Average local electricity bill to increase more than $10 per month

If you haven’t already received your notice in the mail that Pedernales Electric plans to raise its rates, mainly because of costs incurred from the winter storm earlier this year, expect it to arrive any day now.

In the notice, dated Aug. 25, Pedernales is informing its customers the average monthly electricity bill will increase $8.75 a month temporarily to pay for repayment of debts it incurred because of the storm and another $1.60 a month, probably permanently, to pay for what the cooperative says is the result of increased construction costs.

It also said it will not be spending any money on infrastructure to improve the delivery of electricity to customers, at least until this debt is repaid.

The co-op promised the $8.75 average increase, which will be labeled on customers’ bills as a “Temporary Storm Surcharge,” will remain in place for two years beginning Oct. 1. Each customer’s actual bill will increase $.007 per kilowatt hour used per month.

In the letter, the company said it “incurred unexpected and significant costs during the winter storm to procure power, repair equipment and infrastructure, and restore power to the Texas Hill Country — costs which totaled approximately $160 million.” The letter says the co-op’s “favorable credit rating” allowed it to borrow money “at low rates,” but that now, to maintain that credit rating, “the rating agency is requiring PEC to pay off the winter storm debt in three years.” 

“To maintain its credit rating, PEC is deferring or eliminating certain capital gains expenditures and expenses, and will continue to do so as long as the electrical system remains reliable and safe,” the PEC said in its unsigned letter. “Unfortunately, cost-saving efforts alone cannot pay off the storm debt within three years.”

The monthly increase from $.027120 per kilowatt hour to $.028405 per kilowatt hour will also become effective Oct. 1

“Construction costs have greatly increased over the last two years, and growth within our service area is driving up demand,” PEC said in explaining the rate hike. “Consequently, the cost of maintaining and operating our more than 23,500 miles of distribution line, which supplies power to over 1 million Texans, has increased.”