The Cooperative Difference
What is the difference between a cooperative,
like CoServ Electric, and a for-profit electric company?
By definition, a cooperative is jointly owned and operated by its members for their mutual benefit. While for-profit electric companies are owned by investors who want profits, an electric cooperative is owned by those who receive its service – and they want reliable electricity at the lowest possible rates.
CoServ Electric is not-for-profit, which means we only charge our members the wholesale cost for the electricity they use, as well as costs to run the cooperative and keep it in good financial condition. Unlike larger, for-profit electric companies, we don’t add on unnecessary charges to generate huge returns. In fact, any extra money we make is passed on to our member-owners in the form of “capital credits” – a type of member dividend.
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What are the benefits of CoServ Electric membership?
CoServ members are part-owners in the second largest cooperative in Texas. You can attend the annual meeting each June, vote for board-of-director representatives, and generally have a voice in the running of your cooperative. Here’s what else we promise you:
- Value: We provide electricity at the lowest price possible.
- Reliability: In the case of an unavoidable outage, our state-of-the-art technology helps us resolve the issue promptly.
- Convenience: We are here to serve you 24 hours a day, 7 days a week. If you call us outside of normal business hours (8 a.m. to 5 p.m.), follow the phone prompts to report an outage. If you have a safety emergency, you can choose to speak to a live person. You may also visit our Web site, which features online bill payment, account information, energy saving tips and more.
- Commitment to Community: Through the CoServ Charitable Foundation and Operation Roundup®, we give back to the communities we serve.
- Safety: Our operations personnel receive weekly training on dealing with high voltage, hazard recognition, defensive driving and other issues. By preventing expensive mistakes, co-op costs stay low – and we pass the savings directly to you.
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Understanding Your Bill
How are your rates determined?
Because CoServ Electric is a member-owned, not-for-profit cooperative, our rates are based on only two things: 1) our wholesale cost of electricity and 2) the funds needed to run the cooperative (i.e., overhead) and keep it in good financial condition. We return any margin (or profit) to our member-owners in the form of “capital credits” – a type of member dividend.
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When can I expect to receive my bill?
Each month, CoServ Electric reads your meter and mails you a bill. Your due date is 17 days from the day we mail your bill. If you don’t pay your bill on time, you will be charged a late fee equal to 5 percent of the most recent electric energy charge, customer charge and PCRF. (This offsets our cost to collect from members who don’t pay their bills on time.) You are subject to being disconnected 13 days after the due date. For more information about our billing process, visit the Billing & Payment page.
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What are the different charges on my bill?
- Electric Energy Charge: Your electricity usage (in kWh) multiplied by your
rate.
- Customer Charge: A fixed charge that pays for utility expenses not directly related to the generation of electricity or operating and maintaining the distribution system, e.g., customer-related services, billing and metering.
- PCRF: Stands for “Power Cost Recovery Factor.” This fluctuates depending on the cost of CoServ’s fuel supply (wholesale power). It is multiplied by the number of kWh used to determine the dollar amount charge you see next to “PCRF” on your bill.
- Franchise Fee: Covers the money CoServ pays to a city to use street rights-of-way for placement of distribution lines. Only those members who live in a city that requires CoServ to pay this charge have a Franchise Fee on their bills.
- Current Charges: The sum of the Electric Energy Charge, Customer Charge, PCRF, City Sales Tax and Franchise Fee.
- Operation Roundup®: If you participate in this program, your monthly bill is rounded up to the nearest dollar amount. The extra change is donated to the CoServ Charitable Foundation, which distributes the funds to charities in the community. The average member pays an additional $6 per year to Operation Roundup. If you are not currently enrolled in the program and would like to be, please call Customer Service at 940-321-7800 or 1-800-274-4014.
- Account Balance: Total amount you pay; same as the Total Amount Due. This includes any unpaid amount from your previous statement plus the total Current Charges.
Remember, you will be charged a 5 percent late fee if you don’t pay your bill on time. (See the
Payment Options page.) For a more detailed explanation of your bill, view the
sample electric bill or
sample combination bill.
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What are my options for billing plans?
Our most popular plan charges you for the actual electricity you used during the previous month. For residential members who have 12 months of payment history with CoServ (at your current service location), no late payments and a zero balance, you also have the following options. (You must pay with automatic bank draft to use either of these plans.)
