DEMCO customers are expected to get a reprieve in their bills when the new wholesale power contracts go into effect in 2024.
DEMCO announced on Nov. 2 that the contracts could result in an estimated 10-15 percent decrease in electricity rates for customers.
According to a statement DEMCO released on Wednesday, Dr. James Richardson, Professor Emeritus of Louisiana State University, projects that DEMCO members will save $160 million over the ten-year life of the contracts, or $16 million each year.
“The approval of these contracts will result in significant savings for DEMCO members,” said Randy Pierce, DEMCO CEO and general manager. “As an electric distribution cooperative, DEMCO purchases power from other companies who sell wholesale power – we don’t make the electricity, we deliver it. Power supply cost is about 65 percent of the electric bill, so having access to competitive market prices and locking in those good rates in advance will be great for our members and the communities we serve.”
DEMCO received unanimous Louisiana Public Service Commission approval of the new wholesale power contracts with NextEra Energy Marketing and Amite Solar, to go into effect on April 1, 2024. DEMCO’s current ten-year wholesale power supply agreement with CLECO Power expires on March 31, 2024.
“DEMCO will be able to lock in annual rates well before the beginning of each year to reduce month-to-month power supply price fluctuations,” Pierce said. “As technology evolves and power markets change, we will be able to adapt to find the best rates for our members.”
DEMCO also entered into a fixed-price 25-year solar power-purchase agreement with Amite Solar to take all of the capacity and energy from a proposed 100 MW Amite Solar facility to be constructed in Tangipahoa Parish.