Dixie Electric Co-op Currents Spring Supplement 2022

You can help make a difference!

Conserving energy is the first step in making a difference. Here are some low cost and no cost steps you can take: • Consider changing out your bulbs to LEDs. Turn lights off when not in use.

• Set your thermostat around 78° F in the summer and 68° F in the winter to reduce the amount of time your units run.

• Use ceiling fans to distribute air throughout the room.

• Use cold water when washing clothes and use the lowest heat setting necessary when drying clothes.

• Change your air filter each month to improve the efficiency of your HVAC system.

• Turn off power strips when electronics are not in use to avoid use of electricity in standby mode.

Did you know?

For just 4.8 cents out of every kWh you purchase, we are able to cover our cost of doing business, excluding power costs. This includes things like: constructing and maintaining our distribution system, right of way maintenance, billing, meter reading, equipment, vehicles, gasoline, materials, office equipment, computers, interest, taxes, depreciation and labor.

As a non-profit electric cooperative, we are committed to providing you with value for the dollars you spend. While we cannot control every cost involved in providing you with reliable electricity, we work hard to manage those that we have the most control over. We have held this cost steady for many years and will continue working to keep these costs as low as possible.

Co-opCurrents

Dixie Electric Cooperative Member Newsletter Special Spring Supplement 2022

Rising energy costs impact Dixie’s members Our country is in the midst of an energy crunch that impacts our entire economy. High crude oil prices have driven up the price of gasoline, and natural gas prices are rising at staggering rates.

Increasing fuel costs have forced our power supplier to implement a rate adjustment. As a result, our costs have increased in a manner that in turn requires us to pass this added cost along to our members.

Beginning with all bills received after May 10, 2022, our members will see an increase of $7.10 per 1,000 kWh. For more details regarding the increase, see the inside portion of this insert.

Rising Fuel Costs As we have shared with you in recent years, electric utilities rely upon fuels such as natural gas to generate the electricity we deliver to our members, which means we are also subject to the volatility of the cost of these fuels. These factors are not unique to your cooperative — high fuel costs affect nearly every electric utility in the U.S. PowerSouth Energy Cooperative, our power supplier, has done a good job by minimizing our exposure to the open market using long-term contracts and hedging on our natural gas purchases to stabilize costs. However, even with extensive planning, it is impossible to anticipate every change in today’s market.

With recent fluctuations in the cost of fuel sources, PowerSouth was unable to absorb these dramatic price increases and found it necessary to pass these costs on to us in the form of a power cost adjustment. As a result of this increase, our cost of fuel used to generate power accounts for approximately 1/3 of our total cost of service, with another 1/3 representing Dixie’s operational and fixed costs, and 1/3 representing PowerSouth’s operational and fixed costs.

Why is this happening?

U.S. natural gas prices recently surged to the highest level since 2008.

Russia’s war on Ukraine has caused a global energy crunch that is impacting countries around the world. In fact, natural gas prices have almost doubled this year alone. As Europe tries to wean itself off of Russian gas amid the war in Ukraine, demand for natural gas from other sources has increased. This in turn has cut U.S. inventories to almost 20 percent below typical levels. With temperatures forecasted to be hotter-than-normal this summer, the demand for gas to generate electricity for air conditioning is also expected to rise. In the past, when natural gas prices would rise, power suppliers would reduce natural gas generation and offset it with less expensive coal. However, most coal-fired plants were shut down due to environmental regulations several years ago, leaving power suppliers more dependent on natural gas. All of these factors impact natural gas demand and ultimately cause drastic increases in electricity generation costs.

What is being done to help?

PowerSouth will continue to use hedging and long-term contracts to offset some of the increased costs. They are also working to further diversify their fuel mix for generating electricity. However, with the current state of the energy market, this could be only the beginning.

We will continue to do what we can to manage the costs we can control. We encourage you as members to also do what you can by keeping your personal energy consumption to a minimum. Hopefully, by working together we can make a difference.

9100 Atlanta Highway | Montgomery, AL 36117

www.dixie.coop Comments or suggestions? Give us a call or e-mail us at pr@dixie.coop.

1.888.349.4332