A hike in some residential electricity bills for January was not due to a rate raise or a billing error. Instead, it was because the co-op underestimated December's electricity usage; the additional costs were added to January's bills. And it all started with a glitch in the co-op's automatic meter read system.
Last month, some residents of Dillingham and Aleknagik noticed a significant hike in their electricity bills for January. This is, in part, because Nushagak Cooperative's meter read system stopped working on Dec. 13, days before the next billing cycle began.
"We have an automatic meter read system, and we lost ability to read data on that system for a short period of time," CEO Bob Himschoot explained.
The meters that monitor electricity use are read on the 15th of each month, and the co-op was not able to fix the system in time to get an exact number for December's bills. So Himschoot estimated the meter reads for that month.
Himschoot did so based on historic information for that time of year. He averaged the three preceding months. Then he added six percent of that amount to account for seasonal variance – the colder, darker conditions that cause people to use more electricity in December and January. That percentage was determined by looking at that month's rate over the past three years.
But Himschoot said that higher rates of electricity usage this December brought the actual seasonal variability closer to 10 percent.
"Our only cold spell this winter actually happened across those time periods. So between the two, it made the December estimation an underestimation of the actual bills, and then you had a heavy January bill on top of that," he said.
That estimation proved lower than the actual electricity usage for December. In order to balance the books, the co-op added the extra cost to January's bill. That, plus higher residential electricity use in January, meant that some customers saw their bills skyrocket. But although no one was charged for electricity they didn't use, the hike confused and worried many residents.
"There was concern about a rate increase that wasn't there. There was concerns about household budgets, and I fully understand those concerns," Himschoot said.
Another question was whether a higher January bill would impact Power Cost Equalization funding. The state's PCE Fund is aimed at providing economic assistance to consumers in rural parts of Alaska, where electricity prices can be significantly higher than in more urban areas. Residents are eligible up to the first 500 kilowatt-hours they use each month. According to Himschoot, the irregular billing did not impact that funding for residents.
"We also made sure that PCE was not affected. That everybody that did not use at least 500 kilowatt hours, and that had the potential to be harmed by the lack of PCE was credited," he said.
Since the lapse in December, the automatic meter reading system has been working normally, and the co-op does not foresee similar billing issues in the coming months.
Nushagak Co-op serves Aleknagik, Clark’s Point, Dillingham, Ekuk, Manokotak and Portage Creek.
Contact the author at isabelle@kdlg.org or 907-842-2200.
