SECO Energy CEO Curtis Wynn announced a significant reduction to residential members’ monthly energy bills that will appear on bills arriving in October to reflect September usage. The adjustment, known formally as the Power Cost Adjustment (PCA), will result in average bills totaling their lowest cost in the last five years.
SECO Energy coined the term, “Hot Bucks,” to refer to opportunities the not-for-profit cooperative electric provider acts upon to lower members’ bills. The recent stabilization of natural gas pricing has led to lower wholesale electricity costs from SECO’s wholesale provider of electricity, Seminole Electric Cooperative.
In coordination with Seminole’s projections, SECO’s Board of Trustees approved changing the PCA to lower its members’ bills. The Hot Bucks credit will reduce SECO Energy’s cost for residential service per 1,000 kilowatt hours (kWh) from $146.60 to $116.60 with bills generating as of October 1.
SECO Energy CEO, Curtis Wynn, stated, “SECO is dedicated to returning value to its members when possible. ‘Hot Bucks’ are a direct reflection of the price variation the cooperative pays for power purchased from Seminole Electric Cooperative. Natural gas is the main fuel source for power generation and a continued downward trend in price is projected as we move into the autumn months. Our Mission, as a not-for-profit cooperative is to provide reliable and innovative energy services to our members and communities. Ensuring affordable energy service is a key component to fulfilling our role as a trusted source for energy solutions.”
The reduction is displayed as a line item on members’ monthly billing statement beginning October 1 to reflect prior period usage from September.
Both SECO and Seminole are not-for-profit cooperatives that work closely to ensure the lowest rates possible for their members. When the wholesale cost of purchased power decreases, SECO passes those savings along to its members. This reduction places SECO Energy’s cost per kWh lower than the average Florida Investor-owned, Municipal and Cooperative utility.
“Like” SECO Energy on Facebook and follow @SECOEnergy on Twitter for prize drawings, news releases, and severe weather alerts affecting SECO Energy’s service territory. Manage your outage notification preferences at StormCenter. To see when SECO Energy crews/contractors are working in your area, visit our new System Improvement Map. To learn more about SECO Energy as a not-for-profit cooperative, visit About SECO Energy.
I have great news to share with you this month – Hot Bucks are back and reduce the residential bill to the lowest cost in the last five years! SECO Energy is happy to announce a significant reduction on your electric bill.
Hot Bucks (which is known formally as the PCA short for Power Cost Adjustment) will display as a line item on your monthly billing statement. The credit will appear on bills beginning October 1 to reflect prior period usage from September.
SECO’s Hot Bucks are a direct reflection of the price variation the cooperative pays for power purchased from Seminole Electric Cooperative. Natural gas is the main fuel source for power generation and a continued downward trend in price is projected as we move into the latter part of the summer.
In alignment with Seminole’s projections, SECO’s Board of Trustees approved changing the PCA to lower our members’ bills. Both SECO and Seminole are not-for-profit cooperatives that work closely to ensure the lowest rates possible for our members. When the wholesale cost of purchased power decreases, SECO passes those savings along to you.
The Hot Bucks credit will reduce SECO Energy’s cost for residential service per 1,000 kilowatt hours (kWh) from $146.60 to $116.60 with bills generating as of October 1. The chart below compares SECO Energy’s residential cost for 1,000 kilowatt hours (kWh) with other Florida utilities.
This reduction places SECO Energy’s cost per kWh in a competitive position: lower than the average Florida Investor-owned, Municipal and Cooperative utility.
Our Mission, as a not-for-profit cooperative is to provide reliable and innovative energy services to our members and communities. Ensuring affordable energy service is a key component to fulfilling our role as your trusted source for energy solutions.
Best regards,
Curtis Wynn Chief Executive Officer
We have reached the mid-point of the Atlantic hurricane season (June 1 – November 30). In early April, experts from Colorado State University’s (CSU) Tropical Weather and Climate Research forecast below-average hurricane and tropical storm activity this season.
The outlook has changed in mid-season. CSU is now predicting “above-average” levels of named and major storms with 18 projected this year. Nine of these storms will develop into hurricanes and four will be major hurricanes.
Not only are we faced with the possibility of higher-than-average tropical storm and hurricane activity this year, but CSU experts also predict the probability of a major hurricane making landfall in the United States is above the historical long-term average. As a reminder, a major hurricane is a Category 3-5 with sustained winds of at least 111 mph or greater.
STORM CONDITIONS AT ODDS?
While this forecast creates concern, there are uncertainties as to how two major weather conditions may influence the storm activity we ultimately experience in Florida. The warmer-than- normal Atlantic Ocean waters and a particularly strong El Niño weather pattern are conflicting signals. The El Niño climate pattern often breaks up storms in the Atlantic and tropics, but researchers are unsure if this pattern will continue with the extremely warm ocean waters.
Hurricanes and tropical storms form most often in September, which is why now is a good time to refresh your emergency hurricane supplies if you haven’t done so. At the time of this column printing, this year’s storms include Tropical Storms Arlene, Bret and Cindy formed in June, and Subtropical Storm Don formed in July.
Remain indoors and prepare to wait out the weather safely during a storm. Crews are dispatched to begin restoration only after wind speeds are less than 35 mph. If you shelter away from home, assess your home to make sure it is safe before you return. For homes with damage, turn off your main breaker if it is safe to do so. If appliances are wet, turn off each appliance’s breaker and then unplug. Contact a licensed electrician for repairs.
Most important, focus on your family’s safety. Stock up on hurricane essentials – buy early. When a storm approaches supplies sell out quickly.
The SECO Energy Hurricane Handbook is your one-stop guide to being StormReady before, during and after a storm. Before a storm arrives, bookmark both our outage reporting and notifications platform StormCenter and our Daily Restoration Plan map on your smartphone or tablet. Find these tools at SECOEnergy.com.
Visit your county’s EOC website and sign up for alerts from your local Emergency Operations Center (EOC) for resources such as shelter information, storm planning, evacuation orders and more.
To enroll in your county’s emergency alerts, visit www.FloridaDisaster.org. Enter the county or city and follow the enrollment link. Program your county’s number on your phone or bookmark the page in your smartphone for quick access.
MEDICALLY NECESSARY SERVICE AND SPECIAL NEEDS REGISTRY
Through the Florida Department of Health, persons with special needs can register with their local emergency management agency to receive assistance during a disaster. Visit www. FloridaDisaster.org to add your name or a loved one’s to the statewide registry.
