Electric Rates Set to Rise in October 2023
Members of Southwest Tennessee EMC should expect to see an increase in their electric bills beginning in October. Our average residential consumer-member will pay around $10.10 per month more for energy.
As a consumer-owned cooperative, we want to speak plainly with you about this change in our rates. There are two main factors that led to this increase.
The Tennessee Valley Authority recently announced a 4.5% increase to the base wholesale rates it charges Southwest Tennessee EMC for energy. The amount of increase residents of STEMC will see on their retail bill is 2.72%. The need to construct new power plants, inflation and higher interest rates were some of the reasons the TVA board elected to increase prices. STEMC purchases all our energy from TVA, so this increase means that we will pay $3.5 million a year more for energy than we have in the past. This accounts for $4.43 of the $10.10 increase.
Finally, Southwest Tennessee EMC will also implement a 3.4% local rate adjustment. In addition to the rate we pay TVA for energy, many of our expenses have risen dramatically in the last few years. Transformers that were $700 just a few years ago now cost $1,790, and a spool of wire that very recently cost $5,760 is now $9,925. These are just a few examples of the higher costs associated with maintaining your electric system. Though we have worked for some time to lower expenses and find other savings, we have reached the point where a local rate adjustment is necessary. This is the first local rate adjustment that STEMC has implemented since 2018. This accounts for $5.67 of the $10.10 increase.
It is important to put these changes into context. Even with the increase, STEMC rates remain 26% below the national average. In June, the national average price for residential energy was 17.0 cents per kilowatt-hour, about 5 cents higher than STEMC’s average residential cost, even with the rate increase.
National averages aside, we understand that this will have very real impacts on families and businesses in our communities. We believe it is important to be upfront with you about these rate increases, and we invite you to reach out to us with any questions.
While our rates might change from time to time, one thing remains the same: We are committed to acting in the best interests of our consumers. We are making smart investments in the power grid to ensure that our communities have the energy you need, today and tomorrow. The team at Southwest Tennessee EMC remains focused on providing you with safe, reliable and affordable energy, and that is something you can count on.