CEC: New rate structure coming this summer

Published 1:47 am Friday, April 5, 2019

Cooperative moving closer to full cost-based rates

The more than 1,400 members of Covington Electric Cooperative who attended Thursday’s annual meeting learned  more about how their power rates will be restructured in the near future.

The cooperative will move further toward fully cost-based rates this summer, CEO, president and general manager Ed Short said. As new technologies lower kilowatt hour usage and there are shifts in fuels based on rapidly advancing technology, the cooperative has to make sure that it recovers its costs, he said.

“The cooperative has certain fixed costs in providing power, regardless of how much electricity a user consumes,” Short said.

The restructuring will also address the franchise tax structure, he said. When Covington Electric provides power inside a municipality, it pays a franchise tax fee to the municipality. At present, those costs are spread across the whole cooperative, but in the future, will only be shared by consumers in the municipality.

More information about changes in the rate structure will be forthcoming in Alabama Living  magazine, he said.

Short said while federal environmental regulations have eased somewhat in the past two years, they still affect the power industry.

“As a result of regulations, PowerSouth will close Lowman Coal Power Plant in October of 2020,” he said.

Covington Electric purchases power from PowerSouth, which plans to replace its coal fired unit with a gas-fired unit. 

Covington Electric Cooperative is celebrating 75 years of service this year, and 

Short said Covington’s is a story of progress.

“It’s a story of you, your grandparents, their neighbors and friends who decided to build a future for their children and grandchildren,” Short said.

“In the 1930s and early 40s, life was hard here, but it was the same throughout rural America,” he said. “People didn’t have much, and they worked hard for what the did have.”

From a cooperative that provided the first electricity for single-bulb lights in the rural areas of the county, Covington Electric has grown to a cooperative serving more than 23,000 meters in six counties.

“We have fulfilled the mission of the founders,” Short said. “Now we must do the work to prepare for an even brighter future.”

As the industry evolves, some CEC members have expressed an interest in solar power, Short said. The CEC board has approved the installation of a solar demo project at the Sanford office.

Members also should look for surveys to determine if there is any interest in a solar garden, and to get an idea of the cost point appetite of CEC members for a broadband service.

“This will determine if it would be feasible for anyone to provide broad band in the unserved areas.”

Short also announced the board has approved $1.7 million in capital credits to be paid to members. Credits of $15 or more will be paid by check and mailed; amounts less than $15 will be credited to active accounts.

This marks the 25th year CEC has paid capital credits, and brings the total paid in the past 10 years to $17.9 million.