Planning for the Future
As a member-owned cooperative, one of Wells Rural Electric Company’s (WREC’s) most important tasks is looking down the road and trying to set a path that navigates potential future roadblocks while best preparing members to take advantage of the changing industry.
A prominent example is the cooperative’s work on a regional level to ensure the Bonneville Power Administration (BPA) — WREC’s power supplier—remains competitive and controls its costs during each two-year rate case.
These rate cases ultimately determine what members pay each month.
The process usually starts with a proposed increase in the double digits. During the course of 24 months, WREC works with other BPA customers and typically whittles that figure down to low single digits.
While BPA has not finalized the 2021 rate case that will go into effect in September, WREC anticipates the worst-case scenario will be a slight increase.
As important as each rate case is, it is also essential to look further down the road to determine how the industry may change.
While it is impossible to know exactly what the future holds for members’ service, the best way to save energy and money involves increased control over their accounts and energy use.
Beneficial electrification is a popular buzzword. Part of that refers to the continued growth of home automation products that allow consumers to control appliances, lights, and heating and cooling from their smartphones.
The Nest thermostat program is an example of WREC tailoring programs to take advantage of opportunities within that trend.
In that same vein, members will likely continue to find value in WREC’s smartphone app, SmartHub, to monitor their energy use to save money. For that reason, WREC has incentivized online payment to inspire more members to become familiar with our online and mobile resources.
Why does this matter? SmartHub is far more than a payment tool. It is a hub for your account that provides information about your use and habits.
As WREC’s board looks to the future, savings for residential members could come down to the amount of flexibility offered by implementing a demand charge for residential members.
While most members are aware of the energy or kilowatt-hour charge and the basic service charge, demand is a third component built into rates. Demand is a concept already familiar to members in industrial and irrigation rate classes.
Demand refers to the cost associated with each member having access to enough electricity at any given time to meet their highest level of energy use. Sound complicated? One way to think of demand is like buying a Suburban with eight seats. The driver might only need that kind of capacity in the spring while hauling children to Little League games, but there is still a cost for having that capacity always available.
When it comes to electricity, peak demand may be in the evening, for example, when everyone is home. Simultaneously, the HVAC system keeps the house cool, laundry is washing and drying, the dishwasher is running, and dinner is being prepared on the electric range while several televisions, computers, and devices are being used. There is a cost associated with the ability to do all those things at once.
Implementing a demand charge is one way of giving members the power to lower their bills by flattening that peak. In this example, maybe the member decides to start the dishes in the morning when they leave for work, do laundry in the evening when they go to bed, use the barbecue outside and raise the thermostat a few degrees.
SmartHub is a great tool to provide the data necessary to make such decisions.
WREC cannot say at this point that residential demand is a certainty. However, the cooperative can say automation and account management on mobile devices are likely to be central to members getting the most out of their service.
Rather than waiting for that time to come, WREC is implementing and planning programs now that will prepare members for the future.