AUGUST 2022
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Five tips for better indoor air quality
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Save the date for KEC’s Annual Meeting
A supplement to the Oklahoma Living
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Lig ght Post
the
ceo’s report
Renewables Report
PUBLISHED FOR MEMBERS OF KIAMICHI ELECTRIC COOPERATIVE
BY BRETT ORME
C H I E F E X E C U T I V E O F F I CER
Preparing for the Future I would like to update KEC members on some substantial developments in a few areas. I am sure this will not come as a surprise to most of you, but KEC’s costs have increased significantly. Similar to the prices we are all paying for fuel and groceries, as well as most goods, the cost of electricity is not immune and is being heavily impacted. For instance, the cost of meters has gone up 15%, vehicles and equipment are up around 25%, poles are up 36% and transformers are up over 50%. Lead times are also becoming very extended from several months to even years. We are continuing to stay on top of this issue. KEC RATES
COST OF PURCHASED POWER
Historically, approximately 60% of KEC’s total cost of service has been the cost of purchased power. This cost is highly dependent upon market prices for fuel. Currently, low natural gas supply and unseasonably elevated temperatures have created the perfect storm for supply and demand issues that are driving up the cost of power. The cost of purchased power has increased approximately 30%. The majority of KEC’s power comes from a regional power market of the Southwest Power Pool (SPP), which covers all or parts of 14 states in the central U.S. — the same market from which most electric companies, including PSO, OG&E and most electric co-ops, purchase their power — and SPP uses the most efficient generation first. KEC’s rates to members do cover a portion of these power costs but any fluctuations are seen in the PCA or power cost adjustment.
“Similar to the prices we are all paying for fuel and groceries, as well as most goods, the cost of electricity is not immune, and is being heavily impacted.”
KEC recently conducted a costof-service study completed by an independent third-party consultant to evaluate if our current rate structure is covering the associated costs. Since your cooperative is a not-for-profit entity, we are only trying to break even RELIABILITY with a small margin that is required You may have seen in the news by our lenders.These margins are lately discussions concerning rolling returned to you, the members, on a blackouts in a large portion of the U.S. scheduled rotation in the future — Per N.E.R.C 2022 Reliability Study — BRETT ORME referred to as capital credits. (www.nerc.com), SPP’s footprint is The cost-of-service study indin an elevated status. If there are no icated a deficiency in our current rate unplanned or forced outages on power plants and the weather is as structure. As a result, we must increase the service availability charge. Beginning in October, this charge will increase by $3 per month, predicted, we should be okay. If unforeseen circumstances arise there bringing it to $33. In addition, another $3 will be added to the service will be a possibility of rolling blackouts to protect the grid integrity. availability charge in mid-2023. As we previously made you aware, an There is a multi-stage process of notifications, and we will keep you additional $3 per 1,000 kWh charge was added in January, 2022. This updated as we know more. Please know that Kiamichi Electric is involved and doing what we charge will remain in effect but will be periodically re-evaluated and can to help mitigate these negative impacts as best we can. removed as the financials stabilize. Please stay safe this summer, and thank you for understanding.
