The daily cost of living seems to have increased across the board, including the cost of electricity.

Just as inflation has impacted everything from the price of gasoline to the price of eggs, costs for the fuels required to produce electricity have also risen. This is a timely topic, so we wanted to help explain some of the factors that impact electricity prices (and energy bills).

While there is no short answer, there are a few key elements that impact electricity prices and rates. Some of these factors Central Wisconsin Electric Cooperative (CWEC) can manage, some of them you can impact and other factors are beyond our control. So, let us break it down.  

There are three primary parts to your monthly electric bill: a basic charge, an energy consumption/kWh charge and a Power Cost Adjustment (PCA). To understand your total energy costs and what impacts your bill, lets unpack one piece at a time.       

The first is a monthly basic charge, which covers the costs associated with providing electricity to your home. This includes equipment, materials, labor and operating costs necessary to serve each meter in CWEC’s service territory, regardless of the amount of energy used. In order to ensure the reliable service you expect and deserve, we must maintain the local system, including power lines, substations and other necessary equipment. Like many other businesses, we’ve experienced supply chain issues and steep cost increases for some of our basic equipment.

Another component of your monthly bill is the charge for each kWh used, which covers how much energy you consume. You’ve likely noticed the amount of energy you use can vary from month to month and is typically impacted by extreme temperatures. When temperatures soar or dip, your cooling and heating equipment run longer, which increases your home energy use. Regardless, energy consumption is an area that you have some control over, and you can lower your monthly bill by actively reducing energy use. Your thermostat is a great place to start, so be sure to keep it close to 78 degrees during summer months.

The last component of your bill is the PCA, which is the same rate for all co-op members. The PCA recently increased because of higher fuel prices, which means the power that the co-op purchases from our wholesale provider is more expensive. The PCA covers fuel cost fluctuations without having to continually restructure electricity rates.  

We hope this information sheds light on some of the factors that impact electricity prices. While we can’t control the weather or the rising costs of fuels, please know that CWEC is doing everything possible to keep internal costs down.

We’re here to help you, too. Contact us if you have questions about your energy bill or for advice on how to save energy at home. You can call our office at 715-677-2211.