Fuel Adjustment
Frequently asked questions about REC's fuel factor adjustment:
Q. What is the fuel factor adjustment on my bill?
As you are probably aware, the price of natural gas, oil and coal used to generate electricity has skyrocketed. The market sets the price for these fuels on a state and national basis. REC is a distribution cooperative that does not generate any of the electricity it sells. The Cooperative operates as an energy "wholesaler," buying electricity in bulk to benefit its member-owners. The fuel factor adjustment on your bill is a way for REC to be reimbursed for the actual cost of the power purchased to meet the needs of its member-owners. As a not-for-profit cooperative, REC has a responsibility to charge you only what is necessary. REC's fuel factor adjustment allows this to be accomplished. Other rising costs that affect the adjustment include the cost of meeting environmental regulations related to power plant emissions.
Q. Is the fuel factor adjustment a rate increase?
As part of our goal to provide reliable electric service at a reasonable price, REC has maintained its current distribution rate since 1992. Your Cooperative's rates have not increased.
Q. What is the history of REC's fuel factor adjustment?
The fuel factor adjustment has been in effect since the early 1980s. Since its inception, this adjustment has not always been a charge to REC's member-owners. At times, this adjustment has actually been a credit. It has always been used to "adjust" the amount charged to member-owners as the price of fuels used to generate electricity increased or decreased. Adjusting bill statements on a six month basis for changes in fuel costs protects the Cooperative's member-owners from experiencing sudden large changes from one billing period to the next. It also enables REC to recover the price it has paid for electricity.