said.

Still, even with the warnings, Chappell said he expects to soon field calls from some irate consumers.

“We warned some of our large power customers, but we didn’t expect this dramatic of an increase,” Chappell said.

“It’s the worst possible timing with the holidays making longer billing cycles and with cold weather setting in so customers are using more electricity.”

‘We’re all right’

With an average annual bill that exceeds $200,000, the Moffat County School District is one of the association’s largest area customers.

School officials didn’t budget for a combined 57 percent increase in energy costs. But finance director Mike Brinks said he thinks funds the district has set aside will cover the rising energy costs.

Last year, the district spent $214,000 to heat eight buildings and $239,000 to keep the lights on, or $75,020 less than it budgeted.

Officials again budgeted $528,020 for natural gas and electricity for the school year.

“Even if the price goes up, we’re all right,” Brinks said.

Paying bills

Just as a homeowner would, the school district will cut costs in other places, if necessary, to pay the heating bills, Brinks said. The school, however, would prefer to spend money to educate students than for escalating energy bills, he said.

The city of Craig didn’t budget in 2006 for higher electricity costs either. But like the school district, city officials said they spent less this year than anticipated.

Chappell urges customers who have difficulty paying their electric bills to contact the association and work out payment plans. The association also offers budget billing, where a customer’s past 12 months of electric bills are averaged and billed at the same rate for 11 months.

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