Working Hard to Keep Rates Stable
Every time I visit the grocery store or fill up a vehicle with fuel, just like you, I feel the pinch of rising prices.
Here at Orange County REMC, we’re working hard to minimize electric rate increases. It has been a challenge, as global costs began to increase dramatically at the end of 2021 due to inflation, supply chain issues and the war in Ukraine. Coal prices have increased 300% since 2021 and natural gas prices have gone up more than 100%, although we have seen a small decrease in natural gas prices very recently. These factors have resulted in an increase of more than 175% in wholesale power prices.
Orange County REMC is a distribution co-op, which means we purchase electricity from Hoosier Energy, a generation and transmission co-op. We then distribute this power to you, our members. Even considering the recent investments Hoosier Energy has made in wind and solar generation, coal and natural gas represent more than half of their annual operating costs. Similarly, more than 69% of Orange County REMC’s operating cost consists of purchasing this power to deliver to our members. To help manage price volatility, Hoosier Energy charges Orange County REMC a Power Cost Adjustment, which is part of the charges billed to the member. If you have been tracking your bills, you will notice the PCA has increased over the past few months. Despite all of this, Orange County REMC’s residential rate of 14.2 cents per kWh remains below the national and state averages.
This fact is even more impressive when you consider that as a rural electric co-op, we have far fewer members per mile of line than other electric utilities.
One thing that will make a big difference for Orange County REMC going forward is the positive impact our telecommunications business, Orange County Fiber, is having on the co-op’s financial health. The growth of Orange County Fiber resulted in a positive margin in 2022 which is being used to offset costs for our members. It is expected that Orange County Fiber will continue to make a positive financial impact for our members in the future while also providing an improved quality of life as more of our members are connected to a world-class fiber optic network.
In the coming months, you will have a chance to review our Annual Report and hear more details about how business and operating decisions are made at the REMC. I encourage you to mark your calendar and plan to attend the Orange County REMC Annual Meeting June 2. Learn more about the Annual Meeting.