- Equalized Billing: Each month, you pay an equalized amount determined by averaging your available billing history for the past 12 months. Each June, your account is re-evaluated and a new equalized amount is established. Enrollment in this plan is limited to July, August and September.
- Rolling Average Billing: Each month, you pay an amount based on your previous 365 days of electricity usage. For example, the bill you receive for usage in March would be calculated by averaging your usage from April (of the previous year) through March. The bill you receive for usage in April would be calculated by averaging your usage from May (of the previous year) through April, and so on.
To change your billing plan, please call Customer Service at 940-321-7800 or 1-800-274-4014.
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What are my options for payment methods?
- Automatic Bank Draft: Call Customer Service at 940-321-7800 or 1-800-274-4014
to set up automatic bank draft. In this program, your account balance is
automatically drafted from your bank account each month on or near your due date.
- Online Bill-Pay Through Your Bank: Most banks offer an online bill-pay service, and some offer it for free. Check with your bank to see if you can pay your monthly bills using their online bill-pay program.
- Mail: Send payment to CoServ Electric, P.O. Box 650785, Dallas, Texas, 75265-0785. For your convenience, an envelope and a payment stub are included with your bill.
- In Person: Visit us at our headquarters at 7701 South Stemmons in Corinth, Texas, between 8 a.m. and 5 p.m. You may pay with cash, check or money order when paying in person. If you come outside of regular office hours, place your payment (no cash, please) in the night depository located in the parking lot.
- Phone: Call 1-800-807-3891. You may use electronic check, ATM/debit card with a Pulse, Star, NYCE or Accel logo, or a VISA or MasterCard credit card. A $3.95 processing fee from BillMatrix will apply.
- Online: Visit the online payments page to use electronic check, ATM/debit card with a Pulse, Star, NYCE or Accel logo, or a VISA or MasterCard credit card. BillMatrix charges a $3.95 processing fee for this transaction.
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Industry Issues
How does electricity deregulation affect CoServ members? Do I have the power to choose my electric provider? Why or why not?
- CoServ’s member-elected board of directors decides whether to opt in
to competition.
- Once we opt in, we can’t opt out.
- CoServ members who switch to another Retail Electric Provider would likely pay more for electricity.
- If CoServ was forced to opt-in and offer retail choice, the aspects of providing customer choice would prove very costly and difficult to achieve. The extra cost would be reflected in our rates to both existing members and new customers.
- Right now, it doesn’t look like opting in is in the best interest of our members.
In 2001, retail electric deregulation was implemented, providing customers with the right to choose a Retail Electric Provider (REP). All electric utility companies – except cooperatives and city-owned electric companies – are now required to offer “retail choice” to their customers. The board of directors for electric cooperatives (and the city councils for city-owned electric companies) decides if or when to offer retail choice within their respective service areas. Before retail electric deregulation, all parts of your electric service – generation, transmission and distribution, and retail sales – were provided by one electric service provider. Since retail electric deregulation was implemented, those companies required to offer retail choice were also required to separate these functions into three distinct companies:
- Companies that handle “generation” produce electricity by using fuels such as natural gas, coal, wind, water, nuclear power and solar energy. The electricity rates charged by REPs include the wholesale cost of producing electricity.
- Companies that handle “transmission and distribution” deliver electricity across poles and wires to homes and businesses. They own, operate and maintain the poles and wires, as well as respond to power outages. The organization that does this is often referred to as the “local wires company.” The electricity rates charged by REPs include the cost to provide these wire services.
- Companies that handle “retail sales” are called Retail Electric Providers (REPs). They sell electricity to customers, provide customer service, send bills and receive payments. The rates charged by REPs include wholesale power cost, wires cost and the REP’s cost of doing business. Consumers who have “retail choice” can choose the REP, but they cannot choose the generation company or the wire services provider.
CoServ Electric is the “local wires company” and the REP for the areas we serve. That means we are responsible for both delivering and selling electricity. Brazos Electric Cooperative, our wholesale power provider, produces the electricity.
Now that for-profit electric companies are in competition with each other, most Texans are able to choose a new REP if they wish. However, cooperatives and city-owned utilities (“municipals”) may decide whether to “opt in” to competition, which would allow their members/customers to choose their REP.
