You could have been as tight-fisted as Ebenezer Scrooge in your Christmas shopping and still dread seeing the mailman stop at your box this month.
It’s not just the Christmas bills, it’s also the IRS Form 1040, the local property tax bill and yes, of course, your local cooperative bill for one of the year’s colder months. You may pull out the budget you have carefully crafted for 2014 and realize that you will start the year in a hole, making it all the more important that your family sort out “wants” from “needs.”
Your neighbors who serve on your local cooperative board or who work at the cooperative must do the same with your co-op’s budget and expenses. They work hard to keep your power bill as low as it can be, but some costs represented in your statement are simply outside their control.
By far the largest portion of their cost to you (nearly 70 percent) is what they pay electricity generators like Santee Cooper and Duke Energy for wholesale electricity. Once the cost of wholesale power and the fixed costs of the electric system infrastructure (wires, poles, substations, etc.) are accounted for, the average cooperative can directly manage less than half of the remaining “local” expenses. That comparatively small share of the bill typically covers things like employees, office expenses and other variable local costs.
Your co-op’s efforts to control expenses do not stop at making every dollar count. It also pushes wholesale power suppliers to control their expenses, advocating for only the necessary amount of generation facilities to be built and pushing generators to negotiate the very best deals for the fuel needed to produce electricity.
Some of our generators’ expenses are driven by state and federal laws, regulations and policies. These costs are much more difficult to control and could go up dramatically in the near future. That’s why your co-op is working with others across the state to keep an eye on two key issues in 2014.
EPA regulations: The Environmental Protection Agency (EPA) is considering limiting or prohibiting the operation of coal-fired power plants, even though the federal government forced generators to shift from natural gas to coal in 1978 with the Power Plant and Industrial Fuel Use Act. The cost to you if your cooperative’s wholesale generators are forced to replace existing coal plants with a 50-50 split of new natural gas and nuclear generation would be a 50 percent increase in your bill.
Distributed generation resources: Solar industry activists and others are pushing for policies that would encourage more distributed generation resources, like solar panels. In a vacuum, most of these policies are laudable. But, if our state does not restructure the way electric providers charge for their service, for every cooperative member who uses distributed generation resources like a solar panel, another member has to pick up his neighbor’s part of the cost of a system built to serve all cooperative members.
These two challenges—EPA regulations and distributed generation resources—are complex and will require South Carolina’s nonprofit electric cooperatives to stay vigilant in the coming year. We are dedicated to finding options and working with all parties willing to help us find fair and affordable solutions.
We’ll keep you posted on our progress in the upcoming months, and we may ask for your help from time to time to make sure officials in Columbia and Washington, D.C., understand that their actions have very real consequences for all South Carolinians.