Frequently Asked Questions
For Commercial, Industrial, and Irrigation Customers
“Demand” is the total amount of electricity being used by a consumer at any one time. Demand varies from hour to hour, day to day and season to season. This usage, which is expressed in kilowatts (not kilowatt-hours) is called the “demand” on the system. Wasco Electric monitors demand over a 15-minute period. The customer is charged for the highest 15-minute average recorded on the demand meter. After Wasco Electric reads the meter each month, demand is reset to zero and the meter starts over, recording the highest 15-minute average for the next billing period.
What Is Demand Charge?
Demand charge is based on each customer’s maximum 15-minute demand on the cooperative’s distribution system each month. Demand is measured in kilowatts (kW). Customers are billed according to kW of demand for their rate.
To illustrate how demand charge can affect an electric bill, let’s look at two simple examples:
Example 1:
Running a 20 kW load continuously for 50 hours would result in usage of 1,000 kilowatt hours (kWh) and accrue a demand charge of 20 kW.
20 kW X 50 hours = 1,000 kWh
Demand = 20 kW
Example 2:
Running a 2 kW load for 500 hours would also result in usage of 1,000 kWh but would only accrue a demand of 2 kW.
2 kW X 500 hours = 1,000 kWh
Demand = 2 kW
Both examples use the exact same amount of energy (1,000 kWh) and perform the same amount of work. However, the resulting bill will be very different.
Applying Wasco Electric’s Irrigation rate demand charge of $6.58 per kW and an energy charge of 6.63 cents per kWh to both examples produces the following results:
Bill #1:
20 kW X $6.58 = $131.60
1,000 kWh X .0663 = $66.30
Total = $197.90
Bill #2:
2 kW X $6.58 = $13.16
1,000 kWh X .0663 = $66.30
Total = $79.46
Why So Different?
The actual energy (kWh) used is the same, and the work done is the same. The difference between the bills is based entirely on the highest demand recorded during any given 15-minute period that month.
Why Are Demand Charges Used?
Demand charges are the way your co-op pays for generation and distribution capacity it needs to meet peak demand that occurs from time to time. The demand charge your co-op pays to its wholesale power supplier is also calculated on the basis of the highest demand during the month. Wasco Electric uses the same method to bill demand to its demand-rate customers.
Who Incurs A Demand Charge?
All of the cooperative’s larger customers that are billed under the commercial, industrial, or irrigation rate schedules.
Are Demand Charges Unique To Wasco Electric?
No. Demand charge billing is used consistently in the electric utility industry.
How Can Demand Charges Be Reduced?
To reduce demand charge, simply examine your operation.
* What energy-efficient improvements can be made?
* Does all of the equipment need to be running at the same time?
* If not, what can be turned off while other equipment is running?
Sometimes, there is equipment that is operated infrequently. If this is the case, can some other equipment be turned off while this equipment is running? The result may be a significant savings in your monthly demand charge.
The delivery charge is the fixed portion of your monthly power bill which covers the stranded or fixed costs of the system in place to provide you with electricity. Whether you use electricity every day or simply on an occasional basis, the poles and wires remain ready to serve. The basic charge pays for such things as maintenance of the power poles, wires, transformers, meters, substations, and line equipment as well as a portion of the expenses of reading the meters, billing, and maintaining customer records.
After the patronage capital is assigned to you, the cooperative uses your money to cover the operating costs and capital investments. This in turn helps keep your rates down by allowing us to not borrow money to operate on and make capital investments.
The capital credits are refunded only upon authorization by the member-elected Board of Directors. According to the bylaws, the board cannot authorize refunding capital credits if it will financially impair the operation of the cooperative.
The Board of Directors, consistent with the cooperative’s bylaws, have established a policy that in order to receive a decedent’s capital credits prior to normal retirement, the refund amount is reduced by the net-present-value of the future expected distributions. This applies only to living persons and not to businesses or corporations that cease to exist.
Capital patronage is the assignment, to Wasco Electric Cooperative members, of each account’s portion of the margins [profit] for a year. Since Wasco Electric Cooperative is a non-profit organization, all profit or margins are assigned to you, the member-owners.
An example of this is as follows:
Revenue: $1,000,000 – Expenses: $900,000 = Profit/Margins: $100,000
For the sake of keeping it simple, imagine that you paid $100,000 for energy that year or 10% of the total revenue came from you. At the end of the year 10% of the margins [$10,000] would be assigned to you.
This assignment comes to you in a letter each year. Many people confuse it with a power bill or credit. It cannot be used as a credit on your next bill.
The cooperative will need to occasionally schedule a planned outage in order to do maintenance or repair work on our lines. In the event of a planned outage, we will make every effort to notify you by phone or through the local media.
Report outages 24 hours a day!
541-296-2740 or 800-341-8580
Any equipment beyond the member’s meter is the responsibility of the member. Therefore, if your power goes out, first check your fuses or breakers. If you find a problem with the fuses or breakers, you will need to contact a local electrician for repairs. If our crews are requested to respond to such an outage and the problem is on the member’s side of the meter, the member may be billed the actual cost of labor and overhead.
If you determine that your fuses and breakers are O.K., check with your neighbors to see if their power is off also. When you call the office to report an outage, please provide your name, address, phone number and any information you might have on what may have caused the outage. In most cases we will attempt to call back to confirm that your power has been restored.
Any revenue collected and not used to pay operating expenses [profit] is returned to the members of Wasco Electric Cooperative in the form of capital credits. Profits earned by IOUs are repaid to stockholders, not customers. Profits earned by PUDs and Municipals are retained by them.
Wasco Electric Cooperative is locally owned and controlled by the members. Directors, who must be members, are elected each year at the annual meeting by the members. The board functions as a body planning, setting policy and approving budgets. Their common goal is providing the best possible services at the lowest possible cost.
IOU boards generally consist of stockholders interested in a rate of return on their investment.
In 1935 President Franklin Roosevelt signed the Rural Electrification Act that made it possible for many rural people to organize electric cooperatives. The REA, as it was called, gave electric co-ops access to low interest loans for the purpose of constructing transmission and distribution systems in order to provide central station power to rural America. Many of the country’s People’s Utility Districts [PUD] also had access to REA funds.
At the time the REA Act was signed there were very few rural people fortunate enough to enjoy the luxury of electricity that their city cousins had. Even if you happened to live next to the road right of way where an Investor Owned Utility [IOU] had a power line, the costs to connect in most cases was prohibitive, and you certainly could not afford to have the line built over a great distance. Evidence of this is still apparent today as you drive down Highway 97 in Sherman County.
Today, electric co-ops nationwide serve 10.8 percent of the population and account for 7.4 percent of the energy sold. Although they own and maintain nearly half of the distributions lines in the U.S., spanning three quarters of the land mass, they average only 5.8 consumers per mile and collect revenues of approximately $7,000 per mile. IOU’s average 35 customers per mile and collect $59,000 per mile of line; and public utilities, or municipals, average 48 consumers and collect $72,000 per mile of line. As a comparison, Wasco Electric Co-op has a density of 2.9 consumers per mile and collects revenue of approximately $6,050 per mile.