Although temperatures may not reflect it now, fall and winter are a few short weeks away bringing with it cold temperatures and the need to heat our homes. While this area of the Ozarks generally does not rely on natural gas as a primary heat source, many power suppliers use this fuel source to generate the electricity we use.
With retail prices of natural gas predicted to rise an estimated 40 to 50 percent over last year's cost, wholesale prices for natural gas are rising at an even higher rate.
Mel Coleman, CEO of North Arkansas Electric Cooperative, says that wholesale prices for natural gas are changing at an alarming rate. In the event of a severe winter, more demand for electricity will result, and with the volatile fuel market, that means higher electric bills for consumers.
"The wholesale price of natural gas has an enormous impact on the electric bills of our members," Coleman said. "Natural gas is used to fuel a significant amount of the electricity generation that we purchase from our wholesale provider. As the world energy situation worsens, and with all the talk of global warming, policymakers are making it harder to construct new coal fired electric generating plants. Thus, as our needs for wholesale electricity grow, unfortunately we are relying more on natural gas fired generation -- and electricity generated from natural gas costs about twice as much as electricity generated from coal. In 2002, wholesale natural gas prices were $2 (mmbtu); in 2006 that price had risen to $6 (mmbtu); and recently we have seen prices jump to $14 (mmbtu); a rise of 700 percent since 2002. Today, the prices have settled in the $8 to $9 range, but we have seen major swings in gas prices in very short periods of time."
NAEC members saw an unexpected increase on their electric bill earlier this year in the form of a larger than normal PCA (power cost adjustment). This increase came not just from the cost of fuel prices but also from the railroad crisis.
"Arkansas Electric Cooperative Corporation, our wholesale supplier, is a captive shipper to two railroads, Burlington Northern Santa Fe and Union Pacific," Coleman said. "Rapidly rising costs associated with the rail transportation of coal and the wholesale price of natural gas rising created an unprecedented rise in the cost of generating electricity."
Through the end of last year, members of NAEC have paid an additional $15 million on their electric bills through the PCA. Coleman says this is not a rate increase but is a charge from the power supplier to the cooperative which is shared by every member.
"The additional generating fuel costs incurred by our power supplier are passed through to all of the 480,000 Arkansas cooperative members," Coleman said. "It shows up on NAEC bills under the power cost adjustment (PCA). So, as natural gas prices rise, and we rely more on natural gas fired electric generating plants, we will continue to see these exorbitant costs showing up on electric bills. Funds collected through the PCA are passed through to the wholesale provider, and are not retained by NAEC."
Now, a new challenge is facing electric cooperatives. With a demand for electricity increasing rapidly, ways to generate this needed power must be found. Issues preventing the development of coal and nuclear power facilities are forcing power suppliers to use natural gas with its wide swings in price.
The debate over climate change has all but eliminated any new generation from coal -- the least cost fuel source, according to Coleman. "The technology does not exist today to supply our nation's electric needs without coal and CO2 emissions," Coleman said. "Some people say we can meet future demand through efficiency and renewable energy, but that's just a drop in the bucket."
The Electric Power Research Institute says it will take the entire prism -- advanced clean coal generation, natural gas, nuclear, renewable from wind, solar, geo-thermal, bio-mass and conservation to meet future electric needs.
"Some estimates are that electricity demand in our country will increase 30 to 50 percent over the next 20 years," Coleman said. "Policymakers in Washington are so concerned with the climate change debate that they are willing to destroy the economy, with the real possibility of blackouts and brownouts, and possibly make electricity unaffordable for many. They need to hear from all of us, and we need to ask them questions about the availability, reliability, and affordability of electricity for future generations. I encourage all of our members to read the Messenger, the monthly NAEC publication included with electric bills. The September issue will have the latest information on these issues and members will also have a bill insert that explains how they can get involved in the energy debate. NAEC is not taking a position on the science of global warming, but we are taking a STRONG position when talking with policymakers regarding our ability to keep the lights on, and the electric bills affordable."
