What’s on your bill? A simple guide to energy charges

When you open your monthly energy bill, you may notice several different charges. While some of these charges can vary from month to month, each line represents one piece of the cost to generate and deliver reliable electricity to your home.

As a cooperative member of Kenergy, you are served by a local, not-for-profit utility committed to providing dependable and affordable power. Kenergy’s not-for-profit generation partner, Big Rivers Electric Corporation, produces most of the electricity members need at power plants located in Western Kentucky.

The different line items on your bill are designed to keep costs fair and manageable over time. Instead of frequently adjusting base rates, riders help balance changing energy costs throughout the year and help smooth out seasonal or unexpected increases.

Breaking down your bill

Here’s a closer look at the key Kenergy charges and credits:
•Customer Charge: This is the basic cost to provide electric service, cover.ing infrastructure, such as poles and wires, as well as billing costs.

•Kilowatt-Hour Charge: This reflects the base charge for electricity you use each month.

•Member Rate Stability Mechanism (MRSM): This credit returns a portion of Big Rivers’ margins to co.operative members—one of the benefits of being part of a member-owned utility, like Kenergy.

Three riders are tied directly to the cost of Big Rivers generating and delivering electricity:
•Fuel Adjustment Clause (FAC)

•Non-Fuel Adjustment Clause Purchased Power Adjustment
(Non-FAC PPA)

•Environmental Surcharge (ES)

These riders cover the cost of fueling and maintaining the Big Rivers power plants, purchasing market energy when needed, and complying with environmental regulations. While “fuel” is part of the FAC and Non-FAC PPA names, the riders apply only to fuels used to generate electricity at power plants, such as coal or natural gas. They do not apply to gas for offices or trucks.

Why costs can change

For many years, fluctuations in the FAC and Non-FAC PPA riders were relatively small. In some months, the Non-FAC PPA rider even acted as a bill credit. In recent years, however, energy markets have become more volatile. Fuel costs and electricity prices swing significantly, often influenced by the weather. Extreme temperatures, whether very hot or very cold, can drive up energy demand, increasing the cost of generating and purchasing electricity.

Early 2026 brought unusually severe conditions. When Winter Storm Fern arrived in late January, Western Kentucky experienced several inches of snow and more than a week of below-freezing temperatures. The storm also impacted much of the Midwest and South, covering large areas in heavy snow and ice.

As the winter storm lingered, electricity demand at homes and businesses rose quickly, straining the power grid. At the same time, frozen equipment caused some power plants to go offline, while others faced sharply higher fuel costs, particularly for natural gas, with the region experiencing some of the highest natural gas prices on record. Together, these factors created challenging conditions across the system. By the end of the week, energy costs totaled tens of millions of dollars above normal, with similar situations affecting many utilities across the Midwest.

Managing costs and supporting members

In response to events like these, Kentucky lawmakers moved to allow utilities to spread unusually high fuel costs over time, helping minimize sudden bill increases. Big Rivers and Kenergy also continually work to manage costs responsibly. Bill charges are regularly reviewed by the Kentucky Public Service Commission to ensure accuracy and fairness.

The FAC rider changes each month and lags by three months. For example, the FAC portion of January’s winter storm was reflected on the bill you received in April 2026.

The Non-FAC PPA rider is adjusted once a year, which provides predictability. In November 2026, it will update to the new annual rate, approximately a $0.02 per kWh increase. This spreads the remaining winter storm costs over the next 12 months.
The Non-FAC PPA and FAC riders are both based on your monthly energy use, which means you can help manage these variable costs. Using less electricity can lower each rider’s impact on your bill. Improving your home’s energy efficiency is a simple way to reduce overall energy use and save money year-round.

New line for fall energy bills

You may notice a new line on your electric bill this fall. Starting with bills you receive in late September or October, the current FAC rider will be shown as two separate line items: the FAC and the Interim Energy Adjustment.

This change is being made for transparency, at the direction of the Kentucky Public Service Commission. It will not increase or decrease your bill. The total amount collected remains the same—it will simply be displayed differently.

The IEA reflects certain fuel and power costs from a fixed-rate power agreement for a large industrial member. Since industrial members use significant amounts of electricity, their participation helps spread the costs of system improvements. The agreement supports major economic growth for our region and helps stabilize rates for all members.

For more information about your bill, helpful energy-saving tips or available payment assistance programs, visit the Kenergy website.