Registering provides first responders with valuable information to prepare for disasters or other emergencies to meet citizens’ unique needs. Providing as much information as possible will allow emergency management officials to plan accordingly for future disasters. You will be emailed periodically to verify the information provided is correct and to make any necessary changes.
Unless you plan to seek shelter at an approved facility, back-up generation is critical if you are a member who relies on lifesaving medical equipment powered by electricity.
CITRUS COUNTY: SheriffCitrus.org > Emergency Management or (352) 249-2775
MARION COUNTY: MarionSo.com > Emergency Management or (352) 369-8100
PASCO COUNTY: PascoCountyFL.net > Live > Disaster Preparedness or (727) 847-8137
Go to SECO Energy’s STORMCENTER to report an outage, check the status of an outage, see the estimated time of restoration, report an area light outage and manage your notifications.
Over the last decade, SECO Energy has been on a fast-growth pace while operating with strong fiscal responsibility. Unlike other parts of the country, COVID did not slow the need for infrastructure expansion across SECO’s service territory.
The Sunshine State added more than 221,000 residents from other U.S. states between July 2020 and July 2021, according to the latest population estimates from the Census Bureau. That’s Florida’s largest gain in residents since 2005. Data compiled by Move.org shows Florida is the number one state people moved to in 2020 and 2021.
This expansion and growing demand for power will likely be our norm for a while. March 2022 challenged SECO with the highest monthly number of new services in 15 years.For SECO, this growth is occurring in the residential, commercial and industrial sectors.With the traffic and construction around Sumter County, residents might think that The Villages growth is highest across SECO’s service territory. That’s not the case. In 2021, Lake and Marion Counties grew 35 and 37 percent, respectively.
With the significant amount of growth in our three largest counties, the following three elements are necessary to viably keep pace with the activity in SECO’s service territory – and maintaincompetitive rates in the process: 1) financial capability, 2) a talented SECO team, supported by stable contract labor and consistent access to material and equipment, and 3) since we do not generate and transmit power, we must be able purchase competitively-priced wholesale power that we can sell to our members. These threeelements are critical to our success.
SECO’s 2021 Annual Report was recently published at SECOEnergy.com, and the utility’s financial position is strong. But the growth and major investments that come with this growth during a time of record inflation challenge our ability to maintain flat rates while we preserve reliable service.
Last year, SECO members consumed over 3.68 billion kilowatt hours of electric power – an increase of almost 40 million kilowatt hours compared to 2020. To support the growth in our area and increasing demand for energy, our investment in facilities has topped over $1 billion. This ongoing facilities investment averages over $6 million per month.However, we are all aware that the Federal Reserve is anticipating several interest rate hikes this year. This has our attention since we know that SECO and our funders are not exempt from the cost impact of this policy.
Leading Power generation, now and in the future. Seminole maintains a balanced and diversified portfolio of energy resources.
Like all utilities, SECO continues to manage supply chain constraints due to the pandemic aftermath caused by shortages of raw materials, lack of labor, shipping delays and increased demand for utility products. The most challenging procurements are transformers, PVC pipe, meter boxes and equipment that relies on microchips.
As a result, SECO’s inventory planning and operating model has necessarily shifted to operating around available materials. These materials constraints increase cost of inventory and price escalation beyond normal inflation. In 2021, SECO absorbed immediate cost increases without negatively impacting members’ rates in hopes of quick economic recovery. 2022 is a different story.
Meeting business targets and member requests in today’s economic environment is gaining in complexity. SECO anticipates the continuation of cost increases and supply chain interruptions. Ultimately, these factors will result in members paying more for their energy needs. Roughly seventy cents out of every dollar spent is to purchase wholesale power. In partnership with our wholesale power provider Seminole Electric Cooperative, SECO strives to minimize impact on our members and keep rates affordable and competitive.
Without question, your electric service is supported by a large, robust and well-maintained infrastructure that distributes power generated by Seminole. In recent years Seminole has taken steps to discontinue operating one of its coal units and replacing it with a natural-gas facility. Seminole continues to operate its 2.2-megawatt community solar farm and is adding more renewable energy to its portfolio.
With these strategic changes, Seminole’s power production shifts dramatically away from 42% coal in 2020 to just 8% by 2024. Its use of natural gas increases from 28% in 2020 to 73% in 2024. Renewables are planned to double by 2024, but only account for 8% of the electricity Seminole generates for SECO and its other eight member cooperatives. When these strategic operational and environmental decisions were made prior to 2020, the cost of operating coal-fired units was not as cost effective as using natural gas to produce electricity – nor was it as environmentally effective.
Since 2020, domestic and global events and the resulting economics have driven energy prices up. Oil prices have been on the rise since mid-2020, and consumers are paying significantly more at the pump. The natural gas market is affected as well. Seminole’s shift to a larger portion of its portfolio generating from natural gas has financial consequences.
The Energy Information Administration estimates that the wholesale spot price of natural gas in 2022 will reach an eight-year high. That market volatility will affect the cost of Seminole’s production of power and ultimately will reflect on members’ bills.
This impact is already upon us. Members who read SECO News and review their electric bill each month are aware of a line item referred to as the PCA – or Power Cost Adjustment factor. This calculation allows SECO to adjust for the rise or fall of fuel costs in real-time without formally adjusting rates. This is a common utility practice. As a not-for-profit utility, it prevents the over or under collection of funds from consumers.
In April, the price of natural gas and SECO’s wholesale bill from Seminole caused SECO to raise our PCA from $121.00 per thousand kilowatt hours to $128.05. Despite this fuel pass through increase, I ask that you continue reading to learn how competitive SECO’s rates are to other utilities in our area and nationally and what other steps we are taking to reduce costs.
Sincerely,
Curtis Wynn
Chief Executive Officer
Rate Stack Up
Over the last 33 years SECO’s rates have risen just 30% or slightly less than 1% per year on average. According to the Energy Information Administration, the national average rate increase for electric utilities is 45%, one and a half percent per year, which is over a half percent more per year than SECO. The cooperative has clearly remained competitive.
2022 ANNUAL MEETING CONTEST
Did you miss our live 2022 Annual Meeting webcast on March 24?To watch the video, visit SECOEnergy.com and click on the Watch and Win! 2022 Annual Meeting Video homepage banner. Watch the video with the President’s Report from Richard Dennison and the CEO Report from Curtis Wynn and answer one question for a chance to win.
