KEYSTONE HEIGHTS -- Beginning on January 9, members of Clay Electric Cooperative will see their cost of power for 1,000 kilowatt hours (kWh) of electricity increase to $109. Clay’s cost of power for November and December was $105.80. The $109 charge is still lower than Clay’s average cost for 1,000 kWh for 2012, which was $110.72.
Why was November and December’s cost of power lower than average? The major reason the cost of power was lower in November and December was the lower price of natural gas as a generation fuel during 2012. The cooperative lowered its cost of power for members in order to pass along the savings for those two months. The cooperative sets its rate to provide service at cost, but anticipates a small margin. Margins represent monies left over at the end of the year after expenses are paid.
“We want to provide service at cost, but that doesn’t mean zero margins,” explained Mark Maxwell, Clay Electric’s director of the Finance Department. “We need certain margins to obtain lower cost financing. These margins will eventually be returned to members in the form of Capital Credits while maintaining financial stability.”
Clay Electric returned $5.25 million in Capital Credits to entitled members last year, and this helped reduce members’ cost of power.
Despite the slight increase in the cost of power, Clay Electric remains among the lowest cooperatives in the state.