Since CoServ Electric is owned by our members, the elected board of directors determines our stance on this issue. Our board has decided to wait and see whether opting in to competition would be beneficial to our members. Once we opt in, we’re not allowed to opt out, so we must be positively sure it’s the right thing to do. So far, it doesn’t look like it would be.
Some people suggest that co-ops’ low rates would force other electric companies to lower theirs. This is simply not the case, as there are many other factors that go into the price of power. In fact, CoServ’s rates would most likely increase for our existing members, as well as other customers who choose us as their REP. That’s because, if cooperatives were forced to offer retail choice, costly changes and improvements would be required for the cooperatives’ billing systems and other business processes. This, in turn, would be reflected in their electricity rates.
Remember, when switching to a different REP, the “local wires company” stays the same. The same company as before still owns the poles and wires, so they would continue to own, operate and maintain them, as well as respond to power outages. Instead of charging the customer directly for this service, the “local wires company” charges the REP, who passes on the charge to the customer.
If CoServ were to opt-in and offer retail choice within its service area, CoServ would be the “local wires company” for our members. So, even if some members switched to a different REP, CoServ would still own, operate and maintain the poles and wires. Here’s what that might look like:
| |
Wholesale power cost (per kWh) |
Wires cost (per
kWh) |
| Competing Retail Electric Provider |
10¢ |
7¢ |
| CoServ |
5¢ |
7¢ |
* These figures are for illustration purposes only and do not reflect actual costs.
Members who switch to a for-profit REP would pay that provider’s wholesale power cost and CoServ’s wires cost. Members who stay with CoServ would continue to receive our wholesale power cost and wires cost.
Here’s the difference:
Competing Retail Electric Provider: 10¢ + 7¢ = 17¢ per kWh
CoServ: 5¢ + 7¢ = 12¢ per kWh
CoServ continues to watch the deregulated electricity market and what happens when cooperatives opt in to competition. There are many factors at play, but you can be assured that we are analyzing the issue very carefully. As always, our first priority is doing what’s in the best interest of our members. If you have any other questions about this issue, please e-mail contact@coserv.com.
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Is CoServ pursuing alternative energy sources, green power, etc.?
Yes, we are. Our wholesale power supplier, Brazos Electric Cooperative, currently provides 2 percent renewable energy. Brazos also has a plant with one of the highest efficiencies of all generating plants in Texas.
Brazos is conducting a study to determine the most cost-effective power supply resources and the necessary quantity to meet the demand of CoServ Electric and the other 16 member-owners of Brazos. This study, which will be completed in 2007, will also analyze the feasibility of including alternative energy sources, such as wind power, in Brazos’ portfolio. Brazos is also looking into ways to decrease energy demand so less power is used.
CoServ conserves energy in our operations, as well. We currently use several hybrid gas/electric vehicles, and we are determining the feasibility of using hybrids for more of our fleet. CoServ recycles much of the paper used in our headquarters, and we are creating an energy conservation plan for our offices. In addition, we are implementing software that determines the optimum driving routes for our field personnel. This will result in fuel and time savings.
We also encourage our members to use energy wisely. Visit the Energy Conservation section to learn more. You may request a free on-site audit of your home’s energy-efficiency – and tips to improve it – by sending an e-mail to contact@coserv.com. or calling Jason Cochran at 940-321-7812.
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Helpful Contacts
Who do I contact to conduct an energy audit of my home or business?
If you would like to know how to lower your electric bill, call Jason Cochran at 940-321-7812 to schedule an energy audit of your home or business.
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Who do I call to report a power outage?
Call Customer Service at 940-321-7800 or 1-800-274-4014.
If you call us outside of normal business hours (8 a.m. to 5 p.m.), follow
the phone prompts to report an outage. If you have a safety emergency, you can
choose to speak to a live person.
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Who do I call if I smell gas near my home or business?
Please report it immediately at 940-321-7800 or 1-800-274-4014.
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Who do I contact if I have a question about my account?
Call Customer Service from 8 a.m. to 5 p.m. at 940-321-7800 or 1-800-274-4014. You can also view your account information anytime by logging in at www.coserv.com.
