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Southeastern US pays slightly more for electricity

By: Paula Walter
Assistant Editor

Google has recently implemented a new interactive maps gallery, created by governments, businesses and non-profit organization from all corners of the world that will give viewers access to information on a large host of topics. One of the areas of concentration is the cost of electricity in the southeastern states. Appalachian Voices, a non-profit conservation organization based out of Boone, North Carolina, was asked to participate and give their input on this topic.
The online map indicated families in the United States spend an average of 2.7 percent of their incomes on electricity and gas to heat their homes, with the exception of those living in the southeastern section of the country. These customers spend an average of three percent of their income just on electricity, while there are particular areas of the south, such as northeastern Tennessee, who pay between four and five percent of their income. This often amounts to 20 percent of their total income. According to the information released by Appalachian Voices, those that pay a higher percentage of their income for electricity are mainly concentrated in areas where service is provided by rural electric cooperatives. The report indicates co-op customers pay up to eight percent more than those served by other power companies. Part of the increase is because homes often lack insulation and are not weatherized, resulting in wasted energy, as many struggle with poverty and do not have the disposable income to prepare proactively. According to a report by Rory McIlmoil, Energy Policy Director for Appalachian Voices, the average poverty rate in the southern states has risen to over 16 percent from 2010 to 2012 and an increasing number of families have fallen into poverty. While jobs have become scarce and the cost of basic necessities in life has increased, the cost of electricity to heat and cool homes has risen.
According to Charlie Dunn, Director of Customer Service and Economic Development for Mountain Electric Cooperative, electric cooperative prices can be higher, but there are far less customers per mile than in urban areas. The cost is spread out in cities among many customers who are able to absorb more of the costs than in a one-mile area. Rural co-ops have a very small percentage of customers in that same distance, causing them to share more of the burden of costs associated with maintaining and providing electricity. According to Dunn, the company recently performed a survey that looked at 12 different electric companies surrounding Mountain City. The results showed Mountain Electric Cooperative was the third lowest price out of the 12.
The purpose of the report was not only to make the connection between poverty and the cost of electricity in the southeast, but also to look for interest from the electric companies to help make the customers’ homes more energy efficient and reduce costs. One of the possibilities is the implementation of on-bill financing for a loan where monies would be used to improve insulation and heating in the home. The co-op would have a pool of money to loan to its customers, and the price per month would be based on the costs and the length of the loan. The customer would make the loan payment by paying extra on their electric bill or by using a portion of the money they saved each month due to the upgrades.
The difference between it and other programs paid through the Tennessee Valley Authority is the interest rate on the loans. In the on-bill bill program, customers would not have to meet a specific credit score, but rather they could be approved based on their payment history.
“There is a lot of legwork involved,” said Dunn. While still in the early stages, there are still a lot of questions to be answered to determine if providing on-line billing for Mountain Electric Cooperatives customers is feasible. There is a lengthy grant process, approval would be needed by the Board of Directors, and the costs and manpower needed to implement the program must all be taken into consideration. The board must also look at the program itself to determine if it will benefit its members.