Straight Talk about Energy Costs

You may be wondering about your electric bill and the cost of electricity this winter. We want to make sure that our customer-members have the facts and some helpful information on how to keep their home energy costs down.

The Cost of Energy

SMECO’s Standard Offer Service (SOS) rate for energy is made up of an Energy Charge and a Power Cost Adjustment. The total is the SOS rate customer-members pay on their monthly bill. The SOS rate reflects the price that SMECO pays on the wholesale market. There is no mark-up. SMECO makes no profit on the SOS rate.

The chart on Monthly Energy Costs (below) shows the SOS rate for the past winter heating season. The lowest cost was this month, February 2009, and the highest was in October. The chart shows how much you would have paid for energy if you used 1,000 or 1,800 kilowatt-hours (kWh) each month.

Monthly Energy Costs (Residential)

In October 2008, you would have paid $122.98 for 1,000 kWh; in January 2009, you would have paid $4 less, just $118.96, if you used the same amount of energy.

But, everyone uses less energy in October and more energy in the winter. Although the energy rate is less, your bill is higher because you used more energy. Most customers saw a higher electric bill this past month. This is natural, because the average temperature in January 2009 was eight degrees colder than December 2008, the month before, or January 2008, a year ago.

Colder Weather = More Energy Use

Compare the average temperature with the amount of energy all of SMECO’s customer-members used each month, and you will see that when the weather is colder, people use more energy.