Study shows need for rate adjustment

Person figuring on a calculator
Randy Price
Randy Price

It’s never an easy thing to introduce a rate adjustment, but later this year, your cooperative will be making an adjustment to recover the increasing costs of operation. After our board makes its final considerations and gives approval of the new rate structure, we will provide additional details.

Our not-for-profit business model places the focus on members. We exist to provide a service to our members, not to generate a profit for shareholders. Unfortunately, this doesn’t exempt us from the rising costs of goods, fuel, and other equipment necessary to provide you with reliable service.

If you consider the recent inflation, material shortages, cost hikes, and other industry struggles PPEC is facing, we are sure you can relate. Nearly all sectors have implemented price increases.


Since 2020, material prices are up between 40% and 60% for everyday equipment like wire, poles, transformers, etc. A 50-kilovolt-ampere (KVA) pad-mount transformer alone saw a 72% price jump in the four years since our last work plan.

Coal and commodity prices directly affect the cost of generating electricity. PPEC’s purchase cost has been creeping up. Over the last few years, it’s gone up nearly 16%, or about one cent per kilowatt-hour (kWh) since 2019.

Transmission costs — the cost to transmit power many miles from generation plants to local substations — are surging, with PPEC’s average transmission network demand charges (billed by grid operator PJM) up 72% since 2019. In 2024, transmission costs are estimated to go up 20% — a $1.3 million increase.

Reliable coal and natural gas plants are closing in Ohio and across the region at a faster pace than they can be replaced by renewable energy sources. Of Ohio’s 29 coal plants in 2009, only four remain today. Outages caused by regional grid-related energy shortages will become increasingly common across the U.S., and PPEC is doing all we can to keep power flowing reliably to our members.

Despite these burdens, PPEC has continued to return capital credits each year. In December, we returned $2.5 million to current and former members to show that we are responsible stewards of your capital investment. Because we are not-for-profit and are member-owned, you can rest assured that any margins (known as profits) are invested into the electric system or are allocated to you via capital credits. Since 1935, we have returned more than $34 million to members.


Staff members routinely examine rates to ensure the reliability and long-term financial health of the cooperative. Before implementing a rate increase, your co-op’s staff and board review cost-of-service studies and consider the effects on the membership. As part of this process, we also consult with outside experts to provide accurate and trustworthy recommendations. Power System Engineering, a firm specializing in utility rate design, conducted a cost-of-service study to determine the best options for remaining financially secure while still providing members with safe, reliable, affordable electricity.

A key goal in a cost-of-service study, and in electric rate design, is to ensure fair rates. What does fair mean when it comes to electric rates? It means each member class (residential, small commercial, large commercial, etc.) pays what it actually costs us to provide service. We don’t want one group of members paying exorbitantly more than what it actually costs us to make service available, just so another group of members can pay less than the actual cost.

Material inflation from 2020–2023
Material inflation from 2020–2023

I know that rate adjustments are never pleasant. I hope all member-owners understand that costs go up, but PPEC is doing everything we can to keep rates affordable and your power supply reliable.

We are committed to minimizing the impact of increasing energy costs on your household. We offer energy rebates, free home audits, and appliance analytics through SmartHub, and other calculators and programs designed to help you save.

For more details on this rate adjustment or advice on how you can reduce your electric bill, please follow our website and social media. Our helpful staff is here durning business hours to answer any questions. Don’t hesitate to call us at 800-686-2357.