What is the WPA?
The Wholesale Power Adjustment (WPA) reflects any difference between the base cost of wholesale power and what the market rate was during the month being billed. If the kilowatt-hour (kWh) cost to Firelands Electric is higher than the base cost of power, the WPA is applied to your bill as a charge. For example, if the difference between base cost and market rate is $0.01 per kWh, a home that uses 1,200 kWh during the month will be billed an additional $12.00 (WPA x kWh). If the difference between the WPA and current rate is smaller, then the member pays the smaller amount.
Using a WPA covers monthly power cost fluctuations without having to continually restructure electricity rates. The WPA was introduced in the mid-1970's during the energy crisis following OPEC’s oil embargo. At the time, the price for all types of energy (oil, gas, coal, electricity) was fluctuating drastically and it was impossible to estimate what the cost would be from month to month. To allow for the changing cost of coal used to generate electricity, the WPA was added to the billing calculations.
What affects the WPA?
The WPA fluctuates for a variety of reasons. Increased costs for fuels like coal and natural gas play a large part in the price of wholesale power. Electricity is also more expensive to generate during extreme weather conditions, when the demand for electricity is much higher. Changes in the cost of materials and equipment, and upgrades to meet environmental regulations also influence the WPA.
What does the co-op do to combat these costs?
Firelands Electric does everything possible to keep costs down — but, unfortunately, we can only do so much to control the rising costs of fuel and other materials. However, you can rest assured that Firelands Electric does have measures in place to help limit these increases.
For starters, our power supplier, Buckeye Power, uses a mix of fuel sources to generate electricity for Ohio’s cooperative members, including coal, natural gas, solar, hydro, and methane. This diverse group of resources allows Ohio to help reduce the dramatic fluctuations in generation costs that can occur if limited to a single fuel source.
The cooperative also participates in Ohio’s load management program. Firelands members who voluntarily take part in this program reduce the demand for electricity during extreme weather conditions, thus helping to prevent cost increases. Firelands Electric also offers a variety of programs and services to help members lower their electricity use and save on their energy bills. Visit www.firelandsec.com/member-programs to learn more.
For additional information, read Understanding Wholesale Power Adjustment. For instructions on how to read your monthly billing statement, click here.
If you have questions or would like more information about WPA, or any other item on your bill, please contact us here or call 1-800-533-8658.