Summer Brings High Energy Use, High Demand, and Higher Costs

FREMONT – Many Department of Utilities customers opened their bills this month to discover that their electricity costs may be higher than they anticipated. The reason? Summer electric rates.

If you’re a Fremont Department of Utilities customer, you pay two different electric rates per kilowatt hour (kWh) depending on the calendar month: summer rates vs. winter rates. In October through May, D.U. customers pay 7.14 cents per kWh of electric usage, plus a $16.00 customer fee each month. In June through September, customers continue to pay the $16 customer charge, but the kWh cost rises to 11.85 cents.

Why the increase in cost over the summer months? “Our own costs [as the Department of Utilities] are greater in the summer,” explained Fremont City Administrator, Brian Newton. “We have to run all the power plants, all the time, all summer long to handle these hot weather energy peaks.” The increased load on the power plants increases the operational costs on the Department of Utilities. When the summer temperatures cause peak demand, the plant has to burn more coal to create energy. The plant will also consume more water, more power itself, more industrial chemicals, lubricants and other supplies. It is also producing more waste, which must be appropriately disposed of at an additional cost. Maintenance costs are also increased during peak usage. All of these things combined create much higher costs for the plant to continue operating at full production levels all summer long.

Higher energy costs may also incentivize people to use less electricity during these summer months, making it slightly easier for the city’s power grid to meet demand.

Summer/Winter rate changes have been part of the Department of Utilities cost/service plan for many years, with the most recent charges approved by ordinance #5422, created in 2017. (SEE THE FULL DOCUMENT.)

The Fremont Department of Utilities does offer a level billing plan called Budget Billing, which gives customers the same billed cost each month, averaging utility use and spreading these kWh cost changes throughout the year, which many customers find advantageous when planning their household budget. To take advantage of the Budget Billing plan, you must have lived at the service address long enough to have twelve monthly bills. The city averages those 12 bills to determine the amount you’ll pay each month. (Sign up for Budget Billing is taken during the month of April.)

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