Which state did Curtis Wynn say was 2nd in theentire country in electric vehicle ownership?
1. California
2. Texas
3. Florida
4. New York
5. Arizona
Prizes:
$500 SECO Energy bill credit
$250 SECO Energy bill credit
Nest Learning Thermostat
HoneyWell Wi-Fi Thermostat
Apple TV HD
Complete the webform to enter the drawing. Prize winners will be drawn from all correct submissions on June 15, 2022, and winners notified by email or phone. SECO Energy membership must be active at the time of drawing.
Good luck!
AMI-Investment in Future Cost Savings
Moving into the future and understanding the supply chain and labor issues, the SECO Energy Board of Trustees has approved investing in technology that will save money and improve reliability over time.
SECO is one of a very few large, fast-growing utilities in the state or in the nation for that matter that has not deployed Advanced Metering Infrastructure (or AMI) throughout its service territory. The cooperative is conducting two pilot projects to test the viability of deploying AMI on our system and is preparing to decide on a vendor to deploy the AMI technology that will improve operations and reduce costs in a variety of ways.
Currently, SECO pays contractors to read meters on the more than 220,000 homes and businesses across the seven counties we serve. Because we don’t currently have Advanced Metering Infrastructure in place, many of our processes are manual – and costly.
With AMI, the projected savings are significant savings coming from eliminating the high cost of manually dispatching trucks and contracted employees to read meters every month and from reducing the time and cost it takes to more quickly detect and restore power outages.
Learn more about AMI benefits for you, our members, in the Annual Meeting video posted on our website, Facebook and YouTube. Watch for updates in SECO News and at SECOEnergy.com.
Whether you’re a new member or a longtime member, SECOEnergy.com offers interactive tools for a variety of needs from reliability/expansion project maps to energy-efficiency and solar calculators to the bill payment assistance map and more.
I’m proud to announce the launch of our newest interactive tool that displays when SECO crews and/or contractors are working in your area to improve existing electric facilities and to build new infrastructure to support growth in the residential, commercial and industrial sectors of our service territory. The System Improvement Map displays both Reliability Projects and Expansion Projects built on a platform that allows members to enter their service address and view events occurring in their area that improve reliability and expand the growing electric system. The map also provides a broad view of planned work underway across SECO Energy’s service territory. You’ll find these brand new tools at SECOEnergy.com > Contact Us > System Improvement Map.
RELIABILITY PROJECTS MAP
The first tab on the map is Reliability Projects which includes vegetation management assessments and trimming, facilities inspections, pole replacements, voltage conversions, substation maintenance, area light and underground equipment maintenance and many more projects that improve the quality of electric service. Each reliability project type is represented by an icon. Click on the icon for an explanation of the work, status and project duration dates. The “Additional Info” hyperlink provides more details including possible associated planned outages for crews to work safely.
But it’s more than just an online, interactive map. It is complemented by a communications system that generates emails, text and/or voice notifications to members proactively letting them know about the work scheduled to occur in their vicinity.
The Reliability Map is searchable by clicking the icons to display greater detail about a particular project. Or input your service address in the search bar in the top left corner of the map. Click on your address when it appears and the map zooms to your location. Zoom out using the minus button on the map to view project work boundaries in or near your service address.
EXPANSION PROJECTS MAP
At yearend 2021, SECO’s investment in electric facilities topped $1 billion. Currently, we are investing more than $6 million per month to maintain our current facilities and build new infrastructure to support growth. The Expansion Projects tab on the map displays where these dollars are spent on building new infrastructure. Work types include new substations, new towers for radio communications, substation upgrades and tower/radio upgrades.
You will notice on the Expansion Projects map that five SECO substations are currently undergoing significant upgrades: Astatula (Lake County), Dallas (Sumter/Marion Counties), Gospel Island (Citrus County), Lake Ella (Sumter/Lake County) and Timberwood (Marion County). You can search using your address on this map also or filter by county.
If you have questions about Reliability or Expansion Projects, click the FAQ tab or use the Contact Us tab to drop us a line. We typically respond within two business days. You can also reach out to us using the links to SECO’s Facebook and Twitter platforms. Follow us on social media for cooperative events, promotions, prize drawings and news releases.
SERVICE TERRITORY MAP
As a returning Florida resident, I’ve been shopping for a home in SECO’s service area. Another online, interactive SECO tool that has been a tremendous help to me personally is our Service Territory Map. It helped me determine if a home I was interested in was within the service territory. I’ve even shared the link with my realtor. If you’re relocating and want to live in our service area, visit our Service Territory Map to verify SECO serves the property you’re considering.
FIND BILL PAYMENT ASSISTANCE
Members who need a little help paying their bill will quickly find local social service agencies that have funding specifically allocated for SECO members. Visit SECOEnergy.com > Contact Us > Find Bill Payment Help to locate the map and resources. You’ll find local agencies across the counties we serve that receive funds from our Pennies from Heaven charitable program, along with funding from other resources such as LIHEAP, EHEAP and more. You can search for an agency by county, service address or scroll through the list on the left-hand side of the map. Agency phone numbers, locations and website addresses are listed for easy access to bill payment assistance contacts.
We’re proud of our beginning as a small rural electric cooperative. Over the last 84 years, SECO Energy has become one of the largest and fastest-growing cooperatives in the nation. We’re also an innovative not-for-profit cooperative that is preparing for a challenging future. I hope you give our new interactive tools a try. Read next month’s SECO News to learn more about online energy efficiency tools like the Home Energy Assessment and the Energy Estimator.
Exciting things are happening at SECO Energy, and it is our privilege to provide reliable, affordable, and innovative energy services to our members and communities.
Best regards,
Curtis Wynn
Chief Executive Officer
Contractors TRC, Charter and Lumens/CenturyLink Completing Broadband Projects in SECO’s Service Area
You will likely see three new broadband contractors out and about in your neighborhoods. This is not a SECO Energy project. The three contractors TRC, Charter and Lumens/CenturyLink are using SECO’s existing utility poles to attach broadband communication lines to expand broadband in Central Florida. We collect a rental fee from them and other utilities for attaching to our utility poles.
This work is funded by the $20 billion Federal Communications Commission’s (FCC) Rural Digital Opportunity Fund (RDOF) intended to spread and increase broadband speeds to underserved areas. This massive broadband project will be ongoing for three years.
