York Electric Cooperative combats rising costs
One of our most important jobs is to keep the price of electricity down. We haven’t had a base rate increase in more than 12 years because we’ve trimmed expenses wherever we could. But not everything is in our control. Here are just a few challenges we’re seeing:
Inflation
Inflation isn’t just driving up the price of groceries. Utility poles cost much more than they did a few years ago. The price of electric transformers has soared from $874 in 2019 to $1,360 today. We also carry some of the highest property tax burdens in the counties we serve.
Interest rates also have risen significantly in recent years. To deliver the reliable power you have come to expect, we borrow money to make upgrades to our electric system. Those higher rates have caused our interest expenses to increase.
V.C. Summer and the Cook case
A few years ago, two South Carolina utilities tried and failed to expand the V.C. Summer nuclear power plant. South Carolina’s electric co-ops buy the bulk of our power from one of those utilities, Santee Cooper, and must share in the costs of their capital projects, successful or not.
In the wake of that project’s cancellation, Santee Cooper settled a class-action lawsuit and agreed to a four-year rate freeze that kept our power costs stable. Since then, a series of unfortunate events—including major storms, a fire at a supplier’s coal mine and global events that drove up the price of fuel— have added about $680 million to Santee Cooper’s balance sheet.
Those new expenses will get passed down to their consumers—including our co-op—after the rate freeze ends on Dec. 31. We are negotiating to spread those payments over a longer time, which will soften their impact on power bills.
Energy policy
Recently, the federal government has pushed hard to reduce carbon emissions, requiring power providers to adopt unproven and expensive technologies.
They may have good intentions, but those regulations will make the cost of producing power—and buying it—go up. When it comes to energy policy, we work diligently with our state legislators and congressional representatives to make sure our voices are heard.
What we’re doing about it
York Electric has maintained the lowest controllable expenses in South Carolina, saving our members approximately $14 million in comparison to the median reported controllable expense amount in the state. This is something we track monthly to be sure we are doing all we can to help ease the burden of these new costs.
York Electric is working to determine if a rate change is necessary to provide safe and reliable power in the future. We’ll also continue to offer assistance and innovative programs to help our members save on their energy bills, as well as encouraging you to help hold down power costs through programs like Beat The Peak.
I think it’s important for members to be aware of these challenges. In upcoming columns, I’ll revisit these factors in more detail. There are many important questions still to be answered, but you have my promise that we will be transparent and proactive as we work to keep your power affordable.
President and Chief Executive Officer
