DEMCO CEO Email to Membership, June 2022

Tue, 06/07/2022

Greenwell Springs, Louisiana – DEMCO CEO & General Manager Randy Pierce emailed DEMCO members earlier today with information and preparedness tips for hurricane season, as well as the continuing high cost of wholesale power, which accounts for 65 to 70 percent of their DEMCO bill.

2022 Hurricane Season, June 1 – November 30
It's the beginning of hurricane season so once again, I encourage you to prepare in advance. Stock up and replenish supplies, canned goods and water, and visit RedStickReady for detailed information and tips.

NOAA predicts above-average Atlantic temperatures to set the stage for a busy season. You can read more at NOAA’s website: https://www.noaa.gov/news-release/noaa-predicts-above-normal-2022-atlantic-hurricane-season. There are many helpful resources at the National Hurricane Center website: https://www.nhc.noaa.gov/.   

DEMCO also participated in the June 1 WAFB hurricane special: The Fifth Season which you may enjoy. DEMCO is included in the feature, 10:00 – 13:45 mark.

Listed below are preparedness tips specific to power outages: 

  • Take a moment to review and make updates to your MyDEMCO account information, to include your cell number and notification settings.
  • Save the MyDEMCO outage reporting number to your mobile phone 1-844-MyDEMCO (1-844-693-3626). When you call in from the phone number associated with your account, the data received is uploaded into our outage map, which refreshes every 5 minutes.
  • Visit DEMCO.org and the Outage Map to familiarize yourself with its features.
  • Download the MyDEMCO mobile app.
  • Do a practice run of safe set-up and operation of a portable generator; for installation of a home generator switch, contact an electrician.
  • Connect with us on social media platforms.

We pray for an uneventful season, and we all know the drill: Hope for the best and prepare for the worst.

High Cost of Wholesale Power
About 65 to 70 percent of your DEMCO bill is the cost of wholesale electricity and the other 30 to 35 percent is the cost for DEMCO to distribute that electricity to your home or business.  

DEMCO purchases wholesale electricity from CLECO Power under a contract that lasts until March 31, 2024.  

Last summer, CLECO Power contacted DEMCO to inform us of “extraordinarily high bills for the next three months due to costs associated with closing the Dolet Hills Power Station.” In good faith I communicated this information to DEMCO membership – using our phone preamble message, in our co-op magazine, in your bill as an insert, and on the important message section and ad section of your monthly bill. I stated the ‘higher than normal cost was due to power generation decisions made by our wholesale supplier, CLECO Power’.  

I asked CLECO again about these high charges in January and was told, “Dolet Hills costs are extending longer than expected”. The initial three months turned into six months and as you know, the PCA remains unusually high.   

These extraordinarily high wholesale power charges have cost people living and working in DEMCO’s seven parish service area tens of millions of dollars over the past several months.

In the meantime, the price of natural gas, which CLECO Power uses to operate many of their generation plants, has skyrocketed over the past few months and driven wholesale power costs upward.

Unfortunately, any price decreases that would have resulted from the Dolet Hills plant closing costs going down have been offset by significant increases in fuel costs to produce electricity. Natural gas prices in April 2022 were more than double those in April 2021 and three times higher than April 2020.

Recently CLECO Power informed DEMCO that, “we do not expect to see this situation resolving in the near-term.  Natural gas prices are projected to remain high into next year. Until natural gas prices moderate, the billings will remain high.”

Because of higher natural gas prices anticipated throughout the summer, DEMCO members should budget for higher electricity costs in the coming months.

One way to manage electricity cost is to manage how much power you use. Remember, you only pay for what you use, so now is a good time to implement measures to improve the efficiency of your home or business.

As your local electric cooperative, DEMCO is a not-for-profit company – we do not markup or profit off the increased price of natural gas. We do not reap profits to pay shareholders. We exist to serve you, our co-op members.

So, what can you do to keep your bill as low as possible?

Energy use is measured in kilowatt-hours. 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.

Please visit the DEMCO website Energy Use and Your Bill; and also Energy.gov for tips, guides and advice.   

If you have resided at your existing address for twelve months, you may qualify to be placed in the levelized billing program. This program averages your previous 12 monthly bills and bills that amount on your current bill. This rolling average helps you anticipate your bill amount each month, which helps you manage your budget because you can anticipate a similar amount each month. To enroll or learn more, visit DEMCO.org/payment-options/levelized-billing.

DEMCO also offers a number of other types of bill payment assistance plans.

Remember, DEMCO has signed a new wholesale power provider contract that is pending review and approval by the Louisiana Public Service Commission, for adoption in April 2024 when our existing contract expires. Our new provider affords 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 co-op. I will continue to keep you apprised as we navigate our way through these challenging times.

DEMCO powers 114,420+ meters that serve over half a million people in a seven-parish service area of Southeast Louisiana: 
Ascension, East Baton Rouge, East Feliciana, Livingston, St. Helena, Tangipahoa, and West Feliciana.