Energy Cost Increase Will Affect Co-op Members May 1
Everyone is experiencing higher costs for just about everything these days, and your electric cooperative is no different. U.S. prices for energy commodities such as crude oil, natural gas, gasoline and diesel have increased significantly in recent months.
As a result of higher natural gas prices, ODEC (the not-for profit power generation cooperative that A&N Electric Cooperative owns along with 10 other cooperatives in Delaware, Maryland and Virgina) has instituted a rate increase to cover the higher generation costs resulting primarily from those natural gas price increases.
Beginning May 1, ODEC will increase its costs to all its 11 cooperatives.
Residential A&N Electric Cooperative members will see their Power Cost Adjustment credit reduced from $0.00509 per kilowatt-hour to $0.00292 per kWh. An average home using 1,000 kWh will experience an increase of $2.17 over the cost of electricity from Jan. 1, 2022 to April 30, 2022. This will affect members’ bills rendered after May 1.
It has been unusual in recent years to have any mid-year rate change by ODEC, but the higher costs we have incurred for natural gas used to generate electricity have necessitated this rate increase. Similar costs are being faced by other utilities in the mid-Atlantic and other regions of the country — this is not unique to A&N Electric Cooperative or to ODEC.
The high winter demand for natural gas coupled with cold temperatures, particularly in January, impacted the price of natural gas, and significant volatility on some days drove short-term prices even higher. During this time, ODEC maintained reliability of our generation assets. ODEC has a robust, board-directed hedging program to mitigate fuel and power cost volatility; however, significant load increases and volatility during cold winter days caused ODEC to incur additional costs.
Russia’s war against Ukraine and other global economic factors, including the expected increased export of U.S. gas as liquified natural gas to Europe and Asia, further exacerbate price increases and volatility.