Part 2 of the series: Understanding your BELCO Bill.
The Facilities Charge is the second fee showing on your BELCO bill. In Part 2 of the Understanding your BELCO bill series we'll explain the Facilities Charge (FC).
What is the Facilities Charge?
The FC is a monthly base rate charge, applied as a flat fee every billing period. The FC provides the average cost for metering and billing services, and fixed cost of operating their network and covers a portion of the fixed charges to supply electricity to your home.
Any service for your house includes a fee for the service you are receiving. For BELCO customers, this monthly charge is called the Facilities Charge.
Why is there a Facilities Charge?
There are several costs associated with the transmission, distribution, and retail (TD&R) infrastructure. The fixed cost closely aligns (reflects) the cost of providing power to the customer. The funds assist to ensure electricity is delivered at consistent and optimal levels.
The Electricity Act 2016 enables BELCO to recover legitimate and reasonably incurred expenses related to producing electricity.
Why is the Facilities Charge a fixed fee?
The fixed cost associated with the FCdoes not vary with energy use, therefore, the FC is a stable cost throughout the year. By recovering a portion of necessary expenses through the facilities charge and not through usage charges it ensures fair allocation of cost to the customer.
Why did the charge increase?
As expenses to facilitate electricity go up, the fixed cost increases as well. General cost related to services including equipment to supply electricity to the home have risen – in addition to the cost of living and inflation.
What’s the difference between the Usage Charge and Facilities Charge?
The Facilities Charge is a fixed charge. The Usage Charge is based on your personal electricity usage.
Why does BELCO charge different amounts for the Facilities Charge?
The residential Facilities Charge is tiered or graduated, based on your average daily kilowatt hours (kWh) used over the previous 12 months. It is reviewed monthly and BELCO uses your annual rolling average to update the Facilities Charge that is applied to your monthly BELCO bill.
The graduated Facilities Charge is intended to encourage energy conservation and low energy usage which is reflected in the price of the tiers as your daily consumption increase.
The fewer kWhs of electricity you use each month, the lower the total fixed rate will be.
The current rates are:
RESIDENTIAL FACILITIES CHARGE TIER RATE
FIRST 0-10 kWh/day $ 21.33
SECOND 10-15 kWh/day $ 32.00
THIRD 15-25 kWh/day $ 42.61
FOURTH 25-50 kWh/day $66.66
FIFTH 50+ kWh/day $101.33
Why is the Facilities Charge higher than my usage?
The Facilities Charge is billed as long as you have an active BELCO account. Payment for the Facilities Charge is required even when your usage is low because it is based on the average daily kilowatt hours (kWh) used over the previous 12 months. Because it is a fixed fee, there may be instances where the charge is more than your usage because your Usage Charges are based off your energy consumption.
When will there be another increase?
The rates are reviewed annually and updated if necessary.
In Part 3 of Understanding your BELCO bill series, the Fuel Adjustment Rate is clarified.