What is VEC Doing to Keep Energy Rates Low and to Avoid Future Rolling Blackouts?
Throughout the last 10 years, and especially over the most recent three years, we have all seen the impact of inflation and how household costs have been driven higher and higher. During that same period, VEC has maintained its portion of the electric rate, not imposing any local rate increases in over 15 years. Meanwhile, the wholesale rate has increased significantly along with the monthly fuel cost adjustment. VEC understands that the wholesale rate increase has produced hardships for many of our members. For that reason, VEC’s leadership team spends significant amounts of time and energy looking for methods to keep rates low. For example, over the past five years, the cooperative has installed high-capacity generators at 4 of its local service centers and a set of 4MW Tesla batteries inside the Spring City electric substation, all for the express purpose of keeping the wholesale cost as low as possible. During the monthly peak system demand, when power is at its most expensive, VEC deploys the generators and batteries, meaning less power is being purchased and our costs are being minimized. The savings realized month to month from the deployment of these resources are utilized to help offset the need for future local rate increases.
Likewise, VEC leadership routinely meets with our state and federal legislators to discuss energy policy and the needs of the cooperative. Engaging with our elected officials is imperative if the cooperative hopes to keep rates low. Legislation is routinely considered both locally and outside of the valley, that if enacted could have dire consequences as it relates to the electric rate. We must be certain our elected leaders understand the potential for these unintended consequences. We also take time to discuss the needs of the cooperative that may be impacting how we do business. For example, over the past two years, the supply chain for residential and commercial transformers has suffered from the impact of the pandemic. VEC employees have spent significant amounts of time discussing the issue with our legislators in an effort to ease the strain on our electric system. Only today are we finally seeing the results of this labor.
Over the past 12 months, we all came to the same shocking realization, that the power supply within the Tennessee Valley has fallen short of the need. This was never more apparent than it was on December 23 and 24, 2022, when TVA enacted mandatory rolling blackouts across the region. While VEC already had an Emergency Load Curtailment Plan (ELCP) in place, nothing could truly prepare us for that situation expect experiencing it. Today, the cooperative has identified several deficiencies in the ELCP, and we’re working with TVA and other local partners to improve our plan. On May 11, 2023, VEC’s management team participated in an emergency load curtailment tabletop exercise with TVA and other regional local power companies. Based on the lessons learned during the exercise, we are actively working to update our ELCP to improve its effectiveness.
In addition to this, VEC is working to attain federal grant funds to help the cooperative afford additional battery storage systems, like the one installed in Spring City. These batteries, once operational, will help VEC minimize demand on the local electric system during any period of power supply shortfall, and hopefully, minimize the likelihood of needing future rolling blackouts. Additionally, the batteries will also be used to help shorten the duration of localized power outages during routine periods of operation, thereby improving the reliability of the VEC electric system throughout the year.
While many of the issues we face daily seem out of our control, VEC and its leadership constantly look for ways to improve service, keep costs low, and provide the best customer experience possible. We encourage our members to actively engage with the cooperative and communicate their interests and concerns as we prepare for the future. Each year, the cooperative hosts its annual membership meeting in Decatur, on the first Saturday in October. This year, the meeting will be on October 7th at Meigs Middle School, starting at 8am Eastern. All VEC members are invited to attend, to engage with our employees, and to enjoy a morning of food and entertainment. We will also take time to go over the business of the cooperative with our attendees and to discuss the direction the cooperative is headed.