Dear Members, Having just opened your electric bill, you may have noticed your bill has gone up. The FPPC is the mechanism CVEA uses to collect from the members the cost of diesel fuel burned in the power plants, LSR fuel burned at the cogeneration plant, and the cost of power purchased from the state-owned Solomon Gulch hydroelectric facility. In fact, every electric utility has something similar in their rate structure to account for fluctuations in fuel and purchased power prices. Two years ago when we filed our last rate study, we pulled the FPPC out of the energy rate and made it a line item on your bill. The purpose for doing so was to illustrate that the FPPC is a significant component of your electric bill and, in addition, to enable you to better understand the FPPC mechanism.
Most folks are aware of what has been happening to the price of crude oil over the past two years.
See 1998-2000 crude oil price info on page 2. While higher crude oil prices may be good for the State s budget, it is not necessarily well received by consumers. The trend line is obvious. Graph 2 illustrates the FPPC per kilowatt-hour over the same time period, and as you can see, it tracks very closely to Graph 1. I am frequently asked what is the outlook for electric bills in the coming year.