Cullman Electric Announces Rate Change
Unprecedented growth across the Cullman Electric Cooperative service area, combined with the rising costs of operating and maintaining a safe and reliable distribution system, have made it necessary for the co-op to change its rates.
Cullman Electric has received approval from the Tennessee Valley Authority (TVA) to implement a two-part rate increase. Beginning October 1, 2024, the average residential consumer’s bill will go up $5 to $6 per month. The second phase will go into effect in April 2025, and will raise the average residential consumer’s monthly bill $5 to $6.
“These changes are essential for Cullman Electric Cooperative to continue providing the level of service our members deserve and expect,” said Cullman Electric’s board chairman Robert Tidwell. “The primary responsibility of a cooperative is to look out for the best interests of all its members. This is a difficult decision, but one we know is necessary. We have all felt the impact of rising prices over the past several years. The co-op’s management team and employees have worked extremely hard to control expenses, trim budgets and find more efficient ways to serve our members.
“Cullman Electric had one rate increase in the past six years. During that same time, the price has doubled and, in some cases, tripled for many of the supplies and equipment necessary to deliver safe and reliable electricity to all our members. We understand that many people are struggling, and these changes will be implemented in a way that lessens the immediate impact on our members.”
Cullman Electric CEO Tim Culpepper said facing the combination of record-setting growth and price increases has been a challenge. Since 2018, the average cost of essential materials and equipment has increased by 143 percent. During that same time, Cullman Electric has added more than 5,000 new accounts, a 10-percent increase in total consumer accounts. The operations department has seen work orders for new construction and maintenance increase from 5,700 annually to more than 9,000 work orders completed last year.
“Our service area is experiencing growth on a scale we have never seen before,” Culpepper said. “It really exploded six years ago and has not slowed down. During that same time, inflation has driven up the price of materials and equipment like transformers, meters, poles and wire. Meeting the energy needs of our growing community brings with it the additional expense to build and maintain the necessary infrastructure. And the costs associated with operating and maintaining a safe, reliable electric distribution system have also increased.”
Starting in October, the energy charge for residential consumers will go up 1 percent — an increase of approximately $1 to $2 per month on an average residential consumer’s bill. Residential accounts with a standard 200-amp meter will have a $4 increase in the monthly customer charge. For the small percentage of members with a larger home that requires a 400-amp or greater service, the monthly customer charge will increase by $5.
The customer charge is a fixed fee that covers the costs of providing electricity (poles, wire, transformers). The energy charge, also known as the kilowatt hour rate, is a variable fee that differs monthly for each consumer based on the amount of electricity used.
The cost of providing service to a larger home that uses a 400-amp or greater service is more than the cost of serving most homes that have a standard, 200-amp service. The difference in the monthly customer charge ensures that members with a more expensive service pay their fair share regardless of how much electricity they use.
TVA recently announced it is implementing a wholesale power rate increase in October that will impact the average residential consumers bill by $3 to $4 per month. This additional revenue is given to TVA and does not impact Cullman Electric’s bottom line.
The rate change for April includes a 3 percent increase in the energy charge that will cost the average residential consumer $3 to $4 per month, in addition to a $2 increase on the standard residential service customer charge. The 400-amp residential service customer charge will increase by $4.
“During the cold winter months, we all use more electricity in our homes which leads to higher power bills,” Culpepper said. “We didn’t want our members to bare the additional burden of a rate increase this winter, so we made the decision to defer that change until spring when the weather is mild and TVA’s seasonal rates for wholesale power are lower.”
All non-residential, business and commercial accounts will also have base charge and kWh rate increases in October and April.
Cullman Electric Cooperative is a member-owned cooperative serving more than 48,000 member accounts in Cullman, Winston, Lawrence and Morgan counties.