Cullman Electric Announces Rate Change

In an effort to maintain Cullman Electric Cooperative’s standard for reliable electricity and outstanding service, the co-op board of trustees has approved a rate change effective April 1, 2023.

The monthly customer charge for residential members will increase by $4. A small increase to the kilowatt-hour charge will result in the average residential consumer seeing a $1 increase in the monthly energy charge. The customer charge is a fixed fee that covers the costs of providing electricity (poles, wire, transformers), while the energy charge is a variable fee that differs monthly for each consumer based on the amount of electricity they use.

Small business and commercial accounts in the GSA2 class will see a $10 increase in the monthly customer charge, while all non-residential accounts — small business, commercial, industrial, and outdoor lighting — will have small increases of less than one-half cent per kilowatt hour.

Cullman Electric CEO Tim Culpepper said the board of trustees has worked closely with the management team to control costs, allowing the co-op to avoid this difficult decision for several years despite supply chain issues and inflation that have impacted the entire industry.

“The cost of providing electrical service has increased significantly over the past five years,” Culpepper said. “This rate increase is related to the rising cost of providing service to our members — the poles, wires, transformers, meters, and other materials the co-op needs in order to deliver electricity to our members’ homes and businesses.”

Robert Tidwell, chairman of the Cullman Electric board of trustees, said the rate change will provide stability for the co-op.

“As a not-for-profit business, we aim to provide service at the lowest possible price to our members,” Tidwell said. “The co-op must generate enough revenue to cover costs of providing service, and have money available to cover the cost of maintenance and upgrades that will keep our service reliable and affordable in the future. As a co-op, our mission is to enhance the quality of life in our community and look after its long-term interests. We love serving our members and our local community, and just like you, want to see it continue to thrive.”

Inflation and supply chain limitations are impacting every business and industry, and Cullman Electric is no exception. Some materials for building power lines and substations have more than doubled in price over the past five years.

“Essential supplies for providing electricity are taking longer to get,” Culpepper said. “The lead time to order and receive transformers has gone from several months up to a year or more. These issues are the same reason we are seeing price increases at the grocery store and why some of our favorite items aren’t on the shelf or are in limited supply.”

The new rates will generate approximately $3.8 million in additional annual revenue.

“The co-op is in good financial shape, and that has allowed it to operate without a rate increase for the past five years despite major increases in many of the costs associated with providing electricity,” Culpepper said. “This additional revenue is needed to ensure Cullman Electric is able to continue providing all of its members with safe, affordable, reliable electricity.”