TRC is working in conjunction with SECO to obtain and process permits for the pole attachments so that Charter and Lumens/CenturyLink can begin the work of adding broadband fiber and cable.
All contractor vehicles display a SECO Authorized Contractor logo and carry company identification. We have a list of authorized SECO contractors online at SECOEnergy.com >Your Co-op > Contractors. If you have questions about RDOF, visit www.RDOF.com.
Power Cost Adjustment
According to the U.S. Energy Information Administration’s (eia.gov) Henry Hub Natural Gas Spot tracker, the price for natural gas has risen from $2.71/MM per BTU in January 2021 to $4.38/MM per BTU in January 2022. This is an almost 62% increase. Unfortunately, it doesn’t appear that the price for natural gas will reduce anytime soon.
The natural gas price peak was $5.51/MM BTU in October 2021 and SECO Energy held its Power Cost Adjustment (PCA) factor stable. With the current volatility of the natural gas market, it is time to make a change. The EIA estimates that the wholesale spot price of natural gas in 2022 will reach an eight-year high. Market unpredictability will affect the cost of power we purchase from our wholesale power producer, Seminole Electric Cooperative and ultimately will reflect on member bills.
As of April 1, 2022, the PCA credit will decrease raising the cost for 1,000 kilowatt hours (kWh) to $128.05. This is a total increase of 5.8%. We will keep you informed of future pricing changes.
Thank a Lineman License Plate
Members can show their support for the thousands of Florida lineworkers and utility personnel who restore power to millions of Floridians after devastating natural disasters by ordering a “Thank a Lineman” license plate. The 2020 Florida Legislature approved the plate after Governor Ron DeSantis signed HB 1135 into law.
This cause is local and benefits a key SECO Energy employee recruitment partner. For every “Thank a Lineman” plate sold, $25 goes to Lake-Sumter State College (LSSC) to support their Electric Utility programs. According to LSSC’s website (www.lssc.edu), the college is ranked in the top 150 Community Colleges nationally. Their student job placement or continuing education rate is 97%. The scholarship boost is an exciting opportunity for LSSC, utility personnel across the state and cooperative members.
Reserve your plate today by purchasing a pre-sale voucher. Purchase avenues vary from county to county. Contact your local county tax collector’s office for guidance or visit myfloridaspecialtyplate.com/lineman-order.html, where you can pay for the pre-sale voucher and process your order online. Learn more at www.thankalineworker.com.
The actual “Thank a Lineman” license plates will be available once the pre-sale threshold is met.
SECO Energy is once again lowering the cost of electric service. The not-for-profit electric cooperative will apply a higher member-favorable Power Cost Adjustment (PCA) to members’ bills beginning October 1, 2020. The PCA calculation appears on monthly statements as a line item titled “Hot Bucks.”
Since January 1, 2020, SECO’s rate for the first 1,000 kilowatt hours (kWh) consumed has been $116.90. The reduction on October 1 will lower the amount by $4.50 per 1,000 kWh to $112.40 or approximately 4%. Between January 1, 2014, and October 1, 2020, the price for $1,000 kWh of electricity has decreased by $15.35 or 12%.
CEO Jim Duncan stated, “Providing affordable electric service is a high priority for a not-for-profit electric cooperative like SECO Energy. Going back to January 2014, the rate for 1,000 kWh was $127.75. We applied several member-favorable PCA adjustments since early 2014 to correspond with fuel cost decreases.”
SECO’s PCA factor fluctuates based on the amount the cooperative pays for power purchased from its wholesale power provider Seminole Electric Cooperative, Inc. SECO works closely with Seminole to ensure the lowest rates possible for members. When the wholesale cost of purchased power decreases, SECO passes those savings along to members.
Duncan added, “Since 2014, there were times when fuel costs rose and SECO adjusted the PCA to reflect the increase. For the most part, the PCA adjustments SECO has made have consistently lowered members’ bills.”
SECO also encourages members to use electricity efficiently and reduce their energy consumption. Visit our Energy Efficiency page to complete the Home Energy Assessment for an online energy audit. Try the Energy Estimator to calculate the energy use and costs associated for everyday electronics, appliances, lighting and more.
“Like” SECO on Facebook and “follow” @SECOEnergy on Twitter for news releases, cooperative updates and for weather information and updates affecting SECO’s service area.
SECO Energy is a not-for-profit electric distribution cooperative serving 210,000 homes and businesses throughout seven Central Florida counties. We take pride in providing service to you, our member-owners, and most-valued Key Accounts. As your advocate, the SECO Energy Key Accounts team would like to inform you in advance of rate changes taking effect on January 1, 2020. We are communicating this to you BEFORE the public announcement to our general membership. We realize that many of you may have completed your budgeting process for the coming year, and we apologize for the untimeliness of this news. Unfortunately, our recent contract renewals with third-party vendors has prompted changes necessary for us to maintain a healthy cooperative and reliable electric service for your businesses.
Our 2020 outlook is a mix of good and bad news. The good news is wholesale power is stable, so we’re able to apply an increased Power Cost Adjustment (PCA), aka Hot Bucks, credit to your bill. Beginning January 1, the PCA will increase from $0.01570 to $0.02070. Wholesale power costs represent approximately 68 percent of your SECO Energy billing. The remainder of your bill is for cooperative operations including maintenance, restoration, construction and upgrades to the electrical distribution system on which you depend for reliable service. This is where the mix of bad news comes in. Our costs to construct and maintain the electrical distribution system are rising by a whopping 25 percent for 2020.
The labor market is very tight and contractors who perform maintenance are paying higher labor costs to keep workers on the payroll. This isn’t just a SECO Energy issue. Nationwide electrical utility contractors are struggling to maintain sufficient workforce. One of the more visible reasons was spurred when California utility PG&E was court ordered to significantly increase system maintenance and tree trimming to reduce fire risk. Florida lost a significant amount of its utility-related contract labor workforce to California and we are paying the price, despite a booming economy.
Our 2020 construction workplan continues to build upon our mission to construct, maintain and restore the electric system. Improvements such as storm hardening and tree trimming improve SECO Energy system reliability. System additions, upgrades and automation enhance the service so that disruptions to you are minimal. We have scheduled improvements throughout our entire service area that will also support and enhance our fast-growing system. A detailed map of key projects is included in the upcoming SECO News.
