Currents-December 2022

DECEMBER 2022

Suwannee Valley

CURRENTS

INSIDE: THE PRICE OF POWER How natural gas prices impact your bill CHRISTMAS ON THE WATER Celebrate Christmas the Florida way with boat parades AROUND THE COMMUNITY Learning is fun for kids at SVEC’s Touch-a-Truck event

CEO’S MESSAGE

Suwannee Valley

CURRENTS December 2022

Michael S. McWaters Executive V.P./CEO

Suwannee Valley Currents is a monthly newsletter published by Suwannee Valley Electric Cooperative, © 2022. It is distributed without charge to all consumermembers of the cooperative.

A look under the hood

Transparency is important for any organization. In the public space, that transparency is built right in to our democratic system of government.

Even though corporations may ultimately answer to their shareholders, they need the trust of their customers to keep thriving.

For a cooperative, transparency is essential. It’s one of the defining principles that guide everything we do. As an electric company owned by the consumer-members we serve, keeping you up to date on the latest happenings inside our cooperative and the larger electric industry has always been a priority.

It’s why we publish the newsletter you’re reading now. And it’s why, around this time of year, we like to give you an update on how our wholesale power provider, Seminole Electric Cooperative, has done business over the last 12 months and what its outlook is for the year ahead.

But, like all things related to the economy, this year has been a little different. Just as our consumermembers have felt the squeeze on prices for everyday essentials like gasoline and groceries, Suwannee Valley Electric has felt the effects of inflation in our own way.

That’s why we’d like to take a closer look than usual at the forces influencing the cost of the power we buy from Seminole and the price that is ultimately passed on in your electric bill. In particular, we’ll be zooming in on the skyrocketing price of natural gas and why it has become such an important part of the energy mix, not just here at SVEC, but throughout the world.

2 | December 2022

Many of you have no doubt noticed the impact of these changes on your electric bill. Our hope is this article will help explain the larger trends that have led to the increased costs our consumer-members are facing as well as the steps both we and Seminole are taking to make sure the cost doesn’t get out of control.

We believe this information is important to you as a consumermember of this cooperative and it is our responsibility to provide you with it. I hope everyone will take some time to read the story to get a better understanding of the challenges the cooperative has faced over the last year and what we can expect in the months ahead.

Of course, this is also a time to come together to celebrate and we have so much to be thankful for at SVEC. Even with the economic challenges of the last year we have accomplished a great deal, not least of which was the launch of our new fiber-optics project, which will enhance the co-op’s smart grid capabilities and allow us to offer reliable, high-speed internet to all our consumer-members.

It’s been a remarkable year for our cooperative and I’m confident that more great things are in store for 2023. Until then, merry Christmas and happy New Year from our cooperative family to yours. 

WE BELONG TO THOSE WE SERVE Business Office: 800-447-4509 11340 100th St. Live Oak, FL 32060 Lobby Hours: 8 a.m.-4:30 p.m., Monday-Friday Drive-thru Kiosk Open 24 Hours 24/7 Power Outage Reporting 800-752-0025 svec-coop.com facebook.com/sveccoop @SVEC_COOP_FL Instagram.com/sveccoop SVEC is an equal opportunity provider and employer.

On the cover: Kids enjoyed big trucks, face painting and more at the third annual Touch-aTruck event this November. See more on Page 8.

Suwannee Valley Currents

Happy Holidays

SVEC’s office will be closed for the Christmas holiday Friday, Dec. 23, and Monday, Dec. 26. The office will also be closed on Monday, Jan. 2, for New Year’s. The 24-hour outage reporting system is always available, as is our drive-thru payment kiosk. We will have standby crews ready to restore power if needed.

Merry Christmas and happy New Year!

TREE GIVEAWAY SAT. JAN. 21 Suwannee Valley Currents

SVEC is giving away 125 tulip poplars on a first-come, first-served basis. Come by the co-op’s Live Oak office, 11340 100th St., starting at 9:30 a.m. on Saturday, Jan. 21, to pick up your free tree.

Tulip Poplars can get very large and must be planted at least 75 feet from any overhead power lines. There is a limit of one tree per member. You must provide proof of membership, such as an SVEC bill, to pick up a tree. Plant something new for the new year!

December 2022 | 3

The price of power How natural gas prices are impacting SVEC Seminole Electric Cooperative — SVEC’s wholesale power provider —works hard, even in the most difficult times, to provide affordable and reliable power to its nine member retail cooperatives. That mission has been especially challenging over the last year as Americans paid more for electricity.

According to the latest Short-Term Energy Outlook from the Energy Information Administration, the average price of residential electricity this year has been a little over 15 cents per kilowatt hour. That’s up about 10% from 2021. As much as SVEC strives to weather economic challenges without impacting our consumer-members’ wallets, we are not immune to the global trends driving this increase.

About 40% of your monthly bill goes toward fuel costs for Seminole Electric Cooperative. Seminole uses that fuel to generate electricity which SVEC then distributes to your home or business.

