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Levelized energy billing is a pricing strategy designed to provide our members with more predictable and stable energy costs over time. This approach spreads energy costs evenly across a billing period, helping to mitigate the cost and pricing fluctuations often seen in traditional billing methods. Here's an overview of its key components:

What is levelized energy billing? Levelized billing involves calculating an average cost of energy based on projected use and expenses over a specific time period. At West Florida Electric Cooperative (WFEC), that is an average of the past 12 consecutive months of utility bills. Instead of charging our members based on their actual monthly use, which can vary significantly depending on seasonal demands like weather, this method smooths out those costs, resulting in consistent monthly payments.

How it Works:
1. Average consumption: The co-op assesses historical energy use data to determine a member's average monthly energy use. 

2. Cost projection: We estimate future energy costs, considering factors like expected rates, the cost to generate electricity, and operational costs. 

3. Monthly billing: The total projected costs are divided by the number of months in the billing period, resulting in a fixed monthly charge.

Benefits:
• Predictable - Our members can budget more effectively with fixed payments, reducing the financial stress of fluctuating monthly bills.
• Stable - This billing method protects WFEC members from spikes in energy costs during high-use summer or winter months.
• Encourages Energy Consciousness - With a steady payment structure, members may be more inclined to adopt energy-efficient practices, knowing they can offset costs over time.
• Simple - Consistent energy costs facilitate easier financial planning and cash flow management.

While levelized billing offers advantages, there are some things that should be considered. One is initial overpayment. Some members might pay more initially if their actual energy use is lower than projected or estimated. Another is that there could be an adjustment period. Utilities might need to adjust billing rates periodically to account for changes in energy prices or consumption patterns.

Levelized billing can be a valuable tool for co-op members who are looking for stability in their energy expenses. However, this service will not benefit all of our members. If you are considering levelized billing, we encourage you to contact our member services representatives by calling 800-342-7400. They can take a look at the last 12 month's of your utility bills and provide you with an estimate of what your average monthly bill will be.