Rate Increase Now Effective

The rate increase recently approved by the Albemarle EMC Board of Directors is now effective.

The Albemarle EMC Board of Directors recently approved an increase in the rates, following a recommendation from an independent consulting firm that specializes in rate analysis. Co-op management proposed adopting the consulting firm's recommendation, which was approved by the board of directors at their Jan. 28th meeting. The new rates will go into effect May 1 and are anticipated to increase the cooperative's overall revenue by approximately 4.47 percent. While the individual rate classes may vary from the overall increase percentage, a monthly residential bill of $109.97 for 1,000 KWhs will increase by $7.26 under the new rates.

The rate study was commissioned after co-op management recognized that an increase in rates would be necessary to maintain the long-term financial integrity of the cooperative. Reasons for the need to increase rates are threefold: Installation of additional capital-intensive infrastructure (substations, transmission lines, etc.) is needed to keep up with the growth in its service area. Material costs such as steel, copper and concrete are at historical highs. And the cost of the power the cooperative purchases for its members has continued to rise since the cooperative's last rate increase.

To provide its members with electricity at the lowest possible cost, Albemarle EMC, along with many of the other electric cooperatives in North Carolina, belong to the North Carolina Electric Membership Corporation (NCEMC). NCEMC negotiates with regional power producers to purchase wholesale electricity in bulk for its member cooperatives. The cost of all of the components necessary to get the electricity to members (lines, poles, transformers, bucket trucks, personnel, operating margins, etc.) is added to the wholesale electric rate to develop the cooperative's retail rate. Albemarle EMC is a nonprofit business, so retail rates are set just high enough to meet the cooperative's financial goals. Since Albemarle EMC is a cooperative, any margins the cooperative earns are later returned to the members in the form of capital credits.

"We feel this rate increase will keep Albemarle EMC on strong footing," said Brad Furr, general manager of Albemarle EMC. "It is vital to the co-op's sustainability that rates accurately reflect operational costs."