New Look - Same Rate

All News

Manager's Column

Authored by: Amber Overfelt

On your November 1st power bill you will notice a new line on your bill labeled Service Availability Charge.  It will reflect the same rate that has been in place since April 1, 2019.  The Service Availability Charge will be in the Current Bill Information section in the middle of the page on the right-hand side.  Since inception Howard Electric Cooperative (HEC), just like the majority of utilities, has had a service availability charge.  Every member of the cooperative pays a Service Availability Charge based on their rate schedule.  In the past, this charge has been included in the KWH Charge line.

It is my hope that by separating each of the three components on their own line, the bills will be simpler to review and understand.  The top line will be the Service Availability Charge, the second line will be the KWH Charge, and the third line will be the Demand Charge.  If you do not have any KWH usage for the month than the KWH Charge line will not appear on your bill, this also applies to the Demand Charge line.

The Service Availability Charge line of your bill will be the same each month, this is a set charge.  The KWH Charge and Demand Charge lines on your bill, you have control over.  With this change, the KWH Charge line will include only the charge the KWH’s you used during the billing period.  To figure your KWH rate you can simply take the KWH Charge amount divided by the Usage KWH listed above.  The Demand Charge line shows your highest KW demand hour during the billing period.  To figure you Demand Charge you can take the dollar amount divided by the KW stated next to the Demand Charge.  The charge per KWH and KW will remain the same each month.

Let’s talk a little about the Demand Charge.  First, what is demand?  Demand is how much power you need at one time.  Put simply, KWHs are converted to KW.  The one hour during the billing period in which you use the highest amount of KWHs is the hour your KW demand charge is based on.  For all non-commercial members this KW demand is only tracked during the hours of 6 to 8 a.m. and 4 to 8 p.m.  This allows residential members, when possible, to shift large amounts of KWHs usage outside of these hours and save money on their demand charge.

We are in football season so one way I think of demand is by thinking of Arrowhead Stadium.  It is built to hold over 76,000 Chiefs fans; however, that only occurs a few times a year.  The rest of the year you can find the stadium empty or only partially filled by another event.  Arrowhead Stadium is built to accommodate the peak demand of a home playoff game for the Kansas City Chiefs.

Just like building that huge stadium, there is a cost associated with having the needed amount of generation available for the hottest and coldest day of the year.  HEC through Associated Electric Cooperative Inc. has a diverse portfolio of generation including coal, natural gas, wind, and hydro.  To ensure reliable power to each member there has to be enough generation to cover the electric demand of our members at any one specific time, even though it might not be needed every day.

This is why HEC charges a Demand Charge.  HEC is charged a demand charge from our power supplier based on the demand set by our members.  In the past HEC did not have the meter technology in place to track residential demand.  The last meter conversion done at your cooperative in 2015 gave us the ability to record residential demand and bill all our members their fair share.  Watch your Rural Missouri in future months for more information on demand.