Electric customers served by Ohio’s investor-owned utilities, AEP and AES, have experienced significant double-digit increases in their electric rates. These rates are now higher than those paid by members of Ohio’s electric cooperatives, with the difference continuing to grow.
The primary reason for these rate hikes is the rising price of electricity, driven by high demand and limited supply. Investor-owned utilities like AEP and AES have also begun investing more in electric reliability. However, advertisements promoting lower generation rates from these companies do not reflect the total cost to consumers. The advertised 8 cents per kilowatt hour covers only the generation portion of the bill; distribution and transmission costs must also be included for an accurate comparison. When all costs are considered, the total rate for these utilities exceeds that of Ohio’s electric cooperatives.
Unlike investor-owned utilities, which no longer generate their own electricity but instead purchase it through auctions managed by a regional transmission organization covering Ohio and 12 other states, electric cooperatives operate under a different model. Increased demand—partly due to expanding data center usage—and reduced generation capacity caused by early retirements of fossil-fuel plants have led to steep rises in wholesale power market prices. These increases are passed on directly to customers on standard service plans.
Ohio’s electric cooperatives are insulated from such market volatility because they do not participate in electricity auctions. “Not only are we member-owned and not-for-profit, but we are a part-owner (along with Ohio’s other electric co-ops) of Buckeye Power, which generates and transmits the electricity that powers our co-ops,” according to a statement from the organization.
Buckeye Power generates all the electricity needed for cooperative members using facilities such as the coal-fired Cardinal Power Plant, Mone and Greenville natural gas plants, solar arrays, hydropower from upstate New York, biogas renewables, and methane sourced from livestock farms and landfills. This ownership structure allows cooperatives to maintain stable rates for their members.
“Owning our own generation allows cooperatives to maintain stable rates for our members,” said a representative.
Buckeye Power produces more than enough energy for its approximately one million Ohio customers. Any excess power generated is sold on the market; revenue from these sales helps offset rising costs related to fuel, transportation, and supplies. Some of this revenue is returned to local distribution co-ops as patronage capital.
As a result of this business model, cooperative members benefit from greater rate stability compared to those served by investor-owned utilities facing volatile market conditions.
“Electric cooperative members can rest assured that your co-op will always keep your rates as low as possible while maintaining the cooperative’s financial health and providing the reliable electricity you need and expect,” according to leadership at Ohio’s Electric Cooperatives.