A grassroots campaign called "Our Energy, Our Future: A Dialogue With America" has been started by electric cooperatives across America. According to organizers, this campaign seeks to engage elected officials on critical energy questions, such as how to balance growing electricity needs and environmental goals, and how much this will affect electric bills. For more information, log on to their Web site at www.ourenergy.coop.
Turn down the thermostat especially when leaving your house and at night. Consider installing a timer so you don't have to remember to do it yourself. Set the temperature as low in the winter and as high in the summer as your comfort allows.
Replace traditional incandescent light bulbs with energy-efficient compact fluorescent bulbs which are up to four times more energy efficient than incandescent bulbs and provide the same light levels. They also last up to nine times longer than standard incandescent bulbs.
Turn off lights in any room you're not using, or consider installing timers, photo cells or occupancy sensors to reduce the amount of time your lights are on.
Clean or replace filters on your furnace, air conditioner and heat pump regularly.
Wash full loads of laundry using cold water when possible. Don't over-dry your clothes -- if your dryer has a moisture sensor, use it. And clean the dryer's lint filter after every load to improve air circulation.
Use the energy-saving settings on refrigerators, dishwashers, washing machines and clothes dryers. Go a step further and air-dry your dishes by opening the dishwasher instead of using the heated drying cycle.
Don't keep your refrigerator or freezer too cold. Recommended temperatures are 37° to 40°F for the refrigerator and 5°F for the freezer. Remember to clean the coils on your refrigerator.
Check for and caulk any holes or cracks around your walls, ceilings, windows, doors, light and plumbing fixtures, switches, and electrical outlets that can leak air into or out of your home. Use non-expanding foam insulation around doors and windows.
Humidity is a factor. Take baths or showers and wash dishes early in the morning or in the evening instead of during the day. Use an outside clothesline to avoid adding heat to your house during the hottest months. Replace old or worn out bathroom exhaust fans with humidity sensing units.
Cook smarter. Match the size of the pan to the heating element. Use electric pans, toaster ovens or microwaves for small meals rather than your large stove or oven. You can use less energy and reduce cooking time.
Turn off the computer. You will conserve energy by turning off or using sleep mode for any computer not in use for two hours or more.
Take more showers than baths. Bathing uses the most hot water in the average household.
Lower the temperature on your water heater. A setting of 120°F provides comfortable hot water for most uses. And installing an insulating blanket on your water heater should pay for itself in less than a year. Consider replacing old or leaking water heaters with a lifetime warranted, high energy efficient Marathon water heater.
Replace aging, inefficient appliances. Even if the appliance has a few useful years left, replacing it with a top-efficiency model is generally a good investment. Look for the Energy Star label to select energy-efficient products when you buy new heating and cooling equipment and appliances.
Landscaping can also help. A line of fast-growing trees, like poplars, or tall shrubs can serve as a windbreak. Planting evergreen trees on the north side and deciduous trees on the south side of a home can block winter winds and summer sun. Shrubs along the house can help, too, but don't let them interfere with heat pumps or air conditioners. Use an air-conditioner with an efficiency rating of 13 or higher. Window units are rated by their Energy Efficiency Ratio (EER), while central systems use a Seasonal Energy Efficiency Ratio (SEER). Use the proper size because bigger is not always better. If you are building a new home, consider installing an energy efficient geothermal system to cool and heat your home.
Insulate. Check to make sure insulation levels are appropriate in your attic, exterior and basement walls, ceilings, floors and crawl spaces. You can increase the comfort of your home while reducing your annual heating and cooling usage by up to 10 percent by simply investing in proper insulation and sealing air leaks.
Service accordingly. Have your heating and cooling systems tuned up in the fall and spring. Service other appliances as recommended in your owner's manuals.
Upgrade leaky windows. It may be time to replace them with energy-efficient models or to boost their efficiency with weather-stripping. When replacing old windows, be sure to select a window with a U-factor of .30 or lower and with low-E coatings.