Another reason for the adjustments to our rates is the trend of declining average energy consumption of both residential and commercial facilities. Energy awareness and efficiency improvements along with new technologies have had an impact on kilowatt hour (kWh) sales. This contributes to the financial challenges facing our not-for-profit electric cooperative. In addition, the most recent cost of service study indicates the cost to serve members has risen. These factors and more necessitate an adjustment. The Residential (RES) customer charge will increase 17 cents per day, General Service (GS) will also increase 17 cents per day and the General Service Demand (GSD) customer charge will increase 50 cents per day. The demand charge associated with the GSD rate will also increase 20 cents per kW and the energy charge will change from $0.08890 to $0.09050 but with the increased Hot Bucks (PCA) credit applied to the bill, your energy costs per kWh will decrease. Our lighting rates will remain the same moving into the new year but will also benefit from a larger PCA credit.
The collective increases will raise SECO Energy’s total revenue approximately 3.5 percent for 2020. All changes as noted will be posted on January 1 in our rate tariffs at SECOEnergy.com and changes ensure parity between rate classes. In the meantime, I have linked to a document summarizing the changes reflected in this communication. If you have questions or are interested in a rate analysis to explore the impact of these changes on your billing, please contact your Key Accounts Consultant. We’re here to help!
The bottom line is that none of us like having to increase the customer charge or other components of your bill, but it is quite necessary to ensure continued service reliability. At the same time, we are pleased that stable fuel costs are allowing a larger Hot Bucks Credit (PCA) credit that will offset most or all of the increases depending on your respective usage level. These changes reflect the difficult balance between affordability and reliability.
For the full story on the 2020 Outlook – Rising Costs and a list and map of key projects, read Duncan’s Digest in the upcoming December SECO News.
The costs of virtually everything required to operate a modern electrical system are increasing rapidly. Our 2020 outlook is a mix of good and bad news. The good news is wholesale power costs are stable, so we’re able to apply a higher, member-favorable Power Cost Adjustment (PCA aka Hot Bucks) credit to your bills starting January 1. The bad news is the customer charge component for both residential and certain commercial members is increasing. The residential increase is 17 cents a day and the commercial customer and demand charge increases vary by rate type.
SECO’s mission is to construct, maintain and restore the electric system. We construct new facilities to meet growth demands. We upgrade and maintain the electric system to prevent outages. When an outage occurs, we restore as quickly as possible. Unfortunately, the costs associated with our three mission-critical focuses are rising at an alarming rate.
The 2020 construction work plan tops $55 million to construct new and upgrade existing infrastructure. Tree trimming, storm hardening and system maintenance work is performed largely by contract labor.
Construction and maintenance costs are rising by a whopping 25 percent in 2020. The job market is tight and contractors who perform system reliability maintenance are paying higher wages to keep workers on their payroll. This isn’t just a Florida utility phenomenon – it’s happening nationwide and was spurred when California utility PG&E was court ordered to significantly beef up their tree trimming and system maintenance programs to reduce fire risk. Florida lost a significant amount of its utility-related contract labor workforce to California and we are paying the price despite a booming economy.
SECO Energy is experiencing systemwide growth. Every part of our service territory requires infrastructure additions, system upgrades, storm hardening, tree trimming or communications improvements whether you live north, south, east or west of our headquarters.
You may be wondering why the financial benefit of customer growth isn’t covering rising costs, and it’s a valid question. The answer lies in the low average residential member’s energy consumption. In our service area, the average kilowatt hour (kWh) monthly consumption today is 1,037. This average consumption is much lower than our cooperative peers due to the growing Central Florida trend of energy efficient homes and businesses, use of natural gas appliances, and a strong increase in solar installations. Low energy consumption equals a lower monthly bill – that is good for our members. Less energy consumption and use of solar are also good for the environment. So, what’s the downside?
There are significant financial challenges to low kWh sales, even for a not-for-profit electric provider in a growth environment. We must adjust the monthly customer charge that is collected to cover the costs associated with the delivery of power and system reliability maintenance.
A recent cost of service study indicates that the cost of delivering power and maintaining infrastructure in the residential sector is nearly $35 a month. Currently, we apply an average residential customer charge of $25 a month (83 cents a day). We are bridging that gap by increasing this customer charge by 17 cents a day. Commercial account customer and demand charge increases vary based on the cost of service study. Those adjustments are detailed in our rate tariff online. These collective increases will raise total revenue by about 3.5 percent.
We have tightened our corporate belts to carefully monitor controllable expenses while striving to maintain system reliability, but as I mentioned previously and as you can see on the 2020 Project Map, new construction, upgrades and maintenance are required across our entire service territory.
In response to growth and to preserve reliability, we must build new substations, add power transformers at existing substations, upgrade voltage and conductor and convert critical overhead facilities to underground. The work plan includes building new communication towers, upgrading our radio system and installing fiber-optic cable and microwave backhaul for automated communications that facilitate faster outage restoration. To storm harden, we must support an aggressive pole replacement and vegetation management program systemwide. All of these components play critical roles in the delivery of reliable power and speedy restoration in the event of an outage.
The bottom line is that none of us like having to increase the customer charge, but it is quite necessary to ensure continued service reliability. At the same time, we are pleased that stable fuel costs are allowing a larger Hot Bucks Credit (PCA) that will offset most or all of the increase depending on your respective usage level. These changes reflect the difficult balance between affordability and reliability.
Sincerely,
Jim Duncan
Chief Executive Officer
Each year, SECO Energy employees participate in an employee-funded United Way Pledge Drive. Our employees understand that local community support is needed year-round and not only during the Christmas season.
The 2020 United Way Pledge Drive was an amazing success. SECO employees pledged $70,316 to United Way agencies in ten local counties. This total increased almost seven percent over 2019.
Citrus, Lake, Marion and Sumter Counties are where the bulk of our employees live and received the highest dollar amounts in donations. The breakdown by county is:
Join us in United Way’s mission to improve lives by mobilizing the caring power of communities to advance the common good. To donate or volunteer, visit United Way online.
Kathy Judkins – Senior Consultant for Civic, Charitable & Government Relations
Length of Service: 12 Years
“SECO IS COMMUNITY FOCUSED.” Kathy Judkins, Sr. Consultant for Civic, Charitable & Government Relations is a fourth-generation Floridian residing in Marion County. Her role with SECO Energy focuses on the cooperative principle of Concern for Community. Kathy manages annual SECO employee-giving campaigns and is excited that SECO is nearing the $1 million United Way contribution mark in the coming year. Kathy is honored to give hope to members in our service territory through SECO employee contributions to United Way. She also manages the Toys for Tots campaign companywide and is proud of SECO employees’ efforts to bring joy to children in our service territory on Christmas. Kathy also develops relationships with State Legislators and U.S. Congress members in Washington, D.C., to engage on issues related to the energy industry that could affect SECO’s ability to provide affordable, reliable service to our members.