If the cost of that fuel goes up, the price we pay for electricity rises with it. In recent months natural gas, one 4 | December 2022

of the most important fuel sources for Seminole, has reached its highest price in over a decade.

“We saw a significant run-up in prices even before the war in Ukraine started and that just magnified it even more,” says Dan Buckner, Seminole’s director of natural gas supply and optimization. “When you get to those levels, any peak event, such as the really hot summer we experienced this year, pipeline outages and international events can quickly drive the price up.”

Supply and demand

What has been driving this surge in the price of natural gas? Our old friends supply and demand.

On the supply side, producers have been increasingly limited in the ways they can access and transport the supply of natural gas. Both state and federal regulations on fracking have made it difficult to tap new natural gas sources, while pipeline constraints made it harder to move the fuel providers do have to where it needs to go.

Even with those challenges, our

current supply might be adequate if not for surging demand outside of the U.S. Exporters are shipping record amounts of natural gas internationally, in the form of liquefied natural gas, for much higher prices than they can get domestically. Most of that supply has been heading to Europe, where the war in Ukraine led to widespread shortages.

On the other side of the equation, demand for natural gas in the U.S. is now higher than ever. Closures of coal-powered facilities have had an impact, but labor shortages around rail transport have an even bigger effect on the availability of coal. With coal increasingly not an option for energy providers, there has been increased reliance on natural gas to keep the turbines moving both at home and abroad.

Hedging bets

While many factors contributing to the rising cost of natural gas are beyond Seminole’s control, the cooperative takes steps to even out price spikes and lessen their impact on SVEC. One of those is known Suwannee Valley Currents

as “hedging,” a strategy designed to keep the price Seminole pays for fuel relatively stable even when there is volatility in the market.

To mitigate some of that volatility, Seminole hedges by using financial and physical tools to lock-in pricing or options to protect against potentially harmful future movements in the price of physical energy commodities.

Reducing volatility provides a more stable price that allows the cooperative to budget more effectively.

“With an unhedged position, the price would be subject to daily market volatility which hit an all-time high in 2022” says Buckner. “By layering in hedges over time, you can lock in pricing and cut down on volatility.

Generally, we try to hedge about 50% of our supply.

That way, we have at least half of our gas hedged at a stable price.”

Seminole has also made investments in physical natural gas storage services that provide some cost flexibility for SVEC and other member cooperatives. By investing in natural gas when prices are lower, Seminole can store this supply to utilize during leaner times. That means when short-term prices are high, Seminole has the option to draw on those reserves to moderate costs passed on to member cooperatives and, ultimately, to you.

Seminole has also built up a diverse portfolio of energy resources. By investing in alternatives like coal, solar and other sources, Seminole member cooperatives have additional generation options to lean on when natural gas prices rise.

Hitting home

So how does this impact you, our consumer-member?

SVEC utilizes the Wholesale Power Cost Adjustment (WPCA) to adjust the amount charged to members when the cost of fuel used to generate electricity, and hence the price of the power we purchase from Seminole, rise and fall. When the cost goes up, the WPCA can become a charge on the member’s bill.

When the cost goes down the WPCA can be a credit.

From 2014 to 2021, SVEC returned more than $35 million in credits to its members through the WPCA. Unfortunately, because of the rapid increase in the cost of natural gas, SVEC has been forced to adjust the WPCA this year from a credit to a charge on members’ bills.

This adjustment wasn’t made lightly. We know that this added cost may put an extra degree of strain on some households, especially with the inflation we are experiencing throughout the economy.

As a not-for-profit cooperative, we always work to provide reliable electric service at an affordable price.

So, please rest assured that as soon as market forces and the price of natural gas allow, we will readjust the WPCA accordingly. The price of natural gas dropped somewhat in October and November, in what we hope will become a continuing trend. 

Suwannee Valley Currents

The price of natural gas is always volatile but has risen significantly in recent months.

Hedging helps Seminole lock in a more stable price.

U.S. LNG Exports (billion cubic feet) 4,000

3,000

2,000

1,000

0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

While natural gas production in the U.S. has been relatively steady, exports of liquid natural gas have skyrocketed in recent years, draining supply. Seminole estimates that about 14% of the available natural gas supply is being sent to Europe as LNG exports.

U.S. Electricity Genera0on by Fuel Source (thousand MWh) 2,000,000

NATURAL GAS

1,650,000

1,300,000

COAL

950,000

600,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

With coal declining as a fuel source for electricity generation, reliance on natural gas has increased and created a more competitive market.

December 2022 | 5

Peanut butter stars These classic holiday cookies freeze well, so make plenty to enjoy throughout the season.

Ingredients 1/2 cup 1/2 cup 3/4 cup 1/2 cup 1 teaspoon 1/8 teaspoon 1 2 tablespoons 1 teaspoon 1 3/4 cups

shortening peanut butter granulated sugar (divided) packed brown sugar baking powder baking soda egg milk vanilla all-purpose flour Chocolate Kisses or stars

Directions Preheat the oven to 350 F.

Shape the dough into 1-inch balls. Roll the balls in the remaining 1/4 cup granulated sugar and place the 2 inches apart on an ungreased cookie sheet.

