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OREMC Rates Q & A

June 20th, 2022

OREMC has announced its second power cost adjustment since July 1, 2022 due to increasing power generation costs as a direct result of the continual rise in natural gas prices. The new wholesale power cost adjustment will be effective September 1 and add an additional $.017022 per kWh. The following explains the price you pay for power and how and why it changes from time to time.

What are the key components of OREMC’s rates?

The price you pay for residential power is broken down into to three main components:

  • Monthly basic facilities charge: this is a flat fee that covers the cost for maintaining our electric distribution system and service facilities so that when you flip the switch, electricity is available on demand.
  • Energy charge: the portion of your kWh rate to operate our distribution system and invest in system improvements that continually build system capacity, resiliency and reliability. These are charges we set based on operational needs.
  • Wholesale power cost: the per kWh cost of generating the power OREMC needs to buy to meet the electricity demands of all our consumer-members. Because OREMC does not generate its own power, this is a cost component we do not control.

How much is OREMC’s basic facilities charge?

Currently OREMC’s basic facilities charge is $35 a month.

Are OREMC rates the same all year long?

No, OREMC has summer rates and winter rates. OREMC’s current rates are:

                Summer rates are in effect from May 1 – September 30

                                   0 – 1,000 kWh                     8.92 cents per kWh

                                Over 1,000 kWh                  11.58 cents per kWh

                   Winter rates are in effect from October 1 – April 30

                                     All kWh                              8.92 cents per kWh

 Why the two-tier rate structure during the summer?

The overall demand for electricity is higher during the hot summer months. The two-tier structure was established to encourage energy conservation during peak demand times. A higher than usual demand for electricity during the summer months can result in higher energy bills year-around.

Why is a wholesale power cost adjustment necessary?

As mentioned above, OREMC does not generate its own power, we buy it. Like supply and demand of any product, the price of power can go up or down based on market prices. If there are significant cost increases OREMC adjusts for those by increasing the wholesale power cost. If the cost of power decreases significantly, OREMC adjusts the wholesale power cost down.

What is driving the current increase to the wholesale power cost?

As you know from filling your gas tank at the pump, the cost of fuel has increased significantly over the past few months. The unprecedented increase in the cost of natural gas—it has nearly tripled over the past year—is what is driving up power generation costs. As reported in the news, several factors are contributing to the increased natural gas prices: inflation, supply chain issues, workforce shortages and the war in Ukraine. Since OREMC is a consumer-member owned cooperative and doesn’t have stockholders, we don’t mark up these costs for a profit. The cost is simply passed through to members via the power cost adjustment.

How much will the power cost adjustment affect my OREMC bill?

The wholesale power cost adjustment that went into effect on July 1 was $.00781 per kWh. Based on 1,000 kWh per month, for example, your monthly OREMC bill increased by $7.81. The additional power cost adjustment effective September 1 is $.017022. Based on our example, this will add an additional $17.02 to your monthly bill.

Will it go back down?

Hard to say for sure, but hopefully yes. If and when natural gas prices go back down, OREMC will make the appropriate power cost adjustment decrease.

Have billing concerns or usage questions?

If you have questions or concerns about your OREMC bill, please contact OREMC Member Services at 800-262-5131. They can review your bill with you, explain your usage and discuss billing/payment options.

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