The service charge: The cost for keeping the lights on

Posted on Mar 18 2024 in Paulding-Putnam Electric Cooperative

As a cooperative member of Paulding Putnam Electric Cooperative, you make an investment in the co-op every time you pay your bill. This collective investment in the co-op benefits you and the community immediately — and over time. 

This cost exists even when no electricity is used. We are still required to pay our loans, insurance, and taxes; fund building and fleet maintenance; and, most importantly, maintain our system equipment so your lights will turn on when you need them. 

Regardless of how much electricity a particular family uses, the cost of delivering power to that house is the same. The service availability charge represents the fixed costs such as poles, wire, and transformers needed to provide service to each member. As a not-for-profit electric cooperative, we believe most of our operational costs should be spread fairly across all our members. 

Large utilities like I&M and AEP also have service availability charges, but theirs are typically lower due to the characteristics of the areas they serve. Large utilities serve more than four times as many customers per mile as we serve. This allows utilities to spread similar fixed costs over a much larger customer base. For example, large utilities typically build a mile of distribution line and serve, on average, 30 customers. Due to the rural nature of many PPEC distribution lines, your cooperative has fewer than seven members served per mile of line. 

Overall, all members benefit from the same service. Your monthly investment ensures you have access to safe, reliable, and affordable power when you need it.