Understanding your electric bill

August is typically one of the warmest months of the year, and that means air conditioners across our community are working overtime to keep homes comfortable. During periods of extreme heat, many members might see an increase in their electric bill and wonder what factors contribute to the cost of electricity.

At Powell Valley Electric Cooperative, we believe understanding your electric bill is an important part of being an informed member. While the total amount due might seem like a single number, it actually reflects several different costs associated with delivering reliable electricity to your home or business.

The largest factor is often the amount of energy you use. Electricity is measured in kilowatt-hours, and the more energy your household consumes, the higher your bill will be. During the summer, air conditioning is typically the largest driver of increased energy use. When temperatures climb into the 90s or higher, our cooling systems run longer and more frequently, consuming significantly more electricity than they do during milder weather.

Another major factor is the cost of generating or purchasing electricity. Like many cooperatives, Powell Valley Electric Cooperative purchases power from TVA. The cost of producing electricity fluctuates based on fuel prices, including natural gas, coal and other energy resources used to generate power. Changes in wholesale power costs influence the price of electricity delivered to members.

Closer to home, Powell Valley Electric Cooperative maintains the local electric distribution system such as utility poles, power lines, transformers, substations and other essential equipment that safely delivers power to members. All members pay a fair share of the basic, operational costs required to keep the power grid reliable and ready to serve your home or business. Whether a member uses a little electricity or a lot, we must maintain infrastructure and have crews, equipment and resources available to provide electricity around the clock.

Summer temperatures can also influence costs in less obvious ways. When the demand for electricity is high across a region, wholesale power prices can increase. Utilities and grid operators must ensure enough generation is available to meet peak demand, and those costs can be reflected throughout the electric system.

The good news is that simple steps to lower energy use can make a meaningful difference. Setting your thermostat a few degrees higher when you’re away, replacing dirty HVAC filters, using ceiling fans, sealing air leaks and avoiding the use of major appliances during the hottest parts of the day can help reduce energy consumption, lower your bill and reduce strain on the local grid during peak demand.

Powell Valley Electric Cooperative’s mission is to provide safe, reliable and affordable electricity while being transparent about the factors that impact energy costs. We understand every dollar matters, and we are committed to making smart investments that keep the lights on and support the communities we serve.

Thank you for allowing Powell Valley Electric Cooperative to serve you.

-Brad Coppock