Co-op News

Oklahoma’s electric cooperatives’ winter outlook

By Anna Politano January 2023

Affordability. Reliability. Approachability.

Welcome to 2023. Nearly two years ago, in February of 2021, Oklahoma was one of many states that experienced ongoing subfreezing temperatures with Winter Storm Uri. In this historic winter storm, Oklahoma had 12 consecutive days of below freezing temperatures with the lowest temperature at -22 F and wind chills as low as -36 F. Many lessons were learned from this cold spell. As Oklahoma’s electric cooperatives diligently prepare to serve their members during the cold months ahead, there are encouraging factors to consider as a new winter begins. We break them down for you below: 

Graphic showing cost breakdown for electricityAffordability 

Fuel costs and power generation comprise two-thirds of cooperative members’ electric bills. The other third includes costs related to distribution cooperative operations for delivery to homes and businesses such as poles, wires, meters and personnel. As not-for-profit utilities, electric co-ops only pass along rate increases when they have no other choice. Co-ops have no shareholders. As a result, consumers served by electric co-ops directly shoulder any increased costs. While electric bills increased last summer due to high natural gas prices, the Energy Information Administration reports natural gas prices are decreasing, which should alleviate cost pressures for winter bills. 

One factor that escalated the 2021 winter storm was the unprecedented lower temperatures that lasted for consecutive days, creating a scenario in which energy demand exceeded available supply. This situation caused utilities to spend more to secure extraordinarily expensive and scarce natural gas to keep the lights on. 

“While the risk of colder than normal temperatures and higher natural gas prices still exists, which could cause a return to summer prices, we are optimistic that conditions will stabilize more for this winter,” says Gary Roulet, CEO of Western Farmers Electric Cooperative, a generation and transmission electric cooperative based in Anadarko, Oklahoma. 

Reliability 

Most of Oklahoma is part of the Southwest Power Pool (SPP), a regional transmission organization that manages the grid in a 14-state footprint. SPP ensures reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices in the central U.S. 

In a recent winter outlook assessment, the North American Electricity Reliability Corp. (NERC) reported a large portion of the North American electric grid could face energy shortfalls in extreme weather conditions this winter. While the report pointed to areas within the United States that are more prone to reliability risks, it stated that “SPP’s planning reserves are adequate for the upcoming winter season.” 

With normal weather patterns this winter combined with improved natural gas prices, optimal wind energy output and better storage levels of dispatchable fuels (natural gas and coal), energy capacity should be appropriate, according to Roulet. 

Approachability 

The electric cooperative business model is member focused. Electric co-op employees and trustees live in the communities they serve, pay the same electric rates as fellow co-op members and work hard to ease the impact of rising costs on the membership. Through member-focused service, electric co-ops are approachable and accessible to help members find solutions. 

Co-ops encourage members to call and discuss payment assistance resources when needed. Some co-ops offer budget billing or levelized billing plans to help keep monthly electric bills manageable by averaging electricity use over a 12-month rolling period, avoiding large fluctuations in monthly bills. Most co-ops also offer free energy audits and provide energy efficiency resources to help members use energy wisely. The Low-Income Home Energy Assistance Program (LIHEAP), a federally funded program, provides financial assistance to help low-income households with home energy costs. In Oklahoma, LIHEAP is administered by the Oklahoma Human Services Department and the next round of applications begins on January 10, 2023. For more information about programs that could help with energy usage, contact your local electric co-op.

Category: Co-op News

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