CoServ doesn’t generate electricity – we buy it from Brazos Electric Power Cooperative, a Waco-based co-op that provides power to CoServ and 15 other co-ops. Brazos owns the transmission lines and substations. CoServ owns the local distribution lines and equipment that deliver power to our Members.
This article will explain where your power comes from and how the cost is determined.
So how is your bill calculated?
First, let’s break down your base rate by following its journey from the point of generation to your home, business or school.
Let's start with the actual electricity, CoServ buys on the wholesale market from Brazos and the statewide Electric Reliability Council of Texas. This power comes from power plants and renewable energy sources across the state of Texas. That cost makes up about 60 percent of your electric rate.
Next, the power travels on Brazos' transmission lines and into the substations. The transmission and substation cost makes up about 15 percent of your electric rate.
From the substation, the electricity travels on CoServ's local distribution system, which is made up of wires, transformers, switch gears and other equipment, until it reaches its destination. This is known as the local delivery and makes up about 25 percent of your electricity rate.
As the cost of electricity goes up and down, those changes are passed through to CoServ and we pass those on to our Members. As an electric co-op, we never mark electricity up for profit.
The wholesale price of electricity changes based on a number of factors, the biggest being the price of natural gas.
Because our base rate doesn’t change, CoServ has to account for these changes in wholesale electricity cost by adjusting the Power Cost Recovery Factor (PCRF) on your bill each month. If the PCRF is a negative number, as it has been since 2009, then it subtracts from your electric rate, lowering the cost of power.
Base rate - PCRF = Your energy charge
For more on CoServ electric rates, click here.