As an electric distribution cooperative, Oconee EMC does not generate electric power, but purchases it from wholesale power suppliers. More than half of Oconee EMC's purchased power generation mix comes from natural gas. Natural gas prices are currently at a 14-year high, up 525 percent since June 2020. Besides other factors, inflation is also impacting natural gas prices.
WHERE YOUR POWER COMES FROM
Most electricity – more than 60 percent in Georgia and 38 percent nationwide – is now generated by natural gas. Not that long ago, natural gas provided less than 10 percent of our state’s power.
Why the change? Environmental concerns have caused a shift away from coal for power generation. Now, only five percent of our state’s electricity is generated by coal. Oconee EMC has contracts for most of the power we purchase on the wholesale market. Our power supplier buys the rest on a day-to-day basis. This method makes sense so that we don’t overbuy on days with low electricity demand. Some contract and most day-to-day power is generated with natural gas. That’s because gas-fired plants can be brought in and out of service quickly.
WHY IS GAS GOING UP?
The U.S. Energy Information Agency lists several factors that affect natural gas prices: weather; supply and demand; imports and exports; storage levels; and production levels.
What Oconee EMC pays for wholesale electricity has risen dramatically in the past few months because:
• Pipeline capacity, supply and demand – With no new pipelines being built in the U.S. for quite some time, the current capacity to transport natural gas is inadequate. With recent demands for more liquefied natural gas, more natural gas for power generation, and traditional uses like home heating, pipeline companies are charging a premium to move the commodity.
• Weather, supply and demand – Much of the U.S. experienced a heat wave this past summer, causing an increased demand for natural gas-produced power.
• Exports, supply and demand – The U.S. has greatly increased its exports of natural gas to Europe to counter the Russian shortfall, decreasing supplies here at home. U.S. exports have risen more than 1,000 times the amount as compared to 2015.
• Storage levels, supply and demand – Since summer natural gas demand was higher and exports have risen, very little natural gas was put into storage.
WHAT THIS MEANS FOR YOU
Such a significant increase in Oconee EMC's largest cost item must be passed through to our members. This will be reflected in the Power Cost Adjustment (PCA). The PCA is a separate line item on Oconee EMC's billing statement which reflects the increases/decreases in the co-op's cost of power.
It has always been our goal to provide our members with reliable and affordable electric services. Oconee EMC's rates are not designed to make a profit, but to simply cover the costs of providing electricity to our members. That's one benefit of being a not-for-profit cooperative, Oconee EMC only charges members for energy they use.
Oconee EMC members can always find ways to be energy-efficient through our Home Energy Suite at www.oconeeemc.com/home-energy-suite.