Palmetto Electric to increase monthly fee in Beaufort County

tbarton@islandpacket.comSeptember 17, 2012 

Palmetto Electric Cooperative customers will pay an extra $4 a month beginning Oct. 1, regardless of the amount of electricity they use.

The coop recently announced its fixed, monthly facility charge will increase from $12 to $16. The charge last increased from $8 in 2008.

Palmetto Electric says the increase is needed to more fairly recover the cooperative's fixed costs for delivering electricity to its members.

"This change will not completely recover these costs, but it is a move toward a fairer recovering of fixed costs," spokesman Jim Baker wrote in response to an Island Packet email.

Palmetto's fixed costs include equipment -- such as poles, transformers, meters, substations and other "hardware" -- as well as costs associated with accounting, customer service, linemen, taxes, and maintenance, Baker said.

The cooperative conducted a cost-of-service study in 2008 that concluded it should be charging $24 a month to recover costs for delivering power.

"Rather than implement the entire increase at one time, our board decided to phase-in the increase," Baker wrote.

No further increases currently are planned, he said.

"This is something that will be monitored on an ongoing basis, along with other factors impacting our charges," Baker said.

Palmetto Electric is a nonprofit, member-owned distribution cooperative that purchases power generated by Santee Cooper, a state-owned utility. Palmetto Electric's wholesale power costs represent about two-thirds of its total charges, according to its website.

The 20 electric cooperatives in South Carolina are not under the jurisdiction of the S.C. Public Service Commission, which regulates rate increases among utilities. Each cooperative is governed by a locally elected board of directors, which is responsible for approving all rate increases.

The cooperative serves more than 67,000 customers in southern Beaufort, Jasper and Hampton counties.

Baker said Palmetto Electric has been dipping into reserves to absorb costs the coop had been undercharging for, but can no longer do so.

"We need to maintain those operating margins to be sound financially," he said. "We need to bring the charge up to what it needs to be to reflect the cost of serving those facilities. And, as a member-owned cooperative, the only way for us to recoup those expenses is to go to our members."

Related content

  1. Palmetto Electric Cooperative
  2. The Electric Cooperatives of South Carolina

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