SECO Energy and our employees are long-time sponsors of Relay For Life events that support the American Cancer Society. Our superhero employees participated in the Sumter County Relay For Life event on Saturday, November 2. The SECO team’s theme was “Superheroes Finish The Fight.”
In 2019, SECO raised $25,655 for the American Cancer Society to support cancer research, patients and caregivers and to fight for a cure.
Learn more about Relay For Life or donate to the American Cancer Society online.
SECO Energy and our employees are Making A Difference at Christmas by donating toys for local children through our Annual Marine Toys for Tots collection drive. Members also joined in the gift-giving by adding new, unwrapped toys in the donation boxes at our five Member Service Centers.
Toys donated through Toys for Tots are delivered to local children. The donated toys remain in our local communities. For many children, toys donated by our generous employees and members will be the only gifts under the Christmas tree.
SECO employees rallied to pack Santa’s sleigh by donating over 60 bicycles and tricycles for local children, along with hundreds of other gifts. New this year, SECO’s member-funded Pennies from Heaven program matched this number with additional bike purchases. It’s clear that our employees enjoy playing Santa for local children through Toys for Tots.
Thank you to our generous employees and members who are willing to share their Christmas joy and spirit with others. Making A Difference at Christmas brings happiness to children across our area.
December is the month of giving, goodwill and cheer. Keep the Christmas spirit alive in the new year by joining SECO Energy’s Pennies from Heaven program. By joining Pennies from Heaven, SECO rounds up your bill to the nearest dollar and donates those pennies to charitable causes in the communities we serve.
The small change donated through Pennies from Heaven supports financial assistance to worthy causes in our service area. Requests for Angel Fund bill payment assistance are administered through several area agencies by calling 211 or visiting 211 online.
This year, we are excited to announce that Pennies from Heaven will purchase bicycles and tricycles to match the number donated by SECO employees! Thus far, employees donated over 60 bikes and trikes and SECO will double the amount. This means hundreds of local children will get their Christmas wish of a new bike courtesy of SECO employees and SECO members who donate to Pennies from Heaven.
Enroll in Pennies from Heaven to put your extra pennies to good use in charitable causes in our communities. Just a few cents every month can change lives. Learn more about the program or enroll online.
Eight times since 2014, I’ve had the pleasure of sharing the news that SECO Energy’s wholesale power costs have decreased, thus lowering your bills. This wholesale cost stability has allowed SECO to apply a Power Cost Adjustment (PCA) – aka “Hot Bucks” – as a line item on your bill. SECO’s Board of Trustees recently approved a larger PCA credit – which lowers the cost of energy. Effective September 1, this reduction marks the ninth time in four years that SECO has applied a PCA that lowered members’ bills based on wholesale power cost.
THE DOWNSIDE
While wholesale costs remain stable, costs associated with maintaining the distribution infrastructure and actual power delivery continue to rise. These are represented by a line item on your bill titled “customer charge.” Residential members are currently charged $20.00 a month. Beginning September 1, that charge will be calculated on a daily basis rather than monthly to more accurately reflect the cost of providing service based on the number of days in your billing cycle. At the new cost of 83 cents a day, the customer charge equates to $24.90 for a 30-day billing cycle. The increase is less than 18 cents a day, and is also offset by the PCA credit I mentioned earlier.
THE WHY
Following the principles of prudent financial management, SECO conducts periodic cost studies to ensure proper alignment with our rates. Per our recent cost-of-service study, there are a variety of factors leading to the shift in greater reliance on the customer charge component of our overall rate. Delivering power that is affordable, safe and reliable to more than 200,000 families and businesses in Central Florida requires a well-maintained electric infrastructure and a vegetation management program that reduces tree-related outages before, during and after storms. These programs and storm hardening activities supporting an $855 million electric system come with a hefty price tag.
Storm hardening includes our pole inspection and replacement program and equipment upgrades/replacements in aging areas. The 2018 budget for upgrading existing infrastructure and constructing new facilities to meet growing power demand reached $45 million. In addition, SECO’s annual tree trimming costs have risen from $8 million to $10 million. The investment, in turn, has paid off by reducing tree-related outages by 50 percent over the last decade.
To maintain the high standard of customer service you expect and deserve, SECO does not outsource to other countries for cheap labor. Our Member Service Centers and Call Center are staffed with local employees dedicated to top-notch service allowing for these SECO investments to be retained in local communities.
Investments in new technology such as the new outage reporting, and communications platforms (StormCenter) add to the overall costs. SECO also absorbs the expense of convenience fees for debit/credit card payments in order to facilitate easier ways to pay for our members. With more members embracing these payment types by phone or online, that portion of SECO’s cost is rising faster than the savings from reduced Member Service Center traffic.
Speaking of storms, the total costs associated with the damage and recovery from Hurricane Irma topped $27.5 million. Hundreds of out-of-state contract crews worked for nearly a week at breakneck speed to restore power to the 139,000 members – almost 70 percent of our system – who lost power as Irma came directly through our area last September. Though FEMA reimburses cooperatives for a good portion of named storm costs, the percentage fluctuates and the process is slow, leaving SECO with carrying costs of that financial burden.
THE BILL
These factors along with cost-of-service study calculations and changing market projections are clear indicators of a customer charge increase which SECO’s Board of Trustees approved. I share the Board’s opinion that the daily calculation is a more accurate recovery of the true cost of providing residential service – regardless of usage. A sample bill is provided for you to recognize these line item adjustments when you receive your bill.
Though total operating expenses increased by nearly $6 million from 2016 to 2017, I can wholeheartedly assure you that SECO is fiscally sound and healthy. We continue to operate responsibly in the interest of high-quality service. Growth continues at a manageable pace, our equity position remains in line with loan covenants and we continue to retire Capital Credits to members annually. You’ll find a testament to this financial health on our website in our 2017 Annual Report.
For more information on the Hot Bucks and Customer Charge adjustments, view our newly produced “Hot Bucks & Customer Charge” video on our YouTube channel.
