My Fellow Members
Effective June 30, 2022, Gulf Coast Electric Cooperative restructured its rates. As your hometown electric cooperative, owned by the members we serve, we understand the impact of a rate adjustment on your households, which is why we have not adjusted our rates in a decade.
You are a valued member of GCEC, so you deserve a high standard of service and dependable electricity at an affordable price. We only consider a rate adjustment when we have no other choice. To maintain the quality, reliability and integrity of the service we provide, it is necessary for us to adjust our pricing structure.
This adjustment is based on numerous factors. As the nation struggles with rising inflation, electric cooperatives around the country face increased costs for the materials necessary to keep the lights on. We are experiencing an unprecedented rise in fuel prices. From May 2021 to May 2022, costs for natural gas to produce the electricity powering our homes and businesses have increased 155%, going up an astounding 32% in one month alone.
Gulf Coast Electric Cooperative buys power from our wholesale power provider, PowerSouth Energy Cooperative. Through a partnership with other electric cooperatives across Alabama and northwest Florida, we secure generating resources from PowerSouth and gain economies of scale that otherwise may not be available. Recently, PowerSouth implemented a rate increase to compensate for an additional 39% increase in fuel and purchased power costs. PowerSouth is seeing the highest sustained prices for fuel we have witnessed in a decade. Global demand, tight fuel supplies, and labor shortages at coal mines and railroads are affecting the cost of producing power. Additionally, we are in the midst of summer—a peak time for electricity use.
Unfortunately, we expect bill impacts to continue to increase through the end of the year. As a result, we must ask all members to share the increased costs Gulf Coast Electric Cooperative will pay for wholesale power.
Our rates have not been adjusted since 2012 and were set based on results of a 2011 costof- service study tied to 2010 costs. In June 2019, we implemented a Storm Cost Recovery Rate Rider to cover expenses incurred from Hurricane Michael that the Federal Emergency Management Agency did not reimburse. We promised the rate rider would be in effect for no more than five years. We believe our members will be pleased to know we eliminated the rate rider two years ahead of schedule. Additionally, we are holding our facility charge steady. These 2 factors will result in a 3% net decrease in the amount of members’ bills.
Rest assured, we are working with PowerSouth to reduce the impact of higher fuel costs and stabilize rates to have the smallest possible impact on you. Because of unpredictability in natural gas prices, PowerSouth adopted a risk management policy to address natural gas price volatility. This includes fuel hedging contracts to help PowerSouth stabilize natural gas price impacts and prevent sudden, major spikes in pricing.
As your electric cooperative, we have a mission to keep the lights on at a cost our members can afford. We take this role seriously, and are responding to market conditions and public policy shifts as best we can.
View all rate information on our Rates & Fees page.
Jimmy Black