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GVEC notes increase

Wednesday, July 2, 2008 7:59 AM CDT

At its June board meeting, the Guadalupe Valley Electric Cooperative (GVEC) Board of Directors approved a rate increase to compensate for the rising cost of generating electricity.

According to a report from GVEC, an average all-electric, residential home will pay approximately $22.50 more per month as a result of the increase. The new rates become effective in August.

The cost per kilowatt-hour (kWh) for a residential home is currently 9.7 cents. That rate will increase to 11.2 cents per kWh.

According to GVEC General Manager and CEO Darren Schauer, “Up to this point, GVEC has been able to avoid passing along these increases to its membership; however, the increases have kept coming and there is no indication of prices trending downward in the near term.”

This price adjustment comes primarily in response to the increasing cost of natural gas, which is a major fuel used to generate electricity. Toward the end of 2007, natural gas prices were around the $7-$8/mmBtu range. Now, prices are in the $10-$12/mmBtu range with future prices indicating to be in the $12-$14/mmBtu range.

Additionally, the electric utility industry as a whole is also facing long-term challenges such as growing demand and increased construction costs for new generating facilities, as well as environmental and regulatory pressures which are creating uncertainty and cost speculation, all of which spell out increased prices.

“The staff and Board realize that this increase comes at a time when costs are rising in every direction, from gasoline to food, so this is a decision that was not taken lightly,” Schauer said. “We understand that this increase is not insignificant to many. We have your interests at heart and we will work diligently for you through these challenging times.”

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