By Rick Lemonds, president & CEO
With a couple of months of hot weather behind us, some of you reading this may have seen record high bills, even if you’ve lived in your residence for years and if your use of electricity has remained relatively constant. I want to take a moment to address an important topic that affects all of us — rising costs and the impact those costs have on your bill. Many of you have noticed an increase in your bills, and I want to explain why this was necessary and why similar increases may continue.
Why rate adjustments are necessary
At South Central Power Company, our mission is to provide reliable electricity to your homes 24/7, regardless of your usage patterns or external factors like weather. This commitment involves significant fixed costs, even if you use less than the average member. These costs include updating and maintaining our operational infrastructure — think of the poles, wires, meters, and substations that ensure you can access electricity at any time. Additionally, we must be prepared to deploy line workers to resolve issues promptly, ensuring that your power is restored swiftly, even during severe weather like we experienced several times this summer.
The realities of fixed costs
It’s crucial to understand that — even if you conserve or are a small household with lower power needs, or if you install home solar to provide the energy for some of your daytime usage — while a decrease in your electric usage will result in an overall lower bill, it does not reduce these fixed costs for the cooperative. Every month, you pay a consumer charge that helps us recover a portion of these expenses. This charge allows us to ensure that power is available to you at the flip of a switch, no matter when you need it, and regardless of how much electricity you use each month. Without this charge, those who use more power would effectively be subsidizing those with lower usage, an unfair approach to utility billing.
Future increases
This spring, for residential consumers, South Central Power raised the consumer charge by $5 per month. As the cost of materials and overall business operations continues to rise, so, likely, will the consumer charge in the coming years. These increases are essential to maintain the quality and reliability of the services we provide. We believe in transparency and communication when it comes to explaining the rising cost of power. And, it’s important for you to know that these costs impact all members.
Generation and transmission costs
Although our ownership in Buckeye Power has insulated cooperative members from many of the runaway increases in the cost of power regionally and nationally for the last several years, the fact remains that inflation and other market forces are causing increases in the cost to generate and transmit electricity across the board. These costs are passed on to you through your bill’s calculation of the generation and transmission line item, which you can see on the back of your bill and represents costs your cooperative must recover and pay to our transmission and generation providers. This approach means you will always get the lowest possible cost, and historically, this has led to lower bills for consumers during certain periods and market conditions.
Our commitment to you
Despite these rising costs, our trustees and employees are dedicated to providing you with the best service at the lowest possible cost. We strive to balance the need for financial sustainability with our commitment to delivering reliable power to your homes. And, we remain competitively priced — our average residential bills remain lower than the bills of many other comparable electricity utility providers in Ohio and elsewhere in our region.
Thank you for your continued membership and support. We hope this explanation helps you better understand the challenges we face and reason behind our rate adjustments and rising bills.
From the September 2024 issue of Ohio Cooperative Living.