Rising Wholesale Power Cost Leads to 1 1/2 Percent Increase on Member Bills
Average member bill will see an additional $2 monthly beginning October 2024
LENOIR, NC (August 21, 2024) ⇒ Rising wholesale power and materials costs are driving the need for a rate adjustment that will impact the average member bill by 1 ½ percent, or $2 for the typical member using 1,000 kWh monthly, effective in October.
Blue Ridge Energy’s Board of Directors approved the adjustment after conducting a cost-of-service study reviewing the impact of wholesale power and other cost increases.
Explaining the need for the rate adjustment, Chief Executive Officer Doug Johnson said: “In the past few years, the cost of wholesale power has increased by 12 percent, which equates to a financial impact in the millions for the cooperative. The increases are largely driven by governmental policies that are forcing retirements of coal-fired power plants without adequate replacements already online – policies that are going too far, too fast,” he continued. “Layered on top of this shift in the energy market are sharply rising costs for materials and services needed to provide reliable electricity for members.”
For example, in recent years prices for power poles have increased nearly 50 percent. Transformer prices rose by 85 percent. And the price of bucket trucks has risen 72 percent. Labor for right of way maintenance has increased by $3 million in just one year.
Because of rising wholesale power cost, the cooperative began implementing a wholesale power cost adjustment (WPCA) in February of 2023 of $9 per 1,000 kWh monthly on member bills. A WPCA is a method used by utilities to recover what can be temporary increases or decreases in power cost. Since wholesale power cost has remained at the higher levels since that time, the WPCA will be included in the base rate going forward. Therefore, members will no longer see the current WPCA as a separate line item listed on their bills starting in October. The additional 1 ½ percent increase will help fully recover sustained, rising wholesale power cost.
It will be important to continue cost control and reduction efforts, Johnson said. In addition to efforts to work with state and federal elected officials regarding energy policy to maintain affordable and reliable electricity, he highlighted other efforts by the cooperative. “We’ve been able to shield members from the extreme rising costs we’ve experienced over the past few years thanks to internal efforts that trimmed operating costs,” he said. “A huge help has also been the cooperative’s propane and fuels and dark fiber subsidiary companies,” he added, explaining the subsidiaries have contributed several million dollars from their excess cash to offset rising costs and hold down the impact to members.
“Unfortunately, the impact year over year of rising costs make it extremely difficult to overcome,” he added. “Our commitment is always to provide the lowest cost electricity possible for the most reliable service and we will continue working to provide that to our members,” Johnson said.
Members can help offset rising costs by taking energy efficiency steps. Blue Energy Ridge members can get customized energy efficiency tips, energy savings ideas and other tools and programs available at www.BlueRidgeEnergy.com.
Look for more details on the rate adjustment in the September member newsletter, Membership Matters, inside Carolina Country magazine sent to all members.
Blue Ridge Energy is a not-for-profit electric cooperative serving some 80,000 member-owners in Caldwell, Watauga, Ashe, and Alleghany counties as well as parts of Avery, Alexander and Wilkes counties.
