After more than a decade of maintaining the same rate schedule, Community Electric Cooperative will implement a modest rate adjustment this fall—our first schedule change since 2012. On average, members can expect to see an increase of 4 percent, which amounts to approximately $8–$10 more per month for a typical residential household. In comparison, the U.S. Bureau of Labor Statistics reported that, in April, electricity prices increased 3.6 percent over the past year alone.
“For years, we’ve held off making changes by cutting costs where possible and maximizing efficiency. But the reality is this: the cost of delivering reliable, safe power has risen significantly—and the numbers speak for themselves. While no one welcomes higher bills, this difficult decision was made by CEC’s leadership team and Board of Directors with great care,” says CEC President and CEO Steven Harmon.
From transformers and poles to wire and hardware, the prices of essential materials have surged.
The price of transformers – the equipment that changes the voltage of electricity supplied to households—has risen 108 percent over the past four years. The cost of utility poles has jumped 91 percent over the same period. The cost of primary wire in the distribution system has shot up nearly 200 percent.
“We know you’ve felt similar pressures at the grocery store, the gas pump, and even in back-to-school shopping. Our cooperative isn’t immune to these same economic forces,” Harmon said. “This small adjustment allows us to keep pace with inflation, maintain infrastructure, respond to outages quickly, and invest in system improvements that ensure long-term reliability. Most importantly, because Community Electric Cooperative is a not-for-profit utility owned by the members we serve, every dollar goes back into maintaining and improving your service—not into shareholders’ pockets.”
CEC has six different classifications—or rate schedules—for the electricity that it delivers.
- Residential Service
- Church Service
- General Service
- Intermediate General Service
- Large Power Service, and
- Outdoor Lighting Service.
“Earlier this decade, we adjusted the monthly base facility charge that all members pay to create a fairer billing structure,” Harmon explained. “However, we haven’t made a comprehensive rate adjustment across all service classifications in more than thirteen years. This update is necessary to keep up with rising costs and to maintain the infrastructure needed to ensure system reliability and the safety of both our members and employees.”
Monthly residential bills are based primarily upon these elements:
- the base facility charge, which does not change month to month
- an energy delivery charge, which varies based upon usage, and
- a generation and transmission charge, which varies based upon usage
Members are encouraged to look for ways that they can reduce their energy use, particularly during periods of high demand, to minimize the impact of the rate adjustment. In the “Energy Solutions” section of its website, CEC has a page devoted to ways that members can “Beat the Peak” of high energy use. In addition, by downloading the SmartHub app, members can track their energy use in real time from their phone. CEC’s website also has an Energy Usage Calculator that enables members to see how appliances, lighting, and heating/cooling contribute to their monthly bill.
The specific details of the rate adjustment will not be finalized until the fall, Harmon noted.
“As always, we’re here to answer your questions. Transparency and accountability are part of who we are, and when we know the precise amount of the adjustment, we will share it with you. We remain dedicated to keeping our rates as low as possible while continuing to provide the exceptional service and reliability our members deserve.”
Several factors are converging to drive material and equipment prices higher throughout the electric sector. They include inflation, supply chain disruptions, labor shortages and global demand. In addition to the equipment cited earlier, here are additional examples of rising cost pressures:
- Insulators, up 71 percent over the past four years
- Crossarms, up 69 percent
- Surge arrestors, up 59 percent
- Secondary wire, up 43 percent
Labor and fuel expenses also have increased industrywide, making construction, maintenance and restoration more expensive, Harmon said.
To offset rising costs, CEC and other electric cooperatives nationally are pursuing a variety of measures. These include bulk ordering materials when prices are low; maintaining long-term vendor relations to get the best deals possible; monitoring usage and supply chains to reduce waste and delays; and investing in long-term infrastructure upgrades.
On the revenue side of the ledger, Community Electric’s members benefit from the cooperative’s wholly owned subsidiary, RECORE Energy. RECORE is a trusted provider of standby generators, and its growing sales to businesses and homeowners across the Mid-Atlantic region generates additional income for CEC, reducing the financial pressure on our members.
