Power Cost Adjustment change 6-1-22

If you’ve filled up your car or paid a home heating bill in the last six months (all of us have!), you’re no stranger to rapidly escalating energy costs. Natural gas, which is increasingly relied upon to generate electricity, has seen costs almost double in the past year. Inevitably, this has an impact on your electric bill. Consequently, you will see a power cost adjustment (PCA) increase starting with your June bill. We anticipate higher power costs through the end of 2022 and possibly into 2023. Please review additional information in the FAQ, below:

Frequently asked questions:

  1. My bill has increased. Why?

WH purchases power from two Wholesale Power Suppliers(Great River Energy and Basin Electric Power Cooperative) as well as from sources from within the Midcontinent Independent System Operator (MISO) and distributes that power to members. The cost to purchase power has increased significantly within the MISO market in the past few months, driven largely by the rising cost of natural gas. Natural gas prices have increased due to greater electricity demand and higher gas exports to Europe and elsewhere, driven in part by the Russia-Ukraine war.

  1. What part of the bill is increasing?

The Power Cost Adjustment (PCA) portion of your bill is increasing. This portion of the bill is built to adjust to fluctuating power supply costs. It regularly changes during the year, and the typical summer PCA is higher than the winter PCA.

  1. How long will higher prices last?

WH anticipates the PCA will be higher at least through the end of 2022 and may extend well into 2023. The length will depend almost entirely on the duration of elevated energy market prices, which in turn are driven largely by natural gas.

  1. What is WH’s plan to mitigate these increases?

WH is taking several steps to mitigate these increases. First, we are leveraging several million dollars in reserves, which have been built up in better economic times, to reduce bill impacts to our members. Second, we are pushing off several planned investments into 2023. Third, we are actively seeking power supply resource options that can reduce volatility and increase predictability over time.

That said, as a member owned not-for-profit organization, it’s important to remember that WH must collect enough through rates to pay the cost of wholesale power and distribution. Since WH is not an investor-owned utility,we do not have shareholders nor are we managing to investor expectations.

  1. What can WH do to help me?
    1. WH has many programs to help members save on energy costs:
      1. Consider participating in one of our Energy Saving programs and rebates
        1. Rebates available
        2. These programs provide a discount on electricity in exchange for allowing WH to control the appliance during times of peak demand.
      2. Consider a virtual or in-person energy assessment
        1. Visit energywisemn.myenergyxpert.com to conduct a free virtual energy assessment in your home.
        2. Call (763) 477-3000 to speak to a Member Service representative who can explain additional ways to reduce energy consumption.
      3. Consider enrolling in MyMeter
        1. WH members have access to a tool called MyMeter at mymeter.whe.org. This tool displays your home’s energy usage by day and compares it to the weather and previous months. It helps explain when energy is being used the most and empower members to make changes.

  1. What can I do to reduce my bill?
    1. Members may choose to participate in the programs listed above or consider some of the following activities:
      1. Increase the temperature in your home by two degrees to use less air conditioning.
      2. Close the shades strategically during the brightest parts of the day and on the south-facing windows to buffer some of the heat from the sun.
      3. Open windows at night to allow cool air inside.
      4. Change your light bulbs to LEDs.

  1. Why did I get a Capital Credit refund in April if my bill was going to increase in June?
    1. The Capital Credit check members received in April was a result of  margins being more favorable than budget in 2021. The amount  was determined prior to the latest spike in power costs. If at the end of 2022, margins are more favorable than budget, those will also be allocated back to the membership for a future Capital Credit payment.