Electric rates for customers of AEP and AES (two of Ohio’s investor-owned utilities) have been increasing by significant double-digit percentages.
Their rates are higher than those of Ohio's electric cooperatives, and the gap continues to widen.
A main reason cited for their rate increases is the high price of electricity caused by high demand and limited supply. They’re also starting to invest more in electric reliability.
Some of you might be thinking, “Wait a minute. I see ads promoting 8 cents a kilowatt hour for AEP, or AES!” That’s not their total rate. That is only the generation portion of the electric bill. To make a valid comparison, you have to include their distribution cost and transmission costs. Their total rate is higher than ours.
Members of Ohio's electric cooperatives have been protected from the power market price volatility because we, as cooperatives, operate on a different business model.
Investor-owned utilities like AEP and AES don’t generate electricity anymore. Instead, they purchase it through an auction by the regional transmission organization that manages the electric grid for Ohio and 12 surrounding states. Because of surging demand — including ever-growing usage from data centers — and decreased generation — exacerbated by the premature retirement of fossil-fuel power plants — wholesale power market prices have been rising steeply. The local investor-owned utilities pass through these price increases to their customers, resulting in higher rates for those on their standard service plan.
Electric cooperatives are insulated from this level of market volatility because we do not participate in electricity auctions. Not only are we member-owned and not-for-profit, but we are a part-owner (along with Ohio’s other electric co-ops) of Buckeye Power, which generates and transmits the electricity that powers our co-ops. Ohio’s electric cooperatives, through Buckeye Power, generate all of our members’ electricity needs. Buckeye Power’s generation facilities include the coal-fired Cardinal Power Plant; the Mone and Greenville natural gas plants; and various solar arrays. We also receive hydropower from upstate New York, renewable energy from biogas, and methane from livestock farms and landfills.
Owning our own generation allows cooperatives to maintain stable rates for our members.
Buckeye Power produces more than enough power for the 1 million Ohioans who rely on it. In fact, Buckeye Power sells any excess power it produces. The revenue earned helps to offset the rising costs of fuel, transportation, and supplies — and some is returned to local distribution co-ops as patronage capital. As a result, co-op members benefit.
Electric cooperative members can rest assured that your co-op will always keep your rates as low as possible while maintaining the cooperative’s financial health and providing the reliable electricity you need and expect.
