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Pioneer customers see wholesale rate increase in August

Pioneer Electric Cooperative members will see an increase in the wholesale rate adjustment portion of their bill effective immediately.

“Recently, our wholesale power provider, PowerSouth, implemented a rate increase to compensate for an increase in fuel and purchased power costs,” said Pioneer Electric General Manager Steve Harmon. “As a result, Pioneer’s operating costs will increase proportionately. Due to limited coal supply, PowerSouth had to purchase coal on the spot market for more than two and a half times its budgeted cost. Since 2000, PowerSouth has seen a 151 percent increase in coal costs while natural gas prices have soared as much as 446 percent higher since 2000.”

In July, PowerSouth’s Board of Trustees approved a measure to increase wholesale power costs by 8 mills/kilowatts per hour (or $8 per 1,000 kwh), with additional rate increases expected in 2009.

For the June 2008 Pioneer residential billing cycle, 1,000 kwh cost $120. In August, the residential rate of 1,000 kwh will cost $124.20.

Last year, the average Pioneer household used 1085 kwh per month. Due to the increase of current wholesale rates, our members will on average see an increase of $8 per month.

“None of this additional revenue will come to Pioneer,” said Harmon. “It will go to PowerSouth to recover their fuel cost.”

Harmon said Pioneer Electric’s last base rate adjustment was in June 2003 and it would remain unchanged.

“We pride ourselves on avoiding routine price adjustments,” h said. “We only consider an adjustment when we have no other choice because we believe reliable service at a reasonable rate is something our members deserve. Although we must raise our price to cover the costs of doing business, we remain proactive in planning for future energy needs and are committed to ensuring this occurrence has the smallest impact on our members.”