Wholesale Power Cost Adjustment
The Wholesale Power Cost Adjustment (WPCA) may fluctuate by an increase or decrease in the cost associated with buying power wholesale, operational costs or sales volume. The Board of Trustees may increase or decrease the monthly adjustments as it deems necessary to maintain the financial stability and integrity of the Cooperative.
Due to the recent extreme heat and increased demand for electricity, coupled with rising prices for natural gas and other fuels, TCEC raised the WPCA from $7.00 per 1,000 kWh used to $28.00 per 1,000 kWh used as of October 1, 2022. This is a direct pass through of the cost associated with reliably serving you the electricity you need.
Understanding the Power Cost Adjustment
TCEC is a not-for-profit electric utility. We’re committed to delivering reliable, cost-effective power to our consumer-members.
TCEC purchases electricity each month from our power supplier, Seminole Electric Cooperative, at a wholesale cost to meet the needs of our members. The cost of wholesale power is a significant expense of providing electric service to the homes and businesses we locally serve.
What is the WPCA?
You may have noticed the Wholesale Power Cost Adjustment (WPCA) line item on your monthly bill. The WPCA provides a monthly adjustment dependent on any differences in the base cost of wholesale power.
If the kilowatt-hour cost to TCEC is lower than the base cost of power, the WPCA is applied as a credit on your bill. If the kilowatt-hour cost is higher than the base cost of power, the WPCA is applied as a charge. Having the WPCA benefits members by covering monthly power cost fluctuations without having to continually restructure electricity rates.
What impacts the WPCA?
The WPCA changes based on the cost of wholesale power, which fluctuates for a variety of reasons. During hot summer months when the demand for electricity is much higher, power may need to be purchased from more expensive sources at market price, which includes additional generation costs. Increased costs for fuels like natural gas also impact the price of wholesale power.
What is TCEC doing to help?
We know times are tough as the cost of gasoline, groceries and other essential needs are rising. TCEC is doing everything possible to keep internal costs down, but we can’t control rising fuel costs that are impacting the country.
TCEC uses a diverse mix of fuel sources for electricity, which helps reduce costs. Last year, TCEC’s electricity was generated from coal, natural gas, solar, hydro, and wind. This balanced fuel mix helps reduce dramatic fluctuations in generation costs.
We also offer a variety of programs and services to help members save on their energy bills and manage their account. Reach out to a Member Service Representative for payment assistance.
We’re here to help. Contact us if you have questions about your bill or ways to pay.
Natural Gas Prices & Member Rates
The price of natural gas has been increasing for the past twelve months. As gas prices continue to climb, the price for electricity is on the rise as well. Price projections for natural gas remain high throughout the rest of this year.
The WPCA credit will be reduced to zero for TCEC members starting on the July bills to cover the rising wholesale power costs. The fluctuation
in the WPCA is largely caused by changes in the cost of fuel for power generation. The co-ops cost of wholesale power is now more than 65 percent of the cooperative’s total expenses, so it is critical that the co-op makes sure that it recovers all of its wholesale power costs.
The Electric Cooperative Business Model: Stronger Together
Seminole Electric Cooperative, TCEC’s wholesale power provider, is committed to providing safe, affordable, reliable electricity to TCEC and eight other not-for-profit electric cooperatives in Florida. As a not-for-profit, Seminole provides electric services at cost. This means that when the price of fuel goes up, those costs are passed on to Seminole’s Members in the form of higher rates for electricity.
The benefit of being in a generation and transmission electric cooperative like Seminole is that TCEC member-consumers are not facing this situation alone. The costs of electric generation and transmission to all the Seminole Members are spread out among 1.9 million electric cooperative consumers and businesses in forty-two of Florida’s 67 counties.
Our structure also ensures that local leaders make the decisions that support our local communities. For example, TCEC’s CEO, and several board trustees represent TCEC on the Seminole Board of Trustees.
Our Current Energy Portfolio
In 2021, approximately 27% of Seminole’s wholesale electricity was generated by Seminole using natural gas as a fuel source. Seminole also purchased an additional 28% of its wholesale electricity from other utilities in the state, who largely use natural gas to generate electricity.
In addition to natural gas, Seminole also generates electricity from coal and renewable sources. This resource diversity helps spread risk when the price of one type of fuel increases.
Supply Chain Challenges are Delaying New Technologies and Renewable Energy
While the price of natural gas is largely driving the recent increases in the cost of electricity, other factors, including trouble finding materials and supplies, are also causing disruptions. You may have noticed long lead times and delays when ordering consumer items like washing machines, dryers, dishwashers, and other appliances. Electric cooperatives are also experiencing difficulties acquiring the materials that we need to provide you with electricity. For example, on the distribution side of our business, TCEC has noticed price increases and delivery delays on transformers, conductors, and poles, just to name a few.
Seminole is also seeing delivery delays and cost increases. Solar panel price increases, production delays, delivery difficulties, and international trade uncertainty are delaying or canceling many of the solar facilities that were planned to be installed this year.
Over the last nine months, the solar industry is reporting that 2022 solar installation forecasts have been cut in half due to these continued challenges.
Keeping the Lights On
Seminole and TCEC remain dedicated to providing our member-consumers with safe, affordable, reliable electricity. We don’t just work in the communities we serve, we also live here, and we are experiencing the same price increases for electricity that you are. Staff at TCEC and Seminole continue to work to minimize our other costs, and do what we can, to lessen the impact of these natural gas price increases on the price of electricity.