by Rick Lemonds, president & CEO
Regular readers of the magazine know that South Central Power Company frequently surveys its members to find out how are we doing, from our members’ perspectives. Not surprisingly, member satisfaction is almost always tied to two important aspects of our business: reliability and price. As announced in this magazine in February, this month, we are implementing a rate increase of $2 on our consumer charge, effective April 1, for our residential consumers. Other rate classes will see similar increases, and you can review our entire rate schedule for every rate class we serve on our website.
When it comes to price increases, we work hard to limit any increase to an amount that can be manageable, as we know any increase negatively impacts most members. When the board is reviewing price increases, the discussion often involves a comparison of South Central Power’s rates against the rates charged by other electric utilities. We provide these comparisons to the board several times a year and, while it can be difficult to create an apples-to-apples comparison, I am pleased to report that a typical South Central Power residential consumer pays less than they would if they were a customer of most of the other electric utilities in Ohio.
When this rate increase takes effect, the $2 increase will make up only around 1% of a member’s total monthly bill, but the increase was necessary for us to address the rising costs we face, as well as balance our desire to keep rates low while being able to meet our financial obligations and provide the best service we can.
So what is South Central doing to keep rates and bills as low as possible? Because you are a member of an electric cooperative, no portion of your power bill goes toward profits that drive earnings on Wall Street. Instead, the money you pay South Central Power each month goes directly to pay the charges we incur for the generation and transmission to supply your power and to fund the business expenses of the cooperative.
A portion of your bill funds the cooperative’s equity — and our general practice is to return any excess funds over what we need in a given year directly back to the consumers who provided it. We do this on a 20-year retirement cycle, so if you’ve been a member for 21 years or longer, you can expect to see a “capital credit” retirement appear as a credit on your bill, typically in June of each year. Even if you haven’t been a member for 20 or more years, you can take a look at how we are allocating your portion of equity — you’ll see this on the front on your April bill. Collecting and maintaining equity is a critical part of how we operate as a cooperative.
You might also ask — why are rates and bills rising everywhere across Ohio right now? Unfortunately, on top of the inflation that affected every sector of our economy, two trends are converging in our industry. We have seen a recent escalation in the closure of traditional generation resources, like power plants fired by coal and natural gas. This has occurred due to regulatory pressure from the EPA and others, as well as overall market pressures. And while only a small portion of the power we need comes from the market, the regulatory pressures impact the generation we own through our generation supplier, Buckeye Power. At the same time, the region is facing soaring demand for energy from users like large data centers. If this growth is not managed properly, it could lead to a serious demand and supply imbalance, which would negatively impact all consumers.
Yes, costs are rising, but we are also proud of the progress we’ve made with your power grid. Our investments and workforce are delivering fewer and shorter power outages on average when compared to only a few years ago. We will continue to work for you, balancing what we can to keep power both affordable and reliable.
From the April 2025 issue of Ohio Cooperative Living.