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Preparing for Winter Costs

Chris Meyers
General Manager
Oklahoma Association of
Electric Cooperatives

The old adage “hope for the best, prepare for the worst” will serve consumer-members well this upcoming winter. Rising energy prices are expected to hit household budgets in the coming months, and your distribution electric cooperatives and generation and transmission cooperatives are hard at work to help keep your energy affordable, safe and reliable.

The U.S. Energy Information Administration (EIA) recently released its “Winter Fuels Outlook” report. This report forecasts, on average, heating costs for those who primarily use natural gas or electricity will be on the rise this winter compared to last year’s heating bills.

EIA expects the largest increase to occur in the Midwest, with an average natural gas cost to be 45% higher than last winter. Regional natural gas spot prices reached record-high levels following the February 2021 polar vortex. The new forecast of high prices follows changes to energy supply and demand patterns in response to the COVID-19 pandemic.

The question consumer-members must ask themselves is, “What can I do to prepare?”

There are inexpensive ways you can ready your home without making major lifestyle adjustments. The first step is to replace your HVAC or furnace filter, and continue to do so regularly, to help the system run more efficiently. Now would be a good time to get your system evaluated for a tune-up as well.

Covering windows with plastic to block drafts, or closing off vents in unused rooms, will also allow for your energy dollars to extend further. Another inexpensive preparation tool is a door pillow. A door pillow is a weighted pillow placed at the base of the door frame. This pillow helps to keep the cold air from creeping in and the warm air from escaping. 

As always, you can set your thermostat to the lowest temperature comfortable for your family. Try to keep the thermostat at a constant temperature. A one-degree increase can increase energy use by 3-5%. Consider using extra layers of clothing and blankets instead of space heaters to reduce overall cost. 

Another resource is the Low Income Home Energy Assistance Program (LIHEAP). This federal program keeps families warm through initiatives that help with energy costs. For a list of local intake agencies in each county, contact the U.S. Department of Health & Human Services.

Your local electric cooperative is ready to serve as your trusted energy adviser. I encourage you to keep your co-op as your first source for information and to reach out for advice in advance of the coming winter temperatures.

 

Cautions of Retail Choice

Gary Roulet
President
Oklahoma Association of
Electric Cooperatives

Each of us is a retail electric consumer unless your service is completely “off the grid” and you provide/generate all your own electricity. Retail simply means you buy electricity from an electricity provider, much like any other provider of services. Cooperative members are retail consumers of a distribution electric cooperative. Currently, Oklahoma is a “no retail choice” state.

“Retail choice” does not mean totally changing from one provider to another (commonly referred to as customer switching). If there were retail choice, your wire service provider would remain the same and only the actual electricity portion of your monthly bill would change. With retail choice you would most likely receive two bills—one for the wire delivery of electricity to your home or business and the other for the actual electricity. While individual rate classes might all be a little different, the electricity portion is normally about 50% of your bill.

Today, you receive one bill from a retail provider and that bill is for both the delivery and actual electricity combined. The price you pay is the same rate that everyone taking residential, commercial or other type of service pays and is available to everyone that desires electric service.

Under retail choice the price of electricity may be cheaper or higher, the conditions of that choice for the electricity portion of your bill might vary, and the door is open to get a lot of calls trying to sell you electricity. Different types of service might have implications: 1) Is your service firm (all the time)? 2) Is it interruptible (under certain conditions)? 3) Are there various prices during some hours each day or for different days of the week? 4) Is it subject to change with very little notice? 5) A host of other options. This also means you must read the fine print to determine the type of service you are going to receive.  

You service will likely have few interruptions under retail choice; however it may, from time to time, revert back to your original provider or the “default provider.” Default providers can then charge more than they normally do because you are now a part-time customer and not a full-time customer like you originally were. Your incumbent provider is now “standing-by” for your service when your new electricity provider can’t provide service and that might be at a premium cost.

Not a lot of states allow retail choice. Texas is the closest that does and each of us reads or hears about their service problems occasionally. Of the 14 states in the Southwest Power Pool (SPP), which includes Oklahoma, none of them allow for retail choice. To offer retail choice this option generally needs extra layers of regulation and administration, and this increases cost. 

Each of us as consumers needs to be cautious with these types of proposals—should they be allowed—that seem to be a way to save everyone money. What retail choice is more likely to do is save someone money at the expense of someone else. OKL Article End