Understanding Factors That Impact Your Energy Bills

While January and February bring some of the coldest weather of the year, the spring and summer months have their own unique influence on our electric bills.

A few key factors affect electricity prices, but you also can make a meaningful impact on home energy savings.

When you receive your monthly bill from South Alabama Electric Cooperative (SAEC), you’re provided with a summary of how much electricity you used during the billing cycle. On the SAEC mobile app, you can even see how electricity use may have spiked on a particularly chilly (or hot summer) day or when guests stayed with you.

However, you might be surprised to learn that beyond your monthly energy consumption, there are external factors that can impact the cost of electricity.

Fuel Prices

SAEC buys electricity from its power generation partner, PowerSouth Energy Cooperative at a wholesale cost, then we deliver that power to our communities. The cost of generating and transmitting electricity from our generation partner accounts for a significant portion of the expense to provide electric service to homes and businesses — and the cost of fuels that are used to generate that electricity, such as natural gas, fluctuates based on supply and demand.

While these fluctuations can impact the cost of electricity, we work closely with PowerSouth Energy Cooperative to plan and help stabilize electricity prices for our members.

Extreme Weather

While we can’t control the weather, we can review weather patterns and forecasts to prepare for times of extreme cold or heat, when we know the demand for electricity will increase. However, when temperatures become extremely cold and the demand for electricity spikes, the price of electricity can also increase.

Infrastructure & Equipment

To cover the costs associated with providing electricity to your home or business, SAEC members pay a monthly base charge. This flat monthly fee ensures fixed costs such as equipment, materials, depreciation, and interest are covered for all members in SAEC’s service territory.

To ensure the reliable service you expect and deserve, we must maintain the local grid, including power lines, substations, and other essential equipment.

Energy Policy & Regulations

Federal energy policies and regulations can have a profound impact on electricity costs. As energy generation shifts to the use of more renewable sources and stricter regulations for traditional, always-available fuel sources, such as natural gas and coal plants, costly upgrades, and technologies must be constructed and deployed. These additional costs are ultimately passed to consumers.

U.S. power consumption is expected to double by 2050. Across the country, electric cooperatives are working with members of Congress to advocate for smart energy policies that reliably power our local communities.

We are urging the Trump administration to take concrete steps to repeal the EPA’s power plant rule and bolster the long-term reliability of the nation’s grid.

You Have Control

While many of these external factors that impact electricity costs are out of our control, we have the power to manage our energy use at home. The most effective way to lower use is thermostat management. Since heating and cooling account for a major portion of home energy use, adjusting the thermostat to the lowest comfortable setting can help you save energy and money.

Remember to service your heating and cooling system annually and replace dirty filters as needed.

You can also reduce energy use by sealing air leaks around windows, doors, and other areas where gaps are possible. This will help your heating and cooling system work less and improve the overall comfort of your home.

SAEC is your local energy partner, and we’re here to help.

For more energy-efficiency tips to help you save, visit southaec.com and click on the Efficiency Services tab. As always, we will continue working diligently to provide you with reliable power at an affordable cost.