Fuel Factor

Shenandoah Valley Electric Cooperative buys a majority of its power requirements from Old Dominion Electric Co-op (ODEC). This generation and transmission Co-op is owned by 11 distribution co-ops in Virginia, Maryland and Delaware. ODEC owns approximately half of its power supply needs, with a coal-fired generation unit in Halifax County and 11% of North Anna Nuclear plant. The other half is bought from other suppliers through contracts.

ODEC's rates are regulated by the Federal Energy Regulatory Commission (FERC). SVEC is regulated by the State Corporation Commission (SCC). To protect consumers the SCC has established a base cost of energy and allows fluctuations in that cost of energy to be passed on through a fuel charge. To protect consumers even more, the fuel charge above, or below, the base charge is averaged over a 3 to 6 month period to prevent huge fluctuations. Up until the spring of 2001, this charge to you from SVEC had been very small, either positively and negatively.

In 2001 the fuel charge increased to historically high levels. Up until a few years ago, all contract purchases for ODEC were made under Federally regulated cost of service rates. Since then, energy purchased by ODEC has transitioned from the regulated cost basis to deregulated market based purchases. This meant that purchases are determined by whatever the market will bear, not by a regulator. The energy crisis in California is the prime example of what the market will bear.

The chart provided here indicates SVEC's per kWh fuel charge for the past 12 months and the average fuel charge over that period of time.