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More DEMCO questions answered

Published: Nov. 16, 2021 at 5:38 PM CST
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BATON ROUGE, La. (WAFB) - DEMCO officials said while their cost of distribution has not gone up, the cost per kilowatt-hour has increased due to high fuel costs.

According to DEMCO, natural gas fuels 70 percent of electricity-making plants in Louisiana.

They said the price of natural gas is 78 percent higher this year than last year.DEMCO is expecting prices to go down some in about two months.

That’s when their wholesale power supplier, Cleco, will shut down one of the power stations that they say is costly.

Below is DEMCOs full statement:

There are many reasons why a member may see an increase in their bill:

DEMCO distribution costs are virtually the same from month to month. However, the cost per kWh has increased due to high fuel costs. The price of natural gas which fuels 70% of electricity-making plants in Louisiana, increased 78% since last October. The price of natural gas was 78% higher than on Oct. 22, 2021 than it was on Oct. 22, 2020. ($5.28 per Metric Million British Thermal Unit natural gas in 2021 compared to $2.99 MMBtu.

DEMCO is offering payment arrangements to any member affected by high bills

DEMCO is offering levelized billing to members who are eligible

DEMCO’s wholesale power supplier Cleco, is in the process of shutting down their Dolet Hills power station - they are running it to burn off all the fuel it has – it’s very inefficient and costly and until that unit is closed and its cost is no longer a part of our costs, another two months of high bills are likely. We hope that in early 2022 our members will begin to see relief once this plant is closed.

At the direction of the DEMCO board of directors, a new wholesale power contract has been negotiated, signed and submitted to the Louisiana Public Service Commission (LPSC) for review and approval. If approved by the LPSC, the new wholesale power contract will go into effect when the current contract expires in early 2024.

Another reason for a higher than usual bill, happens when our system doesn’t receive the meter reading. The meter is working and capturing the kilowatt hour data, but if it doesn’t transmit that data to our system, we estimate the bill based on the member’s previous usage.

Though we have been working to replace our current meters with new meters, we have had to suspend that for now due to the national meter shortage – supply chain issue with the digital chip. In the meantime, and to eliminate estimated bills altogether, we are using our meter contractors and staff to get actual meter readings reported in our system. When the kilowatt hours on the meter is greater than what was estimated, a member will see that increase in their bill. It is the true reading and an accurate bill, but often higher than subsequent bills because those bills were estimated.

For members who are not living in their homes due to Ida, the meter only spins when electricity is running. Even if they are not living in the home, if something is pulling electricity, the meter records will record it. On the bill, it shows the meter reading start and end date and many kWh were used – then the member is billed according to their rate for that usage.

According to a contract submitted to the Louisiana Public Service Commission, the new wholesale power cost would decrease further.

Officials from LPSC said the new contract could be up for approval late next year.

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