Bake for 10-12 minutes or until the edges are firm and bottoms are lightly browned. Immediately press a chocolate star or Kiss into the center of each cookie. Transfer to a wire rack and let cool. Store in airtight containers. Makes 54 cookies.

bright ideas When you save energy, you save money. Check back here each month for new ways to make your home or business more energy efficient.

6 | December 2022

©Adobe Stock

In a large mixing bowl, beat the shortening and peanut butter with an electric mixer on medium-high speed for 30 seconds. Add 1/2 cup of the granulated sugar, along with the brown sugar, baking powder and baking soda. Beat until combined, scraping the sides of the bowl occasionally. Beat in the egg, milk and vanilla until combined. Beat in as much of the flour as you can with the mixer. Stir in any remaining flour.

Air ducts are one of the most important systems in your home, carrying the air from your home’s furnace and central air conditioner to each room. Ducts that aren’t correctly sized, sealed or insulated can add hundreds of dollars to your heating and cooling bills each year.

Fortunately, insulating and sealing ducts that are located in unconditioned spaces is typically very cost-effective. Be sure to hire a qualified professional to make any changes and repairs so they can test the duct sealing for proper

airflow and fire safety. If you’re installing a new duct system, talk to your contractor about options for locating ducts in spaces that are already conditioned.

To learn more about how to save energy, click on the “Energy Efficiency” tab on the SVEC website, svec-coop.com. facebook.com/sveccoop @SVEC_COOP_FL @sveccoop

Suwannee Valley Currents

PHOTO BY HOWIE GRAPEK

Christmas on the water

Hol ida para y boat de Flor s in ida

By Amy Wimmer Schwarb, Visit Florida

Dawn Marie Capone and her boy- riverfront communities host opportunifriend live in Boston, where the holi- ties for local boaters to bring the holiday season brings a chill to the air day spirit to the water. and ice and snow to the streets and sidewalks. But for his 50th birthday, “Boats of all shapes and sizes tend she wanted to introduce him to a dif- to participate,” says Gary Guertin, ferent wintertime scene of Christmas past chairman of the Martin County — boat parades in Florida, a tradition Convention and Visitors Bureau that Capone considers a distinct part and producer of “Talkin’ Tourism,” a weekly radio show. “The best use all of Florida culture. things that assault the senses from a “It’s just so different,” says Capone, visual and sound standpoint. It’s just who grew up in Poughkeepsie, New as much about the boat community York, but lived in Indian Shores and as people on shore.”

Melbourne, among other Florida Gardner, who lives locales, for a few years. “Christmas Rusty in Florida doesn’t look like Christmas in Jacksonville and founded everywhere else. That’s why it’s floridabywater.com, says he tries special.” to attend a couple of boat parades each year. He cites a few favorites, During Florida’s holiday boat parade including the Carabelle Holiday on season, the same vessels that troll the Harbor and Boat Parade of Lights, the Atlantic, the Gulf and all points in as well as the Holiday Regatta of between take on blinking lights, ani- Lights in St. Augustine. mated characters and other holiday decorations for December sojourns “You’ve got the historic city with the that please thousands of fans watch- Bridge of Lions in the background,” ing from the banks. Dozens of the Gardner says. “And St. Augustine has state’s oceanfront, Gulf-front or a personality all its own.”

Suwannee Valley Currents

One of the biggest of Florida’s holiday boat parades is the Seminole Hard Rock Winterfest Boat Parade. Called the “greatest show on H2O.” The 51-year-old parade has an annual theme and a history of big-name grand marshals such as Shaquille O’Neal.

“I’m pretty confident in saying they have the biggest and probably one of the best boat parades in the country,” says John Kazaliauskas, founder of boatflorida.com and a frequent spectator or participant in boat parades around the state. “In general, the ones I’ve participated in have had something for everybody, so regardless of your age or your culture or your background, it seems to be that everybody has a good time one way or another.”

And frankly, boaters who decorate their boats for the parades aren’t just trying to entertain onlookers, Kazaliauskas adds. They’re also looking for a boating fix. “It’s a good excuse to go boating in the winter and celebrate the holidays,” he says. December 2022 | 7

TOUCH A TRUCK Kids learn while having fun at the third annual event Last month’s Touch-a-Truck event hosted by SVEC was a huge success, giving kids from across the Suwannee Valley a chance to sit behind the wheel of a variety of specialized vehicles and meet the professionals who operate them on a regular basis.

The Nov. 12 event featured patrol cars, a crane, helicopter, Humvee, tow truck, concrete mixing truck, school bus and firetrucks, along with a bucket truck and digger derrick from SVEC. When kids weren’t exploring the vehicles on display, they enjoyed face painting, a visit from Smokey Bear, balloon animals, cornhole games, bounce houses, a giant game of Connect Four and airplane barrel carts rides.

All proceeds from food and drink sales went to United Way of Suwannee Valley. Thank you to all of our sponsors and to everyone who came out to join in the fun.  8 | December 2022

Suwannee Valley Currents