The approved rate reduction for FY22 reduces overall retail charges to all customer classes per kWh by about 0.8%. Overall residential charges will remain unchanged, however, about 60% of residential customers will experience a slight increase in their average monthly bills, and about 40% of customers will experience a slightly larger decrease in their monthly bills depending on how they use their power consistent with the BLP's cost of service determinations. Commercial and industrial customers will see an overall reduction in charges of about 1.2% in total, but some will see modest increases and others will see larger decreases.
Understanding Your Energy Rates
KILOWATT HOUR (kWh) A kWh is the basic unit of energy by which the BLP meters and bills for electricity supplied to customers. An average residential customer uses about 608 kilowatt hours monthly. A 100 watt light bulb left on for 10 hours uses 1 kWh of electricity.
THE MONTHLY SERVICE CHARGE is a fixed charge billed to each customer to recover BLP costs that do not vary with the amount of electricity used by that customer. Such costs include billing, metering, administrative, and certain distribution system related expenses.
THE ENERGY CHARGE recovers costs incurred by the BLP that generally vary with the amount of electricity the customer uses each month. Such costs include wholesale power purchases. expenses. The Board set the PSCA to zero on July 1, 2020 to accommodate the transition from generating most of our power to purchasing all of our power through the Michigan Public Power Agency. The Power Supply Cost Adjustment will remain at zero for the next two years demand in a 15-minute intervall during the billing period. The Demand Charge recovers costs that the BLP incurs in proportion to the maximum demand of a customer as opposed to its average demand (ie, costs relating to the necessary size of facilities and equipment to meet its maximum peak demand). Some customers take more power in a shorter period of time, thus requiring proportionally larger investments by the BLP to provide electrical service.
THE POWER SUPPLY COST ADJUSTMENT (PSCA) increases or decreases the Energy Charge to recover variations in the actual costs of wholesale power above or below the base cost for these.
THE DEMAND CHARGE is assessed only to larger commercial and industrial customers. It is charged in proportion to each customer's maximum "peak demand (highest electrical demand in a 15 minute interval) during the billing period. The Demand Charge recovers costs that the BLP incurs in proportion to the maximum demand of a customer, as opposed to its average demand (i.e. costs relating to the necessary size of facilities and equipment to meet its maxiumu peak demand). Some customers take more power in a shorter period of time, thus requireing proportionally larger investments by the BLP to provide electrical service.