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Kenergy explains higher January bills

Several factors pushed up average January 2017 bills about 60 percent or higher, as compared to the prior year.

Those factors were members’ higher usage, loss of the reserve fund credit, billing gap recovery and a small rate increase.

  • Weather extremes affect energy bills more than any other single factor. Higher usage due to colder temperatures accounted for about 30 percent of the year-over-year increase. According to regional National Weather Service data, the same billing period a year ago was much warmer. Therefore, members used 30 percent more electricity during the same billing period this year.

  • A large credit ended in October. The “reserve fund credit” paid 100 percent of the rate increase that was needed after the Sebree aluminum smelter left Big Rivers’ system on Feb. 1, 2014. Big Rivers is Kenergy’s wholesale energy supplier. Because of the smelter’s departure, Big Rivers was forced to apply for a rate increase to cover financial losses. When the reserve fund depleted in October, Kenergy members started to pay that cost for the first time. Losing that credit increased Kenergy bills about 20 percent.
  • Beginning in January, Kenergy started recovering a 21-day billing gap. Each month this year, the cooperative will add a couple of extra days to members’ usage and increase the customer charge to reflect those extra days. Kenergy estimates recovering the billing gap will increase bills about 6 percent. At the end of 2017, members’ payments will be up to date and gap payments will cease.
  • Finally, in 2016, the Kentucky Public Service Commission increased Kenergy’s residential rate by 3 percent.

Kenergy offers several services to help members with seasonal weather extremes and to understand their usage.

Here are answers to other questions members may have:

  • Kenergy’s residential “all-in” rate is 12.84 cents, which is in line with the national average of 12.75 cents per kilowatt hour.  “All-in” rates include everything but taxes.  Review this recent rate comparison chart from federal energy officials.
  • The cooperative’s new digital meters were tested to verify their accuracy prior to shipment. The Kentucky Public Service Commission (PSC) approved the manufacturer’s factory test. Then, after the meters reached Kenergy, the co-op tested them for accuracy. The meters averaged 99.999 percent accuracy. The PSC allows plus or minus 2 percent. Kenergy continues to perform random checks of meters installed throughout the system. The type of automated meter Kenergy installed is very common. There are more than 51 million automated meters in use nationwide. Kenergy was the last cooperative in Kentucky to install digital meters.