Important Changes as of May 1, 2023

Learn about Valley Electric’s Power Cost Adjustment and new billing structure

Valley Electric is making some changes to your bill, effective May 1. The first uses the Power Cost Adjustment, which is already listed on your monthly electric bill. The second optimizes the billing process for both electric and broadband accounts.

Power Cost Adjustment Utilization

Power Cost Adjustment allows electric utilities to recover the additional costs associated with changes in the price of fuel, transmission, or other factors that affect the cost of generating and delivering electricity. By adjusting the price of electricity, utilities can ensure costs are recovered and financial stability is maintained to continue providing reliable service to customers.

The reutilization of the PCA charge that has been on your bills for several years will give the cooperative a way to reflect the actual charges in wholesale power costs.

The PCA is typically calculated on a monthly or quarterly basis, and the adjustment is based on a formula that accounts for the actual cost of purchasing electricity during that period. This fluctuating charge is directly related to power costs, not a change in the rates. It does not produce extra revenue for the cooperative.

PCA allows utilities to more easily adjust their rates with changing power costs in a volatile market. If the cost of electricity goes up, the PCA will be positive, and customers will see an increase in their electricity bills. If the cost of electricity goes down, the PCA will be negative, and bills will decrease.

Valley Electric Association does not generate electricity and must buy it from a wholesale market to meet the needs of our members. The PCA changes are based on the actual cost of wholesale power versus budget, which fluctuates for a variety of reasons.

During hot summer months when the demand for electricity is much higher— especially during peak times—power may need to be bought from more expensive sources at high market prices, as opposed to contract power supply agreements at a fixed contract price. Increased costs for fuels, such as natural gas, also impact the price of wholesale power.

Between September and December 2022, Valley paid an additional $8 million for power due to volatile market conditions. This expense was not recovered through the billed energy charge. The main contributing factors in these unforeseeable financial events were extreme temperatures, high demand use at the end of summer, and the loss of the natural gas pipeline in December. Valley must pass along these costs to our members to ensure financial stability.

To begin recovering this loss, Valley will implement the PCA with a base rate of $0.0150. This is a direct pass-through charge to recover the loss experienced in 2022. This portion of the PCA is projected to last for the period of 12 months to spread the costs over a longer period, allowing for the lowest impact possible.

In addition, we will roll additional losses or gains monthly. Fluctuations will depend on relative power costs and the budget. To begin, the adjustment for January and February will show up on May bills. After the initial implementation, the PCA will be reviewed monthly, and the difference will be collected or credited on a 60-day delayed period.

Overall, the Power Cost Adjustment is an important tool for electric utilities to provide reliable service to customers.  While it may be a source of frustration for some, the PCA is essential to the electricity industry and helps ensure utilities can remain financially stable and responsive to changing market conditions.

Billing Optimization

As a valued member, we want to inform you of some upcoming billing changes that will affect your account. We understand change can be difficult, but we believe these changes will benefit you by allowing us to optimize processes to provide better service. To increase efficiency, the billing department will transition billing due dates to accommodate several changes in the way the cooperative currently bills electric and broadband accounts.

The electric billing will transition to four billing dates a month as opposed to the current 28. Bills will be moved to the closest billing cycle to a member’s current due date to accommodate our members as best as possible. During the transition period, the number of billing days on your power bill will vary. Toward the middle of your monthly bill, you can view how many days you are being billed for.

All broadband accounts will transition to one billing date as opposed to the current 28. The new billing due date will likely be different than the original one, as all Valley Communications Association services will be billed on a calendar month basis—first through last day of each month—going forward.

VCA will also transition members to pay ahead of service instead of behind. This will potentially increase the charge on your bill during the initial cycle as accounts are trued-up during the transition period.

In addition, VCA services will be on a separate statement for those members who haven’t already been billed separately for electric and VCA services. These changes are part of system upgrades being performed to better serve our members.

In preparation for these changes, we encourage members to use SmartHub to make it easier for you to view and manage your account, as well as set up automatic payments or payment reminders.

We also offer two forms of budget billing. Under a budget billing plan, your annual energy use is averaged and then divided by 12 to determine the monthly payment amount. This means members pay roughly the same amount each month, regardless of their actual energy use. If a member ends up using more energy than estimated, they may owe additional money at the end of the year. On the other hand, if they use less energy than estimated, they may receive a credit or refund.

Budget billing can be helpful for members who want to avoid large fluctuations in their monthly bills, allowing them to better manage their expenses.  However, it’s important to note that budget billing is only an estimate based on past average use. Members should still monitor their energy use to avoid unexpected charges at the end of their budget billing year.

Check with our member service team to see if you qualify for $30 or more off your broadband bill each month. This monthly broadband assistance helps offset your electric bill or any other increase you are experiencing due to the rising costs we are facing in our economy. In addition, we have partnered with Nevada Outreach to help our members apply for any eligible assistance programs available.

We understand that billing can be a sensitive topic, and we want to assure you we are here to answer any questions or concerns you have. Please do not hesitate to reach out to our member service team for assistance, to enroll in budget billing and learn more about monthly broadband assistance.

Visit www.vea.coop or contact our member service team at 775-727-5312 for more information.