When Do Members Get Paid For Their Capital Credit?
Retirement of capital credits usually takes place in December. To date, we have retired (paid) capital credits through the year 1993. We anticipate retiring 1994 capital credits, this coming December, in the amount of roughly $1.1 million to our Bundled Electric Energy Service Members, if all financial goals are met in accordance with the Board’s capital management policy.
Why Have The Electric Prices Gone Up?
While investor-owned companies are raising rates, Rio Grande Electric’s rate schedule has not changed at all since June 21, 2018. There has been some fluctuation in the Power Cost Adjustment (PCA) portion of your bill over the past few months due to costs associated with wholesale power, but this amounts to only fractions of a cent per kWh. For example, the August billing statement reflected a reduction in the Texas PCA of $.0035 hundredths of a cent per kWh. Based on electric energy usage of 1,000 kilowatt hours per month, this would amount to a credit of $3.50. For most of last year, your PCA was actually a negative number (a credit). Higher bills are likely due to the amount of power you’ve been using. The summer heat wave brought some scorching temperatures to Co-op Country! Remember that the Time Of Use Rate was in effect for 4 hours per weekday from May through September. If you were using more power during these hours, that is 1 thing that would most assuredly drive up the amount of your bill.
I should mention that we were notified by our wholesale provider and transmission operator that there is a possibility the transmission service charges could rise in the coming months due to ERCOT’s new product called ERCOT Contingency Reserve Service or (ECRS), which was designed to provide insurance against another grid disaster like the 1 we saw during Winter Storm Uri. We will not know exactly how much the increase will impact us until we receive the wholesale power bill.
When Are Rio Grande Electric Coop Grants Available?
This year, we announced the availability of grants for qualifying non-profit organizations in the February magazine, and periodically through our social media pages. Applications were accepted from March 1 to June 30, and we anticipate the same timeline for the coming year. The Board of Directors made their selections at the July board meeting. Please look for further details next year in the RGEC’s magazine and on our social media pages. We always publicize well in advance.
I Live in Desert Haven & Want To Know Why I Can’t Get on El Paso Electric. We Have Too Many Outages & It’s Not Getting Any Better. I Wish I Could Have A Contact Number For The President Or The Person In Charge of Rio Grande Electric & Express My Concerns, but Unfortunately, No One Will Provide Me That Information.
Thank you for your comments. The Public Utility Commission of Texas determines which areas are “certificated” by provider/region. This determines their service territory, and whether they are in a regulated or deregulated area. The law gave cooperatives and municipalities the option of becoming deregulated. Rio Grande Electric Cooperative did not opt into the deregulated electricity market, because we did not believe that it would be beneficial to the membership, and recent events have proven we were right. This is how you avoided the huge electric bills that many Texas residents experienced with the ice storms when consumers were getting billed thousands of dollars for their electric usage during the winter storms. If you participated in last year’s annual meeting, you may recall that the board of directors opted to under-recover from members by about $1 million dollars for costs incurred during the ice storms.
I am fully aware of the issues in your area, and that is why the Construction Work Plan I discussed in my report has devoted over $3 million to improvements and new equipment to help remedy the situation. It will take a while for construction to be completed and these improvements implemented, but I assure you that we have not forgotten about you. This is a high-priority area. Your new area operations manager is on it and is as anxious as the rest of us to resolve the ongoing issues you and your neighbors have been experiencing.
As for the 2nd part of your comment about reaching the president or person in charge of Rio Questions & Answers With CEO Theresa Quiroz W fo R us be id) it l dit Rio Grande Electric Co-op November 2023 9 Grande Electric, you can find the contact information for the board of directors and CEO every month in your magazine, or on Rio Grande website. You may also reach out to your local Area Operations Manager, or possibly someone from your area on the Member Advisory Committee. Their contact information is also listed on the website.
What Is The Power Cost Adjustment Part of My Bill?
