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SECO Energy continues to deal with supply chain constraints due to the pandemic aftermath. Utilities across the state and the nation are experiencing shortages of raw materials, labor shortages, shipping delays and increased demand for utility products. We are challenged to procure transformers, PVC pipe, meter boxes and any equipment that relies on a microchip. This shift changes our business model to operating around the available materials. These constraints also result in increased cost of inventory and price escalation due to runaway inflation - which is at a 40-year high. In May, the price of natural gas hit a decade high $9 per million BTUs (British thermal units) and this significantly affects the cost of power SECO delivers to you from our wholesale provider, Seminole Electric Cooperative. Given the domestic and global events causing these market trends to continue, SECO must prepare to meet our business targets and member requests in an environment today that is extremely challenging. We anticipate the continuation of cost increases and supply chain interruptions. Ultimately, these factors will result in our members paying more for their energy needs – just as we at SECO find ourselves paying more for the materials we buy to construct new services and maintain existing infrastructure. Roughly 70 cents of every dollar SECO spends is to purchase power from Seminole. Members who read SECO News regularly and review their electric bill each month have seen a line item referred to as the PCA – or Power Cost Adjustment. This
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calculation allows SECO to adjust for the rise or fall of fuel costs in real time without formally adjusting the actual rate. This is a common utility practice that prevents the over or under collection of funds from our members. The PCA factor was changed in April bringing our cost per thousand kilowatt hours from $121.00 to $128.05. Unfortunately, projections from Seminole require us to make yet another adjustment to the PCA - sooner rather than later. The fuel cost adjustment was approved by the Board and takes effect on July 1 with an increase to $137.60 per thousand kilowatt hours consumed at the residential level. Know that utilities across the state and the nation for that matter are all in the same boat and are making fuel cost adjustments and raising rates. Notwithstanding all of this, SECO will strive, as we always do, to minimize such impact on our members by keeping our rates as affordable as possible and making sure our rates remain competitive locally, regionally and nationally. In a June report from the Energy Information Administration (EIA), it forecasts the U.S. residential electricity price will average 14.6 cents/kWh between June and August 2022. SECO’s residential cost per kWh remains well below that and we’re hopeful we can hold that line through the remainder of the summer when members consume the most energy.
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