By Rick Lemonds, president & CEO
As discussed last month, South Central Power Company is increasing the consumer charge by $2 for our residential members effective April 1. We often talk about the consumer and distribution charges with our members, because those are the rates that South Central Power sets. And, as I shared with you last month, for the average residential member, the charges from rates set by South Central Power only comprise roughly 30% of your overall bill. So this month, I’d like to focus on the generation and transmission charge.
The generation and transmission charge on your South Central Power bill isn’t a “rate” set by South Central Power; rather it’s essentially a pass-through charge that we must recover based on the power we purchase on your behalf. It’s also the cost we must pay to the state’s transmission providers to move bulk power from where it is generated
to the distribution substations where it is needed.
As a state and a nation, we must continue to invest in upgrading our electric transmission system, and those investments also drive up consumer power bills. We are losing baseload generation because of the closure of many coal, gas, and nuclear plants, while at the same time, utilities across the country are projecting growth in the demand for power that we have not seen in decades. Modern transmission systems need to be able to accommodate traditional baseload sources of power, as well as newer intermittent forms of generation such is solar and wind. Plus, they need to deliver power over longer distances to increasingly large and complex electric consumers such as data centers.
The numbers are stark — in July 2018, our generation and transmission cost was 7.4 cents per kWh, but by July of last year, that number had risen to 9.7 cents per kWh. Since 2011, we’ve seen the cost of transmission increase more than 400%. That cost is up 230% since 2018 alone.
So, what can be done? In January, we witnessed the transfer of power from one presidential administration to another, and with it came the promise of a renewed focus on realistic energy policy. While this is good news, we also must realize change in power generation and transmission doesn’t happen overnight. It’s taken us decades of not only closing, but in many cases, demolishing coal, gas, and nuclear plants to find ourselves in this situation. There is no overnight solution that will bring that baseload generation back. We must be patient, and understand a multipronged, long-term approach is the only answer to solving the energy needs of not just today, but also the future for generations of Ohioans.
If you’d like to learn more about what we’re doing, and how you can be involved in advocating for responsible energy policy that protects reliability and affordability for members like you, visit our website.
From the March 2025 issue of Ohio Cooperative Living.