Manager’s Message – April 2023

Several months ago, Halifax EMC retained Booth & Associates, LLC to conduct a formal cost-of-service study in order to examine the cooperative’s true cost to deliver energy to your home or business. It has been a number of years since this type of study has been conducted and as the cooperative continues to face rising wholesale power costs, as well as rising cost of materials, we knew it was time to take a look.

There are two main components that make up your electric bill: the cost to generate energy you use and the cost to deliver energy to your home or business. Let’s discuss the first component, rising wholesale power (generation) costs. This cost makes up 54% of your electric bill and is increasing due to new generation and transmission infrastructure and fuel costs. We purchase wholesale electricity from our statewide electric cooperative which has a diverse portfolio of nuclear (56%), natural gas (20%), and a mix of purchases, renewables, coal and hydro (24%).

The second component is the cost to deliver energy to you. These costs are made up of transmission and distribution system improvements, operations, maintenance and administration. Typically, these costs are recovered through a basic facilities charge, which is a fixed cost. Halifax EMC recovers approximately half of those costs through its basic facilities charge and the other half is recovered through the energy charge. Regardless of how much power is used each month by a member, the cooperative must pay operating expenses to maintain the infrastructure that connects homes or businesses to the grid and powers you year-round. A facilities charge ensures that each member is paying their “fair share” to cover these operating expenses for the infrastructure that serves them. This fee was last increased in 2016.

Booth & Associates completed the study and presented it to the Halifax EMC Board of Directors this past February. In the following month of March, per the consultant’s recommendation, the Board approved a 1.61% overall rate increase that takes effect April 1, 2023.

I’m sure we’ve all noticed that we are paying more at the gas pump and the grocery store these days. Just like you, the cooperative is paying more to fuel our vehicles as well as paying more for materials such as utility poles and transformers.
Halifax EMC is a not-for-profit, member-owned cooperative and we strive every day to hold down costs while still providing the reliable, quality service you expect.

So, how will the rate change affect you? The monthly impact of the new electric rates for a Halifax EMC household using an average of 1,000 kWh each month equals $3.41.

Outdoor lighting monthly rates will also increase slightly.

Lastly, the NC Renewable Energy Mandate will now appear on your bill as a monthly credit. Residential accounts will receive a credit of $0.64 and commercial will receive a $2.15 credit.

Your board of directors and staff have worked diligently over recent years to mitigate rising costs while maintaining an excellent level of service and reliability. You can also take an active role in lowering your electric bill. Visit our Energy Tips page for ways to save. If you have questions or comments regarding the rate study, you may contact us at 252-445-5111 or
tellus@halifaxemc.com.