Hernando Today
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Withlacoochee Projects Single-Digit Rate Increase
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Published: September 7, 2008
BROOKSVILLE - For Withlacoochee River Electric Cooperative customers watching other utility companies in the region announcing double-digit rate hikes and bracing for a shock of their own, the cooperative has some relatively good news.
The cooperative, known as WREC, plans to keep its rate increase at 8 percent or less - and hasn't ruled out the possibility of avoiding a hike altogether, spokesman David Lambert said.
"We're forecasting right around 7 percent, and it pains us to do that," Lambert said.
That would put the price of 1000 kilowatt hours at about $120, up from the current price of $113 without state taxes.
But Lambert said the advantage of being part of a public, nonprofit electric cooperative will continue. WREC expects to return roughly the same amount of capital credits as last year to its more than 71,000 customers in Hernando.
The cooperative gives any annual profits back to its customers, or "members," through the credits. The credits divide up based on the amount of energy used and the duration of membership and are deducted from December bills each year.
If the rate hike happens, it would be for the same reasons given when Progress Energy and Tampa Electric announced projected rate hikes of 31 percent for next year. The cost of just about everything needed to provide energy is rising.
The price of natural gas has increased 300 percent between 1997 and 2007. The price of coal is up 120 percent.
WREC serves more than 200,000 customers in six counties. It's one of 10 electric cooperatives that own Seminole Electric, a wholesale power supplier. Seminole had projected to pay $801 million for fuel sources this year, primarily natural gas, Lambert said. The actual cost will be $43 million more than that, he said.
WREC has been able to absorb higher fuel costs because of the burgeoning growth in the region, Lambert said. Now, the housing market has crumbled but fuel costs, including the diesel that runs the cooperative's fleet, continue to climb.
The cooperative has slashed the number of contract staff and reduced its regular workforce by 16 through attrition. All told, the cooperative has 83 fewer people than about a year ago, Lambert said.
"We're cutting everything we can to keep rates low," he said. "We understand our membership's pain."
When outcry erupted last week over Progress Energy's rate hike, company officials reminded customers it also has a nuclear power plant to pay for. The power plant, proposed for Levy County, "requires a very serious initial investment" toward the total projected cost of $17 billion, Progress spokesman C.J. Drake said.
But Drake noted that the uranium used to fuel the plant is "a fraction" of the cost of coal or natural gas, so it's a good long-term investment.
WREC is trying to be proactive when it comes to energy issues, Lambert said. About 4 percent of its energy comes from renewable energy sources such as solar and biomass. Seminole recently entered a deal with a private firm to buy electricity produced from methane gas emitted from rotting garbage at Hernando's northwest landfill facility.
The cooperative also is participating in a nationwide effort encouraging members to press lawmakers to address rising energy costs and invest in renewable sources.
Regardless of whether customers are thinking globally, they're certainly acting locally, Lambert said. A large part of a decrease in kilowatt sales over the last year can be attributed to conservation efforts on the part of WREC members seeking to ease the damage to their checking account, he said.
"Absolutely, folks are using less," he said.
Reporter Tony Marrero can be reached at 352-544-5286 or lmarrero@hernandotoday.com.
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