Greenwell Springs, Louisiana – DEMCO CEO and General Manager Randy Pierce emailed DEMCO members today to share excerpts from an article by the National Rural Electric Cooperatives Association, that called attention to the U.S. Energy Information Administration summer forecast of residential electricity prices.
Dear Member,
According to the U.S. Energy Information Administration (EIA), the 2022 summer outlook forecasts an increase in electricity prices, and residents will pay on average, 14.4 cents per kilowatt-hour between June and August. In an article released by the National Rural Electric Cooperatives Association, a few excerpts are provided below:
Cooling your home will get more expensive this summer, according to the Energy Information Administration.
Reasons for the surge include higher natural gas prices over the past 18 months; continued retirements of coal-fired plants and constraints in coal deliveries; and growing demand for electricity as the industrial and commercial sectors return to pre-pandemic production activity.
“These changes in supply and demand led to gradually rising wholesale electricity prices in recent months as well as contributing to price spikes at certain times in response to temporary constraints in supplying power,” according to the EIA summer 2022 study, which was part of this month’s EIA Short-Term Energy Outlook.
Meanwhile, Henry Hub natural gas spot prices remain high. In April, the spot price averaged $6.59 per million British thermal units, compared to $4.90/MMBtu in March and $2.66 at the same time last year. EIA predicts even higher prices for the rest of 2022, with $8.59/MMBtu projected during the second half of the year.
Next year, the EIA expects Henry Hub spot prices to average $4.74/MMBtu due in part to higher production of natural gas.
Even in this time of worldwide unrest, inflation, supply chain issues, and the high cost of natural gas used by many power generation plants, you can affect your electricity bill. You only pay for what you use, so there is an opportunity for you to take some control over your bill by using less electricity.
Use less electricity to keep your bill as low as possible.
Energy use (electricity) is measured in kilowatt-hours (kWh). Each month, your bill is calculated by multiplying the rate per kilowatt-hour times the number of kilowatt-hours you use. So, the less kilowatt-hours of electricity you use, the lower your bill. Below are resources with information about how to lower your electricity bill.
For tips, guides and action steps, visit: https://demco.org/member-services/save-energy; and https://www.energy.gov/energysaver/energy-saver
Remember, DEMCO has signed new wholesale power contracts that are pending review and approval by the Louisiana Public Service Commission, for adoption in April 2024 when our existing contract expires. Our new provider will afford DEMCO access to a tremendous wholesale market, with a pool of generation resources, so we can purchase power supply with more short-term certainty and better long-term flexibility. This approach will help lower your bill and provide more stability in DEMCO bills from month to month and year to year.
A bright future lies ahead for our electric cooperative. I will continue to keep you apprised as we navigate our way through these challenging times.
Randy Pierce
CEO and General Manager
“At work, at home and in the community, we continue to see the impact of inflation and shortages,” says Pierce. “It’s hard to grasp – the effects right here at our local co-op are happening all over the world.”
DEMCO members’ cost of electricity per kilowatt hour in April 2020 was 9.6 cents, in April 2021, 10.1 cents; and in April 2022, 13.8 cents. These increases correlate with natural gas prices in April 2022, which were more than double those in April 2021, and triple those in 2020.
Pierce adds, “DEMCO is a not-for-profit electric cooperative. We do not markup or profit off the increased price of natural gas.”
Top Ten Energy Users In Your Home information via Visual Capitalist.com was also shared in the email.
“We want our members to have information that helps them take control of the things they can,” says David Latona, vice president of communications and governmental affairs. “Each member can decide where to cut back on kilowatt hours they use to save money on their bill.”
