Following recent news reports about sharply rising electricity costs for customers of many of the investor-owned utilities in Pennsylvania, we have experienced an uptick in inquiries from members who want to know if Claverack’s rates will be going up. 

The short answer is that we do not anticipate significant changes to our electric rates for the remainder of this year, but we expect this extended period of high inflation is likely to impact members’ electric bills in 2023.

For those looking for more detail, please read on….

The Pennsylvania Public Utility Commission announced in early May that the default generation rate for seven of the state’s investor-owned utilities will be increasing anywhere from 16% to 45% beginning June 1. For electric utilities, like virtually every industry, costs have risen dramatically over the past year. While we are doing everything we can here at Claverack to keep costs in check and minimize the impact to our members, as a non-profit electric cooperative we are certainly not immune. 

Your electric bill is made up of two main components: generation/transmission and distribution. 

The generation/transmission (G&T) portion of your bill includes the cost of generating the electricity you use as well as transmitting that electricity along the high-voltage transmission grid from the power plant to your local substation. 

The distribution component of your bill recovers the cost of Claverack’s delivery of electricity from the local substation to your home or business. These costs include employees, poles, lines, trucks and equipment.

Generation/Transmission:

On the generation/transmission side, we are fortunate that a sizeable percentage of the energy supplied by our power supplier, Allegheny Electric Cooperative, comes from Allegheny’s partial ownership of the Susquehanna Steam Electric Station nuclear power plant near Berwick. The nuclear plant supplies nearly 70% of the energy needs of the electric cooperatives in Pennsylvania and New Jersey. The investment in the Susquehanna Steam plant, along with Allegheny’s hydroelectric assets, which include ownership of the Raystown Lake generating station, has resulted in stable rates for cooperative members for many years. The remaining 30% of our power supply is sourced through contracts and market purchases. Allegheny is in the process of negotiating new market contracts for 2023 and beyond. At current market prices, these costs are likely to be higher and could result in an increase to the generation/transmission portion of your electric bill.

Distribution:

In addition to huge increases in fuel costs, we are seeing double-digit percentage increases in the cost of the materials and equipment we use every day. For example, a standard residential transformer has increased by 46%, from $603 to $881, since the spring of 2021, while the price of our standard aluminum overhead primary wire has gone up from 20 cents per foot to 33 cents per foot, a 65% increase.  A new bucket truck now costs tens of thousands more dollars to purchase than it did a couple of years ago. 

We are hopeful some of these costs and supply chain constraints will moderate over the next months.  We’ve been able to hold the line thus far, and we do not anticipate significant rate changes over the remainder of 2022, but as we look forward to 2023, there will likely be impacts to your electric bill. We will be starting a comprehensive rate study later in the year and will keep our members informed of any upcoming rate changes and impacts. 

We know increasing costs are a hardship for us all. Be assured that we will continue to work hard to hold costs down as we deliver a reliable source of power to you.