Your Electric Bill Explained

Fuel Adjustment Factor Explained

What is the fuel factor, power cost adjustment on my bill?

As you are probably aware, the price of natural gas, oil and coal used to generate electricity has skyrocketed.  The market sets the price for these fuels on a state and national basis.  Socorro Electric Cooperative is a distribution cooperative that does not generate any of the electricity it sells.  The Cooperative operates as an energy "wholesaler," buying electricity in bulk to benefit its member-owners.  The fuel factor adjustment on your bill is a way for Socorro Electric Cooperative to be reimbursed for the actual cost of the power purchased to meet the needs of its member-owners.  As a not-for-profit cooperative, Socorro Electric Cooperative has a responsibility to charge you only what is necessary.  Socorro Electric Cooperatives fuel factor adjustment allows this to be accomplished.  Other rising costs that affect the adjustment include the cost of meeting environmental regulations related to power plant emissions.
 

Why is the fuel factor, power cost adjustment different?

Socorro Electric Cooperative uses a levelized quarterly fuel factor.  The bill for the electricity purchased by Socorro Electric Cooperative for its member-owners is paid as soon as it is received.  Then, the difference between what has already been collected from the customer and what the Cooperative has had to pay for electricity is determined.  That difference is the fuel factor adjustment on your bill.  It is important to remember that this adjustment can be, and has been in the past, a credit to our member-owners.  The Public Service Commission of New Mexico has approved Socorro Electric Cooperatives fuel factor adjustment because it believes it is a fair way for Socorro Eleectric Cooperative to recover the actual cost of electricity from its member-owners.  Your Cooperative makes no profit from this adjustment.