It's not going to the grocery store that I’ve come to dislike. It’s leaving, when I find out how much it costs to purchase a few bags of essentials.
Costs have risen for everything. We’re experiencing it at Broad River Electric Cooperative, too.
One of our most important jobs is to keep the price of electricity down. We haven’t had a base rate increase since 2009 because we’ve trimmed expenses and saved money wherever we could. But not everything is in our control. Here are a few challenges we’re seeing:
Inflation
Inflation isn’t just driving up the price of groceries. Utility poles cost 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 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 be 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 to reduce carbon emissions, requiring power providers to adopt unproven, and expensive technologies.
Those regulations will make the cost of producing power—and buying it—go up. With 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
Our co-op has avoided raising rates because we do everything we can to keep costs down. In anticipation of these challenges, we’ve reduced expenses to help ease the burden of these new costs.
Broad River Electric’s recent transition to a new rate structure is one of those cost-saving measures. One of the drivers of our costs is the amount of energy we use when electricity demand in South Carolina is at its peak. When members shift heavy energy use to off-peak hours, it helps reduce Broad River Electric’s share of the peak demand.
This helps members save money and reduces our overall costs.
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 & CEO