Last month, I discussed how the lack of growth in Pioneer Electric’s service area poses a challenge for keeping electric rates low. This month, we’ll focus on the opposite issue — how increasing demand for power affects costs.
As a distribution cooperative, we don’t generate power for ourselves, we purchase it from PowerSouth Energy Cooperative and deliver it to our members. In that respect, we are simply a delivery company. About half of every dollar you spend on your power bill goes toward purchasing that power. So when the cost of generating electricity rises, it directly impacts what you pay as a member.
PowerSouth, our power supplier, is considered a small utility compared to the massive power providers serving major metropolitan areas. And Pioneer Electric? We’re even smaller—a true David in a world of Goliaths.
Although Pioneer Electric’s system growth remains stagnant, the PowerSouth system is experiencing rapid growth. Much of this growth is expected as more homes are built, businesses expand and industries increase production.
PowerSouth commissioned a new power plant in 2023 and has plans to build additional generation to keep up with increasing demand. The cost of building new power plants has skyrocketed due to inflation, demand, and regulatory challenges.
Because about half of Pioneer Electric’s operating costs come from purchasing power, any increase in generation costs directly affects our members.
The energy landscape is shifting rapidly, and one of the biggest forces driving change is the explosion of data centers. These power-hungry giants are reshaping the electricity market, consuming vast amounts of energy and driving up demand across entire systems. Even though there are no plans for data centers on our system, their influence will still be felt.
The reality is that ensuring a stable power supply in the future will require significant investment. We are part of a network of electric cooperatives, working alongside one another and our industry partners to advocate for cost-effective energy solutions, regulatory fairness, and strategic investments. These relationships allow us to stay informed, access critical resources, and ensure that even small cooperatives like Pioneer Electric have a voice in shaping the future of power supply.
David didn’t defeat Goliath with brute strength—he used faith, strategy, preparation and the right tools. At Pioneer Electric, we’re doing the same. The future of power supply is changing, and while we may be small, we are ready to meet the challenge.