Transmission system upgrades increase flexibility, come at a cost - South Central Power

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Transmission system upgrades increase flexibility, come at a cost

December 27, 2021

It’s hard to believe that another new year is upon us. At South Central Power Company, we’re grateful for the opportunity of another year of service to our communities. We are also looking ahead at the challenges we face and charting a course to best address them while still providing you, our members, with the best service we can.

Transmission grid investments increase reliability

As I’ve said before, it’s an exciting time in the utility business, with important changes on the horizon. The good news is that new technology, coupled with a growing nationwide trend of more renewable power sources like solar and wind, means our industry has a greater ability than ever before to deliver reliable power that’s greener and more sustainable. This means a more robust power grid, capable of preventing or minimizing some types of large outages and withstanding strain from extreme weather and variable power sources.

Investments come at a cost

As you would imagine, though, it does come at a price. South Central Power does not directly own much of the state and regional transmission grid, so when our transmission partners (typically large investor-owned utilities operating in multiple states) make investments in their transmission systems, those costs are passed along to us and other distribution utilities, who in turn deliver that power to the end consumer, which in our case, is you.

Transmission costs are passed along to you

When you review your South Central Power bill, you’ll see a generation and transmission line item, essentially a “pass-through” charge that covers the cost of producing power and moving it across the state or region at the transmission level. When transmission costs increase, those costs are passed on directly to the member, because in the co-op model of business, members are our only means of recovering direct costs. So, as transmission investments are passed along to South Central Power, those costs trickle down and show up on the balance due on your bill.

We control costs where we can

While we don’t have direct control over transmission costs, we are part owners, alongside other electric cooperatives around the state, of Buckeye Power, which is the source of our generation. We’ve made investments to keep generation costs in check while also curbing harmful emissions tremendously over the life of Cardinal Plant’s operations.

We’re entering a new era where we’re seeing costs rise — from inflation and from a scarcity of materials and commodities that translates to increased costs for running a household as well as a business. While the cost of power remains a relative bargain compared to price increases we’ve seen in other industries, cost increases are going to continue to be part of our future. Our job as leaders of your cooperative is to do our best to minimize these cost increases while staying focused on great service and the reliability you’ve come to expect from us.

You can help control the bottom line on your bill

If you’re concerned about cost increases hitting your bottom line, consider visiting our website or speaking to one of our energy advisors to learn how you can curb your energy use at home. The best way to lower your bill is to find opportunities to decrease usage, and one thing I’ve learned is that all of us can find ways to use power more efficiently if we look carefully around our homes.

I hope each of you has a happy and prosperous new year. Stay tuned to this magazine for more on what we’re doing to keep costs in check for you.

Richard Lemonds
President & CEO, South Central Power Company

from the January 2022 issue of Ohio Cooperative Living