Front Royal has edge as small power provider

By Alex Bridges

Front Royal maintains low electricity rates while customers served by neighboring providers face higher costs.

Customers of Shenandoah Valley Electric Cooperative and Rappahannock Electric Cooperative, both in their original territories and in areas they acquired from Allegheny Power a few years ago, pay higher rates than users in Front Royal, according to information from the providers.

A rate chart released by the Virginia Attorney General’s office earlier this year shows Front Royal charged residential customers $93.28 per 1,000 kilowatt hours as of January. Department of Energy Services Director Joseph Waltz said Friday the town rate likely has not changed by much, if at all, since January.

In January, Rappahannock Electric Cooperative charged $99.42 per 1,000-kilowatt hours — an increase from $98.83 the previous year — for residential users in the acquired areas. The cooperative charged $115.91 for residential users in its original or “legacy” area — a decrease from $120.04.

Matt Faulconer, manager of external affairs for Rappahannock Electric Cooperative, said Thursday the rates from the attorney general’s office have changed. The cooperative increased its rate by approximately $5 per 1,000-kilowatt hours. Record-setting demand for electricity this past winter as a result of extreme weather caused by the “polar vortex” prompted the cooperative to raise the rate in May.

“The laws of supply and demand kicked in and the more you demand the more they can charge and that’s what happened,” Faulconer said.

Faulconer said a snapshot of rates from one month has limitations.

Rappahannock Electric Cooperative now charges $121.54 for residential customers in the legacy area and $105.05 to users in the acquired territory, Faulconer said. In July, customers in the acquired area will see their rates increase to $110, Faulconer said. Residential customers use an average of 1,300 kilowatt hours per month.

Shenandoah Valley Electric Cooperative charged customers in the former Allegheny Power area $106.36 per 1,000-kilowatt hours in January — an increase from $98.15 from the previous year. The cooperative charged $111.35 in its legacy area — an increase from $108.17 the previous year.

As of this week, Shenandoah Valley Electric Cooperative charges residential customers in its legacy area $108.53 per 1,000 kilowatt hours each month and $104.97 for users in the acquired territory.

J. Michael Aulgur, manager for external affairs at Shenandoah Valley Electric Cooperative, confirmed that changes in the rates from its wholesale supplier are passed along to its consumers or members on a dollar-for-dollar basis.

Waltz’ department plans to conduct a study of its rates later this year. Whether the results of that study prompt the town to change the rates remains uncertain. Waltz has given much of the credit for the low rates to the town’s investments in power production. But the town also can thank a higher density of customers in the service area that limits overhead costs.

As Faulconer explained, Rappahannock Electric Cooperative has more customers spread out over a larger area than Front Royal. Front Royal serves approximately 7,300 customers. Rappahannock has more than 150,000. Shenandoah has almost 90,000. Both cooperatives cover multiple counties across Virginia. Distance between customers does affect the providers’ overhead costs, Faulconer said.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com