If you are a residential member, your monthly bill is composed of 3 things – the rate, the Power Cost Adjustment also known as the PCA, and the Availability Charge. From May through September, you would also add in the charges for power used during the 4 Peak hours per day. The PCA is the portion of the bill which can increase or decrease to reflect the actual cost of wholesale power that Rio Grande has to pay. (TX CHART) In many months, the PCA will be a negative number, which means it is applied as credit. In other months, it will be reflected as a fraction of a cent per kilowatt added to your bill. I’m glad you asked about this, because we just recently received word from our transmission provider about something that may mean we will be increasing the amount of the PCA for a few months. This is due to a substantial new ancillary services charge from ERCOT.
To fill you in, the Electric Reliability Council of Texas in mid-June introduced a new pool of power reserves that could come online quickly to help keep the grid stable. The ERCOT Contingency Reserve Service, or ECRS, was designed to tap supplies that can come online within 10 minutes to help fill in for solar power dropping at sunset and to keep the grid’s frequency in check.
A company firm hired by the state as the independent monitor of the Texas power market, published its analysis of ECRS which said that while the initial estimate for additional costs is $8 billion, that number could increase.
In Texas, jumps in real-time market prices aren’t immediately felt by customers. But as fixed electricity contracts roll off, higher prices will eventually make their way to ordinary Texans. The Power Cost Adjustment portion of your bill is where you would see any additional charges for ECRS reflected.
This was a letter we received from a member of the Brackettville Area, in April. I wanted to share it with you here, because if 1 member had a question on this, others might, as well. I responded to this member in a letter.
As I was reading through the annual report inside the April 2023 issue of Ranch and Rural Living, I have several questions related to the accounting and finance section.
According to the report, under the prior year of 2021 Statement of Operations, Non-Operating Margins – Other: There is a $22,757 positive amount. Under the same section for the year 2022, there is a negative amount of $976,556. I am very interested to know where 1 million dollars went.
The 2022 Audit Report is made available online. The negative amount referenced in your letter does account for a $1,000,000 inventory impairment (or loss) under the Non-operating Margins for 2022. This loss is also referenced on Page 6 of the Audit Report, as well as the explanation on Page 11 under Materials and Supplies.
Material and supplies are stated at the lower of average cost or market net of any inventory reserves, except for inventory held for resale, which is stated at the lower of actual cost or net realizable value. Net of any inventory reserves.
During 2022, the Cooperative entered into an inventory sales agreement with an Inventory Management Company. Under this sole-source agreement with Texas Electric Cooperatives (TEC), substantially all the materials and supplies related to items used in the build-out of plant assets are to be sold to the Inventory Management Company starting in January 2023. This entire transition was executed 1 area warehouse at a time and is scheduled to be finalized in early May 2023. Due to this impending transaction, reserves for obsolescence of inventory were increased to account for inventory that will not be purchased or used in future plant constructions. As of December 31, 2022, and 2021, the reserve for obsolescence was $1,000,000 and $0, respectively.
By outsourcing the Cooperative’s inventory handling process, along with evaluating current processes related to materials and supplies, we are in a much better position to effectively streamline procurement processes to save time and money, while ensuring we have reliable access to materials.
Why Are There So Many Substation Outages, & Do You All Conduct Maintenance On Them, Or Just Go Fix Things When They Go Out?
Substations receive monthly inspections, during which time any items needing attention are attended to. By their very nature, substations contain complicated electronic equipment, they are exposed to the elements and to all kinds of creatures, as well. This puts them at risk for a multitude of issues, and sometimes what are perceived as issues with Rio Grande’s substations are actually on the transmission side. When damage occurs from something like a lightning strike, or a snake or animal in a transformer, it is repaired immediately.
We recently underwent an ERCOT substation inspection, during which substations were selected at random. Each of the selected substations passed with flying colors and the inspector was thoroughly impressed with the knowledge of Rio Grande’s personnel, as well as the Cooperative’s overall thoroughness with weatherization preparedness. He left assured that RGEC applies the same level of thoroughness at all substations. The responsibility for the operation and maintenance of substations lies with RGEC’s Technical Services and Operations departments, and they continue to do an outstanding job.
Questions not answered during the meeting will be addressed in an upcoming edition of the magazine, and/or through direct correspondence/ phone calls.