SCC stipulations from 2010 sale help keep local electric rates low

Posted: January 5, 2013

The Winchester Star

WINCHESTER — Local electricity rates are among the lowest in the state.

The Shenandoah Valley and Rappahannock electric cooperatives charge their customers in Winchester and Frederick and Clarke counties $97.59 and $98.33, respectively, for each 1,000 kilowatt-hours.

A kilowatt-hour is equal to the energy delivered by the flow of one kilowatt of electrical power for one hour. For example, a 100-watt bulb burning for 10 hours will use one kilowatt-hour of energy.

The rates constitute the lowest of the 12 cooperatives in the state, according to recently released data from the State Corporation Commission.

Of the three investor-owned utilities in Virginia, only Old Dominion — a unit of Kentucky Utilities serving five Southwest Virginia counties — has a lower rate.

Customers in Winchester and Frederick and Clarke counties have benefited from SCC stipulations put in place when the two co-ops acquired portions of Allegheny Power’s service territory in June 2010.

Under the agreement, Potomac Edison — which operated Allegheny Power — was required to contribute $62.5 million between the time of acquisition and July 1, 2014, to help keep rates low.

Additionally, SVEC, which serves Winchester and Frederick County and a small portion of Clarke, and REC, which serves Clarke and Frederick, cannot raise base rates on former Allegheny customers until July 1, 2014.

The co-ops can adjust rates based on the wholesale prices of electricity, which make up about 75 to 80 percent of a member’s bill, said Mike Aulgur, SVEC manager of external affairs.

Wholesale adjustments have led to slightly higher rates since June 2010.

Allegheny customers were paying $94.12 per 1,000 kilowatt-hour before the cooperatives took over.

The Shenandoah Valley and Rappahannock electric cooperatives purchase the majority of their electricity from Old Dominion Electric Cooperative.

Although the base rates have increased for the Winchester area, they remain lower than cooperatives’ territory outside the former Allegheny area.

SVEC’s service area prior to the Allegheny acquisition was portions of Shenandoah, Rockingham and Augusta counties, totaling about 39,000 members.

Rates there were $109.23 as of July — a 5 percent decrease from July 2007 — according to the SCC report.

REC’s territory outside the Allegheny-acquired portions of Frederick and Clarke counties is comprised of all or part of 20 other Virginia counties. Rates there were $123.43 as of July, a 3.3 percent decrease over the past five years.

Once the base rate cap is lifted on July 1, 2014, REC and SVEC will be able to raise base rates in the former Allegheny territory by no more than 5 percent annually until 2017.

— Contact Conor Gallagher at cgallagher@winchesterstar.com