I realize the news I’ve shared is mixed but assure you our responses to changing financial conditions are appropriate and necessary. Thank you for the opportunity to serve your family’s energy needs.
Sincerely,
Jim Duncan
Chief Executive Officer
SOLAR SOLUTIONS
Considering an investment in solar power generation? Do you have questions about solar generation but are finding few answers? Our Energy Services Specialists can help.
Before committing to purchase a solar system, contact SECO first. A trained Energy Services Specialist will visit your home to determine its conduciveness to solar. Our Specialist will review your historical energy consumption which can help you determine your desired solar system size, and provide an overview of SECO’s interconnection agreement, timeline and process.
SECO facilities including substations, transformers, lines, poles, meters and peak time power supply still serve solar-producing members when the sun isn’t shining… at night, on cloudy days, during Florida’s daily summer thunderstorms and on cold winter mornings before sunrise.
Additionally, solar systems don’t typically provide your home with power during an outage. Solar systems are installed with an automatic shut-off that activates during power outages. This is a safety feature to prevent a member’s system from generating energy and backfeeding energy to the grid and injuring utility workers. There is an exception to this rule – solar systems that include battery back-up or high-tech inverters may operate during a power outage.
LOG IN & WIN!
LOG IN TODAY FOR YOUR CHANCE TO WIN A $500 BILL CREDIT OR AN IPAD AIR
According to the National Hurricane Center, September is traditionally the peak month for tropical storm and hurricane activity in the Atlantic. Don’t get left in the dark! Update your contact information today for the chance to win a $500 SECO bill credit or an iPad Air.
First Chance to Win:
SMARTHUB – BILLING/PAYMENT CONTACT INFO
Earn an entry into the drawing for a $500 SECO bill credit or iPad Air by establishing an online account or login to an existing online account – called SmartHub. Once you’ve logged in, verify that SECO has your current email address and phone numbers associated with billing/payment. SmartHub is also available as an app for your smartphone or tablet. Search for SmartHub in your mobile device’s app store and follow the instructions to download.
Second Chance to Win:
STORMCENTER – OUTAGE NOTIFICATION CONTACT INFO
As an added bonus, earn a second entry in the drawing by updating your contact information associated with outage communication. From our home page, click on StormCenter and choose “Manage Notifications.” Use your account number and zip code to update preferred outage communication delivery methods – email, text and/or voice notifications.
Simply logging into these two tools enters you in the drawing twice. Do so by September 15 for a chance to win a $500 bill credit or an iPad Air. Good luck!
From the torch, to the oil lamp, to the Edison incandescent, to the CFL and LED, lighting has changed dramatically with the times. To “let there be light” today, SECO Energy must also change with the advancements of our industry. We must control costs and provide a high level of customer service. That’s what you expect and deserve, and we stand ready to fulfill your energy needs.
With our 2016 Annual Report and audit complete, I am proud and humbled to share strong fiscal results. Staying ahead of growing power demand is a challenge that is capital and expense intensive. It is a delicate balance of design, construction, maintenance and vegetation management.
Illuminating your homes and powering your appliances and electronics is a 24/7 responsibility. “Storm Ready” is SECO’s motto when Hurricane Season converges on The Sunshine State on June 1. If a storm blows through and on the rare occasion when the lights go out, you can bet that our crews and contractors are staged and on the move to restore power the moment it’s safe. Our Emergency Restoration Plan and investments in storm preparation ensure that you will not go without power for an extended period of time.
Our dedication to you over the last decade of service improvements has manifested in SECO Energy earning two consecutive J.D. Power awards for highest customer satisfaction in the nation in our segment. The cooperative’s ACSI score improved in 2016 to 89 – an outstanding rating, especially when compared to investor-owned and municipal utilities.
What distinguishes SECO from other providers is called the cooperative difference, and is made possible by our Board of Trustees’ governance, our executive team’s leadership and, most important, the dedication and hard work of the 400+ SECO Energy employees. Learn more in the online version of the 2016 Annual Report.
Thank you, members, for rating SECO so highly and for your loyal patronage. We are humbled and privileged to serve as your Central Florida energy provider.
Jim Duncan
Chief Executive Officer
Surge Protection: Protect your Appliances and Win
With Atlantic Hurricane Season in full swing, are your large appliances protected from harmful power surges? Would you like a chance to win a $300 bill credit? Read on to learn more about SECO’s surge protection program and a chance to win.
During the month of June, The Old Farmer’s Almanac predicts daily thunderstorms with an above average rainfall. That means Florida’s daily afternoon thunderstorms will likely bring large amounts of rain, high winds and damaging lightning.
In addition, birds, small animals, falling trees or vehicles crashing into SECO power poles can cause power surges. Power surges are sudden, powerful increases in voltage that can damage or destroy household appliances and other electronic devices in your home.
SECO’s surge protection is proudly “Made in the USA” and helps you protect large appliances from damaging power surges. A certified SECO contractor will install the meter base surge arrester behind your electric meter, no appointment needed. Members can lease the surge protection for $5.95 a month with a $25 installation fee, or purchase the product for $349 with installation included. The meter base arrester is just the first step to complete protection. Members should also purchase “point of use” devices from their local home improvement or hardware store to protect sensitive electronic equipment such as televisions, computers, cordless phones and more.
All members enrolled in SECO’s surge protection program will be entered into a random drawing for a $300 bill credit. Enroll by August 15 for your chance to win. Members who currently have surge protection are already entered into the drawing.
Natural gas consumption in the power sector has risen 25% in recent years. The U.S. Energy Information Administration forecast that natural gas prices will rise about 20% in 2017. That prediction is beginning to play out.
The overall natural gas price outlook for Q3-Q4 2017 and NYMEX futures prices indicate that rock bottom gas prices under $3/MMBtu are over. Utilities across The Sunshine State are filing for rate increases as a result.
SECO Energy members have benefitted from three years of steadily declining power costs – a decrease of about 12 percent during that timeframe. But now we must respond to the changing fuel market trends.
As a result, SECO must adjust the PCA – Power Cost Adjustment – component of your bill. Rather than paying $112.60 for 1,000 kilowatt hours, members will begin paying $114.90 for that same average usage beginning July 1 as approved by the Board of Trustees.
The SECO increase is $2.30 per 1,000 kWh. Comparatively, Duke Energy’s increase that took effect in January was $4.39 per 1,000 kWh, and Florida Power & Light’s was $7.00 – reflections of the changing market.
