May 20, 2008 - Wholesale electric generators continue to see a rise in the cost of natural gas, which is a key component of the price that is placed on power purchased by electric utilities. The escalation in natural gas prices is causing the cost of purchased power to rise, affecting many utilities across Texas and the nation, including Bandera Electric Co-op (BEC).

BEC members should expect to see the purchased power cost increase by approximately 1¢ per kilowatt-hour (kWh) beginning in late June. What this means is for every 1,000 kWh a member uses, they should expect their electric bill to increase by $10.00. Another 1/2¢ increase is likely to occur in late October.

“The increase will recover costs charged by the Lower Colorado River Authority (LCRA), which is our primary wholesale provider,” BEC spokesman Stephen Williams explains. “At the time LCRA’s current rates were established last fall, the average price for natural gas was less than $8.00 per million Btu (mmBtu).  As of May 19, the average cost of natural gas over the next 12-months was above $11.50 per mmBtu.”

“Electric rates are made up of several components, including distribution, transmission and generation costs,” Williams said.  “The distribution portion incorporates the operational costs that BEC charges for delivering electricity across our lines to the member.  The purchased power cost generally reflects the wholesale generator’s cost for fuel, rail transportation, and other operational costs, that are required to produce the electricity.”

“Our distribution charge and availability charge are not changing,” Williams says.  “However, the purchased power cost component that reflects what the LCRA has to pay for fuel is expected to increase.”

Members whose billing cycle overlaps the period when the new rates will take effect will see a blended rate during the first billing cycle after the rate is adjusted and the full effect of the increased rate the following month. 

Any steps that members can take to reduce their energy usage will play an important role in helping to lower their bills year round. Members are encouraged to take advantage of BEC’s Budget Billing Program and to visit the Energy Tips section of our website, where you can find a number of energy saving tips and an online energy audit tool. BEC can provide an energy audit for those members who do not have access to the internet.

Members who stop by any of BEC’s offices should also ask for a free copy of You Have the Power! A Guide to Cost-Cutting Conservation Measures.  We will also be more than happy to mail the guide to you.  For more information about any of these programs and services, please contact BEC at 830-796-3741, or toll free, 1-866-226-3372.