After much deliberation and analyzing results from our 2023 Cost-of-Service Study, the PPEC Board of Directors has approved a rate adjustment taking effect on the electric bill you’ll receive in May (due in June). If you consider the recent inflation, material shortages, and other industry struggles PPEC faces, you may be able to relate. 

Over the last few years, average equipment costs have increased for us between 40-60%. See the graphic below. As a not-for-profit co-op, we operate at-cost, so you can rest assured this is in the best long-term interest of the cooperative.

Nearly all sectors (and neighboring utilities) have implemented rate increases, and your cooperative has waited as long as possible before making this decision, to minimize the impact on you, our members. Our last rate increase was in 2018. 

Each rate class will see different impacts. The average residential member using 1,200 kilowatt-hours (kWh) a month will see an average monthly increase of $26.45. 

Here’s the average residential member breakdown:

• The monthly service charge is increasing $6.50 (from $35 to $41.50 per month). This covers the fixed costs PPEC has to ensure reliable power is available to you 24/7/365, through wires, poles, transformers, and other equipment, plus maintenance, taxes, etc. 
• The distribution energy charge is increasing just over a ½ cent (from 1.9 cents to 2.5 cents per kWh). This is the cost to bring electricity from our substation to your home. 
• The Generation and Transmission Charge is increasing 2.3 cents (from about 8.1 cents per kWh to 10.4 cents per kWh). This is the cost to produce electricity and transport it from a generation facility (like a power plant) to our local substations. This includes the current Wholesale Power Cost Adjustment (WPCA), which reflects the fuel, transmission, and demand costs passed on to PPEC from Buckeye Power, our wholesale power supplier. Once the WPCA is rolled into the G&T charge, this will set a new base for the power cost adjustment moving forward.
  • Note: The WPCA varies month to month and will continue increasing due to rising power generation and transmission costs. Members can help us manage this charge by joining our load management program and conserving energy during peak alerts.
• For those with an outdoor light, the cost per month is increasing 68 cents (from $10.80 per month to $11.48 per month).

Tune in to our annual meeting for details
On Saturday morning, March 23, at 10 am, please plan to view our annual meeting broadcast, where I’ll discuss the rate adjustment in greater detail, on Facebook, YouTube, or online at www.PPEC.coop. We are giving away $1,000 in bill credits; those who tune in and comment on the broadcast will be entered to win. If you are unable to attend live, you can watch the recording of the meeting that will be posted on our website afterward. 

Electric rate design: Fair for all members
Our 2023 cost-of-service study provided detailed information on what it costs us to make service available to different member groups. A primary goal of electric rate design is limiting or reducing the subsidies between different rate groups. 

We don’t want one group of members (e.g., commercial) paying more than what it actually costs us to make service available, just so another group of members (e.g., residential) can pay less than the cost of service. This rate change will help to limit those subsidies from occurring and ensure that each member group pays what it actually costs the cooperative to make service available.

Within each rate group, different members will see different levels of impact depending on their electric use. Low-use members will see the majority of the increase in the service charge. 

Why is there a service charge?
The service charge has been $35 per month since 2022. It will increase to $41.50 per month. 

The reason for this is that most of the costs we pay to build, operate, and maintain a reliable electric system are fixed. Whether you use 1 kWh or 1,000 kWh, we still have to build, operate, and maintain the same amount of equipment and back-office support. The service charge is going up to better align with the member-related fixed costs that are also going up.

The value of electricity
Even after the upcoming increase, our average residential member’s daily cost for electricity is less than $7 – less than a medium pizza. Think of all the ways electricity improves your life: TV, phones, computers, ovens, microwaves, laundry, heating, and lighting. The list is too long to describe. I’d say all of that is a greater value than a medium pizza…. Wouldn’t you?

Our last distribution rate increase was in 2018, so this upcoming increase averages out to 1.6% per year over that timeframe. In 2022, inflation averaged 8%; in 2023, it was 4.1%.

Please note that as a member-owned, not-for-profit co-op, maintaining dependable service at the most affordable price remains the cornerstone of our business model. This will never change.

If you have questions regarding the increase or would like advice on ways you can reduce your electric bill, please give our office a call at 800-686-2357. Our Energy Advisor, Peter Niagu, is happy to offer recommendations based on your home circumstances. 

Please continue to take advantage of our load management programs to help manage our power supply costs and our energy efficiency rebates, free home energy audits, energy calculators, and usage monitoring alerts available through your SmartHub account to help you save.

COMING SOON:
New SmartHub feature to help you save
Home Energy Analytics will be coming this spring for SmartHub users, offering energy breakdowns for various appliances in your house. Projected bill estimations and savings tips will help members reduce usage where it matters most. Please make sure you are enrolled in SmartHub to take advantage of this new feature by clicking here.