Understanding Your Power Bill
Wells Rural Electric Co. employees work hard to provide accurate consumer accounting and ensure every bill represents reliable electricity service and tremendous value for all of our members. We also realize it can be a complex process for members who might only look at their bill and electricity use once a month when they pay their bill.
To better explain the components of your bill and electricity use—and the value cooperative members receive—we will use this space regularly to address some of the bill questions we are most commonly asked.
The No. 1 source of questions we hear from members relates to your bill’s basic service charge, which has risen steadily the past decade. This rise is a reflection of transferring costs to accurately separate WREC’s true cost of service and the cost-based rates we pass to our members after buying power for the cooperative. Here are a few common questions.
What is the basic service charge?
The basic service charge is the fee every member pays to cover the costs associated with the materials, labor and equipment necessary to ensure every member has access to safe, reliable electricity whenever they need or choose to use it.
While the member-elected board of directors actually sets the rate structures for each class, WREC conducts an ongoing cost-of-service study (COSS) to keep a pulse on the true cost of service for each rate class. The basic service charge is based on this study.
While transferring costs to the basic service charge may seem expensive on your bill, it’s an accurate reflection according to the COSS and in terms of the value provided based on what it covers. Primarily, the service charge includes the costs associated with installing, upgrading, maintaining and repairing 1,400 miles of electrified power lines that stretch through more than 10,000 square miles of WREC’s service territory.
Think of all the power lines, power poles, transformers, substations and equipment required to deliver electricity to every member and the amount of maintenance—including preventative maintenance and planning for things such as tree trimming and right-ofway clearance to protect against fires—and upgrades necessary to meet those load requirements.
Why did my monthly basic service charge increase?
For residential members, seeing the $28.89 monthly line item on your bill can be a bit of a shock.
In reality, WREC’s cost of service, and that of most electric utilities, has long been far more than the basic service charge on your bill would indicate. For years, the industry trend has been to artificially deflate the basic service charge passed on to consumers by blending the cost of service with the energy charge that is based on your kilowatt-hour use. Obviously, every utility must collect enough money to cover the cost of its service. The traditional blended rate meant WREC was obliged to ensure you used a certain amount of electricity to cover costs.
By separating the cost of service from the energy charge, the board of directors has created an environment that allows WREC to work with members to control their electricity use and save money through energy efficiency and conservation without worrying about the revenue requirements of the cooperative.
But I don’t use much electricity. Why do I pay the same service charge?
Another way to think of the service charge is to look at it in similar terms to other monthly bills for products and services, such as satellite TV or cellphones. Those companies bill customers some form of base charge for access to their product. Regardless of how much you watch TV or talk on your cellphone, the bulk of your bill is a fixed, monthly base charge for the ability to do so at your convenience. The bill then increases as you add channels to your service package or by using data.
Your electricity bill is no different. Whether you use 0 kWh or 1,000 kWh, the cost to maintain our distribution system and equipment—and thus guarantee your access to safe, reliable electricity—is the same. Our goal, and the direction your board has set, is for WREC to be in a position to help you control your costs while also providing great value for your cooperative membership.