Why has my electric bill increased?? I haven’t touched my thermostat!!

If this is your recent reaction when opening your electric bill, you are not alone. At Victory Electric we, too, are paying higher electric bills this summer. As your fellow members of Victory Electric when electricity prices rise, our bills are impacted in the same way.

We know having others FEEL your pain doesn’t take AWAY your pain. And while we can’t take away the pain of your higher bill or ours, we can explain the reason behind them.

It’s been a scorcher.
You’ve no doubt recognized this summer has been much hotter than last summer. Last summer, Victory Electric territory experienced 2 days above 100 in July, in July of this summer we had 14 days above 100 degrees and only 3 below 90.

During extreme temperatures, whether bitterly cold or scorching hot, we rely more on our heating and cooling units to stay comfortable, and that consumes more electricity. Specifically, when outside temperatures become higher than 100 degrees or there is more than a 20-degree difference between the inside and outside temps, air conditioners consume considerably more energy.

Record high demand causes increased prices.
Electric bills, yours and ours, are broken into cost sectors, one of which is the variable cost for fuel and purchased power.  The costs for fuels, such as natural gas, which are needed to operate power plants fluctuate from day to day.  The cost of electricity purchased from the Southwest Power Pool wholesale energy market also fluctuates hour by hour due to several factors. Each month, electric utilities recover the fluctuating costs of fuel and purchased power—with a pass-through cost, or credit, on consumers’ electric bills in the form of an Energy Cost Adjustment (ECA). Electric cooperatives do not mark up or make a profit on the costs of fuel and energy purchased from the market. The ECA is a mechanism to recover these fluctuating costs to remain financially whole.

Fuels such as natural gas are a commodity, and like all commodities, fuel prices are influenced by supply and demand. Several domestic and global factors have contributed to natural gas price increases in recent months. The war in Ukraine, increased exports of liquified natural gas to Europe, and increased demand for natural gas used to run power plants are all factors that have contributed to the price of natural gas nearly doubling since March. Electricity is also commodity that is affected by supply and demand economics. This summer, extremely hot weather conditions have caused a greater demand for electricity. Increased demand on the electric grid requires less efficient power plants to operate along with the more efficient baseload plants that normally serve load to meet consumer needs. The combination of higher fuel prices and decreased power generation efficiency leads to higher prices for electricity.   

Victory Electric receives wholesale energy from Sunflower Electric Power Corporation, which is a member of the Southwest Power Pool (SPP). The SPP oversees, manages, and balances the dispatch of energy based on reliability and economics across a 14-state region. On July 19, SPP experienced a record high demand for energy at 53,243 MW, which required running more expensive generators to serve the load.

Fuel diversity is important.
In addition to higher costs for natural gas, coal supply interruptions have constrained Sunflower’s coal-based unit at Holcomb Station. The Holcomb unit ordinarily generates energy at a lower cost than natural gas. However, due to coal shipping interruptions caused by railroad staffing issues, Sunflower curtailed energy production from the unit and pursued replacement energy products that were expensive compared energy produced at Holcomb Station.

The Dog Days of summer are notorious for being hot and still. Though Kansas has its windy days, those days are less common during July and August. Just when we need wind energy the most, we usually have it the least. Such was the case this summer when wind production in July was down 15.5% from June and 33% from April.  Sunflower recently added 20 MW of solar generation at its Johnson Corner Solar Project.  Stable-priced solar energy helps moderate electricity prices during the sunniest and hottest parts of the summer when electricity demand is at its highest.  Sunflower is pursuing additional solar energy projects to enhance this impact on summer energy prices.

We’re here for you.
We can’t stop Mother Nature from doing what she does, and we can’t change the principle of supply and demand. We can assure you we are always looking for ways to help our members, who are also our neighbors. Please give Victory Electric a call or visit https://www.victoryelectric.net/energy-resources for energy efficiency saving tips.