Mike Couick
Mike Couick, CEO of the Electric Cooperatives of South Carolina.
Most of us focus only on the total at the bottom of our electricity bill each month. We pay it and usually think it’s too much no matter how much it is, disregarding the fact that electricity prices have risen far slower than most other things we buy. This month, I want to mention two issues that have an impact on that monthly total and explain why you should be concerned.
Captive and paying the price
The cost of shipping coal to power plants affects your electricity bill. More than 80 percent of the electricity you as a cooperative member use is produced using coal as a power plant fuel. That coal arrives by freight train from Illinois and Central Appalachian states such as Kentucky and West Virginia.
CSX Corporation owns all the railroad tracks.
Negotiations for preferred shipping rates can be challenging. When you use coal by the ton (10 to 12 million tons per year for Santee Cooper), and it has to be shipped by train, and one company owns the tracks, you become what we call a “captive shipper.” Santee Cooper generates much of the power we provide to you, and as their shipping contracts with the railroad expire, Santee Cooper and your electric cooperative are facing increased costs.
The good news is that Santee Cooper was able to negotiate a contract that will save about $180 million over the next five years compared to what was projected. The bad news is that delivery costs in 2011 and 2012 will be higher than what was budgeted.
Captive shippers such as electric cooperatives have no antitrust protections against unrestrained shipping costs and unreliable service. The resulting cost increases are passed on to consumers who buy their products and use their services. While the major railroad companies log record profits and stock prices on Wall Street, delays in coal deliveries have caused higher electricity prices on Main Street.
I urge you as a member to express concern to your national legislators. Ask them to look out for your cooperative on this issue.
Protecting the environment costs money
Have you ever noticed how many costs are itemized on your telephone bill? Taxes, fees and charges galore add up to significant money in addition to the price attributed to your actual phone service.
My bill has a long list: municipal business license tax, federal universal service fee, federal subscriber line charge, local universal service charge, intrastate universal service charge, federal excise tax, state/local tax, telecommunications relay service, emergency service preparation, federal universal service fund fee, S.C. universal service cost recovery fee and a carrier cost recovery fee. Whew!
On a simple $49 land-line phone and Internet service bill, those extras total $13.44.
The phone company chooses to list them to make a point: there are a lot of tacked-on charges the phone company didn’t choose to add but that were required by various laws and regulations.
Your electric cooperative has its share of those types of costs, primarily in the form of what we must pay to comply with an expanding number of rules and regulations promulgated by the U.S. Environmental Protection Agency. We usually don’t itemize these costs, but they can be significant.
Regardless of whether you agree with the end goal of EPA regulations—ostensibly cleaner air, water and land—the bottom line is that they have a very real cost that can drive up your electricity bill. South Carolina’s electric co-ops are committed to providing you reliable and affordable power, which is why we continue to promote energy efficiency and explore the cleanest, most cost-effective alternatives to meet the state’s growing power needs. In the meantime, we can’t ignore federal and state regulations, but we can (and will) keep you informed on how they impact your personal bottom line.