EO Questions & Answers

EO Questions & Answers

In the fall of 2008, the Michigan legislature passed the “Clean, Renewable and Efficiency Energy Act,” requiring ALL electric utilities, and all regulated natural gas utilities, in the state of Michigan to implement Energy Optimization programs for their members. The programs are designed to reduce the energy use of participating members by encouraging investment in energy efficiency measures.

All members of HomeWorks Tri-County Electric are charged an Energy Optimization Surcharge to fund the programs that are required by state law to be implemented. This surcharge began with our first billing cycle in July 2009.

Q. Why does the state want us to use less electricity?
A. State lawmakers believe if we all use our electricity more efficiently, it will help limit the number of new power plants that will need to be built in Michigan as well as limit the future rate increases needed to pay for them.

Q. What are the charges?

A. Here are the rates currently in effect:

Rate Category
Monthly Charge
A, Farm & Home
$0.00173 /kWh
B, General Service
$1.31 /meter
C-D, Large Power
$42.73 /meter
Irrigation
$0.00197 /kWh
PSDS, Primary Service
$1,075.00 /meter

Q. When will Energy Optimization programs be available, and how much will they save me?
A.
The first programs began in August, 2009. The information we will provide you regarding these programs will tell you what energy efficiency measures are involved, and give you the approximate estimated savings. It is impossible to predict your exact savings because many factors influence your kWh use, such as living habits, weather, number of people in household, condition of your appliances and electrical equipment, and building size. A change in any of these factors can easily affect your consumption.

Q. Why should I participate if I feel the savings will be small?
A.
Your reduction in kWh use, along with all other participating energy users in the state, is expected to save everyone money in the future as the cost of producing energy increases. The Michigan Public Service Commission expects that your future savings should, at minimum, be large enough to offset the current EO charge on your bill.

Q. Will I still pay the EO charge if I decide not to participate in any of the programs?
A.
Yes, which is why all HomeWorks members are encouraged to participate. And even if you choose not to participate in a specific EO program, we plan to continue providing energy efficiency information, which you may be able to take advantage of, through Country Lines magazine, bill inserts, our website, member meetings, and other means. The EO charge is mandated by state law, and all electric utilities in the state, as well as all regulated natural gas utilities, are required to implement the charge and programs.

Q. How long will this EO charge be in effect?
A.
It will be a permanent part of your bill unless state lawmakers decide to amend the law, which is not anticipated. In addition, the Michigan Public Service Commission requires that we audit our EO program finances annually to make sure we are covering the costs. Adjustments to the charge may be necessary if we collect more or less than needed to cover costs.

Q. Is there a cost to participate in these programs?
A.
With some programs, the answer is yes. For example, we plan to offer rebates to members who wish to replace certain appliances and lights with Energy Star products, that are rated by the federal government as being energy-efficient. So in order to receive these rebates, you must purchase the appliance associated with the rebate.

Q. Will I receive any rebate credits on my bill for Energy Star products that I already use in my home?
A.
No, but your use of them will save you money. If you purchased the products in 2009 or after, check with your tax preparer for available tax credits.

Q. I have two accounts and the EO charge for my garage is different than the one for my house. Why?
A.
The 2008 state energy law requires that the EO charge for residential accounts be based on kWh use. All other user groups will pay a flat fee per meter, per month.

Q. How will these EO programs affect HomeWorks’ total kilowatt-hour sales?
A.
The 2008 state energy law required our total energy sales to be reduced by no less than 0.3 percent in 2009, 0.5 percent in 2010, 0.75 percent in 2011 and 1 percent annually starting in 2012.

Q. If HomeWorks Tri-County Electric sells fewer kilowatt-hours, will rates go up?
A.
Rates are not expected to increase because of the EO programs. The intent of these EO programs is to help stabilize rates by delaying the need to build new power plants.

Q. How do I participate in these programs?
A.
Program information will be available on our web site and in future publications as the programs are implemented. Or contact us at 1-800-562-8232.

Q. I have an account with another utility. Can I take advantage of their EO programs too?
A.
Yes, you can participate in EO programs through any utility that you purchase electricity or natural gas from. Your participation in HomeWorks’ programs will be only for the home or other type of account that is served by HomeWorks. Contact your other utility for information on their specific program offerings.

Q. Will Tri-County Propane, or my propane gas/fuel oil provider, also offer EO programs?
A.
Propane and oil providers are not required to offer these programs at the present time, so they will not be offering similar programs. They may be required to in the future, and would notify you at that time.

Q. I don’t agree with this law. Do I complain to our board of directors, or who should I contact?
A.
Contact your state legislator or the Michigan Public Service Commission. Visit www.michigan.gov and select Government, then Legislative Branch, or call 1-877-932-6424 to find out who your legislator is.

Q. What is this EO program average savings amount on my bill?
A.
This is the average savings all HomeWorks Tri-County Electric members in your rate class can expect to receive from these programs.

Q. So this is the amount I will save?
A.
Not necessarily. Please keep in mind that this is an average figure based on the estimated avoided costs of future coal-fired generating plants that will not be needed because of Energy Optimization. Your actual savings will depend on the EO programs you choose to participate in and how much electricity you save by participating.

Q. Where can I read more about Energy Optimization?
A.
Visit the State of Michigan web site at www.michigan.gov and search for information on PA 295.

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