CEC may not need to raise July rates

Published 11:59 pm Wednesday, January 7, 2009

Covington Electric Cooperative, Inc. (CEC) has announced it does not plan to implement the last of its three rate adjustments due to projected decreases in fuel costs.

Customers were reminded in a recent letter that the second rate adjustment of $7 per 1,000-kilowatt hours will be seen on their January bill. However, it is expected to be the last increase for CEC customers this year if fuel costs remain steady.

In August, CEC experienced a wholesale power cost increase of approximately 30 percent during the summer. CEC’s wholesale power provider, PowerSouth Energy Cooperative, initially chose to implement the three-phase increase over a 12-month period with increases in August, January 2009 and July 2009. However, it appears the July 2009 increase will no longer be needed.

“As PowerSouth continued to elevate the unexpected increase in fuel and purchased power costs, they were able to reduce the amount they would need to recover in 2009,” the letter stated.

Last summer’s increase in wholesale power costs was a result of high costs for coal and natural gas. Additionally, PowerSouth experienced a sudden escalation in coal prices because two of its primary coal suppliers did not deliver coal in the quantity previously contracted, which meant they had to pay a higher price from other suppliers to meet customers’ demand for power.

“As stated in the member letter, CEC will continue to manage costs and operate as efficiently as possible,” said Patty Singleton-Seay, CEC public relations manager. “Although the letter references a more favorable outlook on wholesale power costs in the short term, it is still important to keep in mind that energy costs will continue to rise in the future, and our membership should be conscientious of their energy use.

“CEC is committed to helping its members conserve energy by providing free home energy audits and free energy savings information,” she said.