What influences the price of electricity and why rates are increasing.

                Frequently Asked Questions (FAQ)

Why are electric rates going up?

Rates are going up because the cost of producing electricity is going up. Your electricity is produced by using a mix of fuels and technologies:

The cost of producing power from the following sources is increasing.

In addition, the cost of meeting environmental requirements continues to rise.


What factors make up the wholesale cost of electricity?




With other energy prices dropping, why are electric rates going up?

The recent increases have come from the generation level.

Coal is the most economical method to generate affordable power, so it is used to generate the largest portion of power. The price of coal has increased as well as the price to transport by rail. Our power supplier has also budgeted several million additional dollars for natural gas generation. While in the short term, natural gas prices have declined, its pricing still remains very volatile. Historically, in peak usage periods natural gas prices increase.

How do rates at Howell-Oregon Electric Cooperative compare to other areas?

See graph for rate comparison.......
Sources: Electric Information Administration and the Arkansas Public Service Commission.
Rates based on average revenue per kilowatt hour, including cents per kilowatt hour, service availability fees, 
fuel adjustment charges, taxes and other fixed expenses.

Isn't this a bad time for rate increases when the economy is in a slump?

We understand the economy has placed a significant hardship on many cooperative members. However, the costs for generating electricity continue to increase. As a cooperative, we must ensure that our rates are adequate to cover current expenses and that we are planning to meet our members' demand for power.

What is being done to keep electric rates down?

Associated Electric Cooperative and Howell-Oregon Electric Cooperative know that the ultimate costs are paid by out members.  As Cooperatives we do not have investors to pay dividends to making our sole purpose keeping costs as low as possible for members.

Aggressive measures have been taken with the Take Control and Save program. Each measure, such as rebates and energy audits have been carefully scrutinized to ensure that members will gain in efficiency which in turn creates less demand for more expensive generation.

Where are rates headed in the future?

Unfortunately, we are in a period of rising costs, the following factors have caused the upward trend.

Will there be more rate increases?

It is very likely. The following factors are concerns for continued upward pressures on electric rates.

Why aren't you relying on wind and other renewable sources instead of coal and natural gas?

In 2008, 11 percent of the cooperatives' power supply was provided by renewable sources including wind and water. Associated is buying all power produced from three wind farms in the state, with a fourth farm to be under construction in the summer of 2009. Also, power produced from federal dams in Missouri, Arkansas and Oklahoma have provided a part of the 11 percent of renewable power.

Electricity produced by wind turbines actually costs more than electricity generated by
the cooperatives' coal plants. Wind turbines also only produce electricity about 30% of the time, so wind cannot supply round-the-clock power members demand.

What is being done to reduce emissions from burning coal?

Since 1994, Associated Electric Cooperative, has invested $1 billion to reduce emissions from its coal plants. Associated will invest an estimated $1.45 billion more during the next 10 years to install scrubbers at New Madrid and Thomas Hill power plants.  The total reduction of sulfur dioxide to 99%.

In addition, Associated and partners are researching the possibility of carbon capture and storage. Missouri utilities and the U.S. Department of Energy are working on the feasibility of capturing carbon dioxide in a saline aquifer underlying most of Missouri.

If water is a source of renewable power, why aren't more dams being built?

Locations for building dams are very limited. Missouri has a number of federally operated reservoirs that supply power to the electric cooperatives through the Southwestern Power Administration. Adding hydro-power dams is constrained by a lengthly permitting process and potential environmental impacts. It is also unfortunate that power generated by the dams currently in operation does not qualify to meet renewable requirements in legislation that is under consideration.

What can I do to reduce my electric bill?

The best way to reduce your electric bill is to be aware what is using power in your home and make strides to use less. The energy efficiency program adopted by your cooperative, Take Control and Save, is designed to help members take control of their energy use.

My electric bill is just too high, and I may not be able to pay it. What can you do for me?

There is a lot you can do to reduce your energy use. Our Take Control and Save program can help. The goal of the program is to help members take control of their energy use in order to find ways to cut energy consumption.

Also, you can make your voice heard about rising costs by visiting www.ourenergy.coop. There you will have an opportunity to contact your elected officials to let them know that you are concerned.