By Tom Sobeck, President & CEO
It has been fun writing this column for the past year, as there has been considerable positive activity at your cooperative. We’ve completed our new headquarters building and created a new fiber division, PIE&G Connect, just to name a couple. These “good news” events are always easy to talk about, but this month’s column provides one of those life lessons we all experience. Just when all seems right with the world, something usually comes along to remind us that it’s not always “good news” that we get to talk about. Today that “something” is the energy supply rate on your electric bill. This rate is based on our cost to purchase the electricity that we sell to you. Over the past several years, six of the last seven, you may have noticed a negative billing component on your electric bill that reduced the amount you paid for electricity. It’s called the Power Supply Cost Recovery (PSCR) Factor and is calculated based on our expected annual energy costs from our supplier, Wolverine Power Cooperative.
Wolverine has done an outstanding job over the past several years keeping our energy cost low, and as a result, we’ve been able to keep the PSCR Factor negative. Unfortunately, that is not the case for 2022, as our PSCR Factor will increase from the current negative $0.00439/kWh to a positive $0.00762/kWh. That is an increase of 1.201 cents per kilowatt-hour and it will become effective Feb. 1, 2022. I’d like to say that the increase comes as a surprise, but it really doesn’t. Nationally, electricity costs are experiencing pressure caused by several factors, and we are not any different. The demand for cleaner energy has led to a greater reliance on natural gas and a move away from coal as a fuel source for electric generation. This means that, when there is an increase in the cost of natural gas, the cost of electricity goes up as well. As our industry shifts to more generation from natural gas and other cleaner fuel sources, the price of electricity will continue to be impacted. Please don’t mistake that for a political statement; it is just a matter of economics. Unfortunately, energy costs are entering a more volatile period, which means it will be harder to predict long-term costs, and further increases in the cost of producing energy are to be expected.
Wolverine takes its mission as seriously as we do here at PIE&G. To that end, we will continue to work together on ways to make your energy more affordable and develop programs to help you reduce your energy consumption and costs. Look for more energy efficiency programs sponsored by PIE&G soon.
Another year has flown by, and this is my last column before the holidays. On that note, I wish you all a Merry Christmas and a safe, healthy, and prosperous new year!