FREQUENTLY ASKED QUESTIONS
What are Net Benefits?
Net Benefits represent the total value of all programs and services provided to ElectriCities’ members in a given year (Gross Benefits) minus all of the associated costs to provide those programs and services (Fees & Dues).
Why do the Net Benefits change every year?
The types of services provided and their associated benefits/costs can change over time as new ways are found to provide value for our members. Members may participate in certain services during some years but not others or they may participate to a greater or lesser extent from one year to another. New power supply agreements, or the termination of agreements, may also produce large changes in net benefit calculations. These factors, in addition to variations in the cost of operating ElectriCities, result in fluctuating values for Net Benefits from year to year.
Do the Net Benefits include the value of benefits to be received in future years?
The Net Benefits do not include the value of future net benefits. The Net Benefits shown for any given year are only those that have been received by the members during that year. For example, NCEMPA executed a new Supplemental Load Agreement with Progress Energy in 2005 for the period 2010 through 2017. Although the total benefits expected to be received over the 8 year term of the agreement will likely exceed $100 million, only the $22.66 million of benefits actually received by the members during 2010 are reflected in that year’s Net Benefit calculation.
Why are no Net Benefits shown for support services that are required to manage an organization like ElectriCities, such as human resources and IT?
ElectriCities uses a very conservative approach when calculating Net Benefits, believing that “when in doubt, leave it out”. Although internal support functions such as human resources and IT provide valuable services to the organization, their value is difficult to quantify in terms of dollars and cents and therefore is not included in the calculation of Net Benefits.
What do the dollars shown under “Fees and Dues” represent?
The “Fees and Dues” category represents all of the costs — everything from salaries to office supplies to training manuals — required in any given year to operate ElectriCities and provide its members with a diverse menu of value added services.
What costs are included in Power Agency Services under “Fees and Dues”?
The costs shown in Power Agency Services consist almost entirely of (a) employee salaries and benefits; (b) consulting fees; (c) hardware to support telemetry, surplus sales and load management equipment; and (d) dues to organizations such as the American Public Power Associ- ation.
Who calculates the Net Benefits, how often are they updated and when?
Employees of ElectriCities generally calculate the Net Benefits and update the values for a given year during the first quarter of the year following the given year. Changes may be made more frequently in order to correct errors.
Who should I contact if I have questions, comments, suggestions or need more information?
Please click on “Questions and Comments” at the bottom of any page in the Value Proposition section of the ElectriCities.com website.