WCEC’s Winter Storm Uri Cost Damage Is Over $37 Million 
During the unprecedented February 2021 winter storm Uri, our cooperative was luckier than most Texas electricity providers, in that we did not have significant long-term outages or physical damages to our system. Unfortunately, like most of them, our members will be paying for devastating storm-associated costs for months and possibly years. 
 
In February, we communicated to you that there would be cost impacts, and as we learned more we would inform you. We regret to say, these costs have far exceeded what we and all others in the industry could have imagined. WCEC’s total power cost for the month of February alone was $37.2 million. Our budget for that month for power cost was $3.8 million. 
 
What Happened? The severe cold weather from the storm caused surging demand for power, gas supply shortages, operational challenges for generators, widespread power outages, and a disruption to the wholesale and retail energy markets. Because of this, WCEC’s Generation and Transmission providers (G&Ts), our non-profit wholesale power suppliers, were required to purchase power during the storm at significantly escalated and unforeseen prices.  
 
Budget VS Actual
To give you an idea of the February price extremes that affected WCEC, based on historical use data, WCEC had budgeted $3.8 million for power cost. Our actual power bills we received were over 9.7 times higher at $37.2 million. Unfortunately, this elevated cost will have an impact on the cooperative, and our members, for an extended time. 
What This Means For WCEC Members and Their Bills 
As a non-profit we remain focused on minimizing impacts to the members we serve. WCEC’s tariff provides for a Power Cost Recover Factor1 (PCRF) for the recovery of incurred purchased power expenses. Given the significant impact of the February costs, and to mitigate the impact on WCEC members, the Cooperative anticipates spreading costs over an extended period of time through the PCRF until the cost is recovered.  
 
On May 1, the PCRF will be adjusted from .035 per kWh to .036 per kWh. The new PCRF change will equate to a $1.00 increase per 1,000 kWh. With this adjustment along with normal budget adjustments, total PCRF changes in 2021 equate to an increase of $16.00 per 1,000 kWh. 
 
Further incremental adjustments are pending2 and will be made as necessary based on finalized cost amounts and a board approved deferment period. These will allow us to spread the extraordinary fuel costs of Winter Storm Uri in a way that stretches out the financial burden over time to lessen the impact on the cooperative and on each member. 
 
While it is no consolation, our costs could have been much higher. While extraordinary, the Southwest Power Pool’s (where WCEC buys power for all but one meter) February 2021 costs remained far below ERCOT costs, which other utilities are facing. We are grateful for that.
 
WCEC Purchased Power 
WCEC, fortunately is a member of, and buys its power through the two non-profit G&Ts – East Texas Electric Cooperative, and Northeast Texas Electric Cooperatives. Both organizations, along with their other east Texas electric distribution cooperative members, are working to help us minimize the financial impacts. Currently the G&Ts are  investigating long-term financing options to pay the exorbitant bills on our behalf.
 
What WCEC Members Can Expect Next 
This event has shaken the entire industry, and the effects of it will be around for some time in elevated costs. We are not alone. As has been reported in the news, electric utilities including municipally owned and investor owned, are facing the same large financial burdens. This is not something that was avoidable by the cooperative, our G&Ts, or other utilities in Texas. It is an extremely complex issue. 
 
Since the storm, alongside other cooperatives and our statewide association, we have been working with lawmakers to address the issues that were brought to light by this storm. At this time the only sign of potential relief has come from legislation introduced by Senator Bryan Hughes. This legislative session is not over and we continue to hope, and work toward, some sort of price adjustment. 
 
 In Summary 
At the end of the day, the bill is owed, and this is what necessitates this PCRF change. Please know, we will continue to work on this daily alongside our industry partners. As we know more, we will communicate it.  
  
     Footnotes

1. The Power Cost Recovery Factor (PCRF) 
WCEC Members have fixed rates. A base power cost is built into all our rates to help us recover the cost of power that fluctuates on the open market. As wholesale costs rise above the base power cost, the PCRF is used to recover those costs. The main advantage of a responsive PCRF is that as fuel prices rise and fall, it can be adjusted upward or downward. The PCRF is multiplied by the number of kWh’s a meter uses per billing cycle. 
 
This recent PCRF change is driven by what it cost to buy power during the unprecedented weather event, and is passed through to the members. As a non-profit electric cooperative, WCEC does not mark-up power costs or make a profit from these costs.  
  
2. Adjustments Are Projected 
At this time estimates are preliminary and based on currently available information. The full financial impact remains uncertain as it is subject to proposed regulatory changes including potential repricing, finalizing meter and settlement data, and other factors. As the complexities unfold, WCEC costs could be revised. 
WHAT MEMBERS CAN DO NOW
The PCRF tracks with kWh use. Therefore, reducing consumption through conservation measures is one way to lessen the impacts of the PCRF increase. 

Another immediate recourse is for a member to change the way they pay their bill to an option that best meets their own budgeting schedule. This can be done by moving to a different billing cycle to the first, middle or last of the month, by choosing levelized billing, or by selecting SmartPower. To discuss any of these options, call a member service representative during cooperative business hours (M-F from 8:00 a.m. to 5:00 p.m.) at 903-763-2203. For more details:

Billing Cycles - WCEC has 8 billing cycles each month, and those members that are current on their bills can choose a new cycle with the best timing to help them better pay their bills. For example, if your paycheck arrives at the end of the month, you can move your billings cycle to better accommodate that.
 
Levelized Billing - This is a way for members to even out payments to avoid billing peaks and budget better. When you sign up for Levelized Billing, you’ll be billed the average amount over your previous twelve-month history. Payments are made automatically from your bank account and they will be close to the same amount each month, so it’s easier to budget. Anyone who has been a co-op member for at least a year and has a zero current balance is eligible for the plan.
 
SmartPower - With this prepay system, there are no deposits, no big monthly bills and no late fees. In fact, if we are holding a deposit, it can be returned to members that chose this option. Members simply add credit to their account when it’s convenient, and they can do it 24/7 via the website, the bill pay App or by telephone. Once an account is established and has a credit balance, energy use is recorded. Charges are deducted daily from the credit balance. As the balance lowers, a member makes additional payments to ensure credit remains to keep the power connected. Members are in full control of the process.

In conventional billing, members receive bills long after they have used the electricity and can be surprised by a big bill. Sometimes, it can be a struggle to pay, especially during peak months. With SmartPower, there are never any surprises. SmartPower users can make daily, weekly or bi-weekly payments, and select purchase times that suit their own schedules and finances. Another advantage is prepay members save about 15% to 20% on their monthly bills because they remain more aware of electricity use as they are using it.

Income Based Help - There are government and charitable organizations in our region that offer assistance with utility bills, if their conditions are met. We encourage members to contact them to determine resources that may be available. We have a list at wcec.org, or just dial 211 for the Texas Health and Human Services Department for help with eligibility.
Energy Efficiency Tip of the Month
Save With the Energy Star Sales Tax Holiday
Every year around Memorial Day in Texas, certain Energy star-certified products are tax-free to encourage consumers to save more energy at home.
 
This year’s Energy star sales tax holiday runs May 29–31. in addition to shopping in stores, you can buy qualifying Energy star products online or by phone, mail or any other means tax-free. Items must be both delivered to and paid for by the customer during the exemption period or at least ordered and paid for during that period for immediate shipment, even if delivery is made after the period ends.

Qualifying products:
  • Air conditioners (with a sales price of $6,000 or less)
  • Refrigerators (with a sales price of $2,000 or less)
  • Ceiling fans
  • Lightbulbs
  • Washing Machines
  • Dishwashers
  • Dehumidifiers
  • Some programmable thermostats