By Randy Price, President & CEO
It's never an easy thing to introduce a rate adjustment, but this spring, your cooperative will be making an adjustment to recover the increasing costs of operation. After our board makes its final considerations and gives approval of the new rate structure, we will provide additional details.
Our not-for-profit business model places the focus on members. We exist to provide a service to our members, not to generate a profit for shareholders. Unfortunately, this doesn't exempt us from the rising costs of goods, fuel, and other equipment necessary to provide you with reliable service.
If you consider the recent inflation, material shortages, cost hikes, and other industry struggles PPEC is facing, we are sure you can relate. Nearly all sectors have implemented price increases.
Providing a reliable source of power is getting harder to do these days. Why?
- Since 2020, material prices are up between 40% and 60% for everyday equipment like wire, poles, transformers, etc. A 50-kilovolt-ampere (KVA) padmount transformer alone saw a 72% price jump in the four years since our last work plan.
- Coal and commodity prices directly affect the cost of generating electricity. PPEC's purchase cost has been creeping up; over the last few years, it's gone up nearly 16%, or about 1 cent per kilowatt-hour (kWh) since 2019.
- Transmission costs - the cost to transmit power many miles from generation plants to local substations - are surging, with PPEC's average transmission network demand charges (billed by grid operator PJM) up 72% since 2019. In 2024, transmission costs are estimated to go up 20% - a $1.3 million increase
- Reliable coal and natural gas plants are closing in Ohio and across the region at a faster pace than they can be replaced by renewable energy sources. Of Ohio's 29 coal plants in 2009, only four remain today. Outages caused by regional grid-related energy shortages will become increasing common across the US, and PPEC is doing all we can to keep power flowing reliably to our members.
Despite these burdens, PPEC has continued to return capital credits each year; in December, we returned $2.5 milion to current and former members to show that we are responsible stewards of your capital investment. Because we are not-for-profit and member-owned, you can rest assured that any margins (known as profits) are invested into the electric system or allocated to you via capital credits. Since 1935, we have returned more than $34 million to members.
Cost-of-service study finding
Staff members routinely examine rates to ensure the reliability and long-term financial health of the cooperative. Before implementing a rate increase, your co-op's staff and board review cost-of-service studies and consider the effects on the membership. As part of this process, accurate and trustworthy recommendations. Power System Engineering, a firm specializing in utility rate design, conducted a cost-of-service study to determine the best options for remaining financially secure while still providing members with safe, reliable, and affordable electricity. 
A key goal in a cost-of-service study and in electric rate design is to ensure fair rates. What does fair mean when it comes to electric rates? It means each member class (residential, small commercial, large commercial, etc.) pays what is actually costs us to provide service. We don't want one group of members paying exorbitantly more than what actually costs us to make service available just so another group of members can pay less than the actual cost
I know that rate adjustments are never pleasant. I hope all member-owners understand that costs go up, but PPEC is doing everything we can to keep rates affordable and your power supply reliable.
We are committed to minimizing the impact of increasing energy on your household. We offer energy rebates, free home audits, and appliance analytics through SmartHub, and other calculators and programs designed to help your save.
For more details on this rate adjustment or advice on how you can reduce your electric pill, please follow our social media. Our helpful staff is here Monday through Friday from 7:30 a.m. to 4 p.m. to answer any questions you may have. Don't hesitate to call us at 800-586-2357.