Learn more about SECO Energy’s financial stability in the 2016 Annual Report.
SECO Energy has lowered the cost of energy again! As of October 1, the price for the first 1,000 kWh – average residential energy consumption in SECO’s area – has been reduced another dollar to $112.60.
Since January 2014, our cooperative has reduced the cost of energy nine times. In less than three years, SECO has lowered members’ bills by almost 12%. This latest reduction means that SECO members pay one of the lowest rates for energy in Central Florida (and per J.D. Power, our members receive the best service in the nation).
The decrease is formally called a Power Cost Adjustment or PCA – but our members know it better as “Hot Bucks.” The PCA is a line item component on your bill representing positive reductions in our cost of power. As a not-for-profit electric cooperative and a two-time J.D. Power Customer Satisfaction winner, SECO’s dedication to its members is clear. SECO is committed to providing members with low rates, reliable electric service and excellent customer service.
Be sure to look for the latest reduction on your October bill, as your Board of Trustees (your fellow members who govern your cooperative) approved the reduction in their September meeting.
What it takes to be a JDP Winner
SECO Energy earned its second J.D. Power award in 2016 – ranked “Highest in Customer Satisfaction among Cooperatives.” J.D. Power examines the six factors, highlighted below, that explain SECO’s success.
Corporate Citizenship
As a not-for-profit electric cooperative, SECO has deep roots in the communities we serve. SECO Energy and its members team up through our Pennies from Heaven Program that rounds members’ bills up to the nearest dollar. The funds collected support area social service agencies to provide financial assistance for members in need. SECO’s scholarship program awards 12 deserving high school seniors in our service area a $3,000 scholarship to an accredited college, trade or technical school. SECO’s scholarship program has awarded over $500,000 to local students over the last 20 years.
Billing & Payment
SECO Energy offers a variety of convenient ways to pay your bill – without convenience fees. Members can pay online via SmartHub (SECO’s account management system), pay by bank draft, by mail or by phone. Members can pay in person at one of our five member service center locations – some include kiosks available 24/7. Another option is SECO’s MyWay PrePay program – members pay for their daily energy before usage. MyWay PrePay is perfect for members on a budget who closely track their usage and expenses.
Communications
SECO Energy’s Communications score is highest in the nation in our segment according to J.D.Power’s 2016 Customer Satisfaction Study. In February, SECO launched a brand-new website with a user-friendly platform that performs on a variety of mobile devices and browsers. SECO members also interact online with the cooperative through Facebook and Twitter. Members are reporting service interruptions online using their smart phones/tablets through our Storm Center application. Your monthly SECO News publication has been enhanced to be more informative and dynamic as well.
Customer Service
At SECO Energy, our customer service team is the best of the best. In fact, SECO is ranked “Highest in Customer Satisfaction” among electric cooperatives across the nation. The SECO Team is staffed with employees who live locally in the communities we serve. Phone calls to SECO are answered by a local employee. These calls are not outsourced. Members can engage with a local associate – to pay a bill, ask a question or voice a concern – in one of our five convenient locations. Or you can contact us online at your convenience.
Price
SECO Energy continues to lower energy costs – nine times in less than three years. Our cost per kilowatt hour is one of the lowest in Central Florida. SECO members also benefit from our Capital Credits program. Through sound financial stewardship, SECO has returned (retired) Capital Credits to members for years. Since inception, SECO has returned over $47.3 million to current and former members. Watch your November bill and SECO News for more information.
Power Quality & Reliability
SECO Energy is the third largest co-op in Florida and the sixth largest nationally. We serve almost 200,000 members across seven Central Florida counties over 2,000 square miles. SECO maintains, inspects and upgrades 12,000 miles of power lines to provide reliable power to members. To increase reliability, SECO has honed a comprehensive vegetation management program, and has been recognized as a Tree Line USA utility by the National Arbor Day Foundation for nine years in a row. SECO continues to expand to meet the growing power demand.
Energy Efficiency Tips – Insulation Investment Pays Off
Homes with the proper level of attic insulation provide reduced energy costs and increase your comfort level year-round. Upgrading attic insulation is one of the best energy efficiency investments – paying dividends year after year.
Attic insulation works to slow the movement of heat, reducing the HVAC system workload. Insufficient insulation causes the HVAC to work harder to cool or heat the home. It also causes the HVAC to run less efficiently and increase energy bills over time. Fiberglass batting is a pre-formed material sized to fit between ceiling joists and should be trimmed to rest snugly against any obstructions such as electrical wiring and air-conditioning ductwork. This makes fiberglass batting somewhat difficult to install as an upgrade.
Loose-fill fiberglass insulation is fed into a machine that loosens and propels the material through a hose allowing the installer to place a uniform blanket throughout the attic.
Loose-fill cellulose, like loose-fill fiberglass, is blown into attic spaces through special hoses. It can settle over time – you may need to install extra to account for settling. When upgrading attic insulation, make sure any recessed lighting is approved to be in direct contact with insulation. For more energy-saving ideas, check out the Energy Solutions section of our website.
Facebook Contest
Want to win a $500 bill credit? “Like” SECO Energy on Facebook today. All members who “like” SECO Energy’s Facebook page by November 30 will automatically be entered into a random drawing to win the $500 bill credit.
Expressions
Recently, members recognized the SECO Team and our hard work. The restoration effort after Hurricane Hermine was truly a team effort and was accomplished within 24 hours of the storm. The SECO Team of employees is the best of the best and our members continue to show us their appreciation on Facebook!
Thomas House – Just want to thank each and every one of you for your tireless devotion to ensuring that everyone had their power back on. You did a great job in horrible weather. Bless you all!!!
Barbara Maurer Chadwick – Love being a member of this electric cooperative! It’s so reliable, and who wouldn’t love getting money back every year, and “Hot Bucks” back every month!
Howard Shehan – You guys and gals are the best. I tip my hat to all of you. Stay safe out there.
Bart Walker – Well done and the tree trimming mitigation over the last few years really paid off. We used to lose power a lot, the lights barely blinked this time around, great job!
Dear Members,
In alignment with Seminole’s projections, SECO’s Board of Trustees approved changing the PCA to lower our members’ bills. Both SECO and Seminole are not-for-profit cooperatives that work closely to ensure the lowest rates possible for our members. When the wholesale cost of purchased power decreases, SECO passes those savings along to you.
