CEO’s Message – April 2022
Understanding Your Bill
If you’ve purchased anything lately, you know that prices have risen. Consumers across the country are feeling the impact of rising costs of goods and services. Even though electric rates at Stearns Electric Association have been unchanged for the last four years, you probably noticed your electricity bill has risen compared to the same time as last year. This month, I want to provide some insight into these rising costs and help you better understand your electric bill.
By far, the largest expense to Stearns Electric is the cost of power. In 2021, 65.6% percent of all revenue ($40.67 million) was used to purchase electricity from our wholesale power provider, Great River Energy (GRE). This is similar to years past. However, several factors can impact the Cooperative’s wholesale electricity costs.
In January and February, we reached extremely low temperatures throughout the state, which impacted power generation. Not only did people need to use more energy to keep their homes heated properly, but also the demand for electricity exceeded the capacity of the transmission lines, causing transmission congestion. At the same time, natural gas prices spiked throughout the country, which led to an increase in power generation costs.
All of these factors led to an increase in wholesale power costs and ultimately led to Power Cost Adjustment (PCA) charges on your electric utility bill in March.
When the cost of electricity rises over GRE’s budgeted projections, Stearns Electric ends up paying GRE more for electricity. When this happens, Stearns Electric uses a PCA to pass on those increases to members.
In addition to the PCA, a couple of additional monthly charges on your electric bill are the Fixed Charge and Energy-Main Meter amount. These charges have not changed since 2018.
- Fixed Charge: recovers the basic cost of electric service, independent of how much electricity is used. It accounts for Stearns Electric’s investment in equipment, materials and labor to safely provide members with reliable electric service.
- Energy – Main Meter: a per KWh charge for the amount of energy your home or business uses in a given month.
Depending on your service address, members might see additional charges.
- Franchise Tax: these taxes, set by cities, are collected by the Co-op and provided directly back to the city. Taxes vary depending on your location.
- Operation Round Up: members enrolled in this program automatically round up their bills to the nearest dollar every month.
- EnergyWise Rate: members enrolled in an energy-savings program through the Cooperative receive a reduced rate or monthly bill credit.
At Stearns Electric, we are committed to providing you with reliable, affordable and environmentally responsible electric service. Please contact our office during regular business hours for any questions or concerns regarding your electric bill. Our member services department is available to go over potential energy-saving options with you, set up a payment plan or direct you to assistance if you qualify.
Robin C. Doege
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