Every day our senior management team works to balance rising industry costs with our obligation to provide reliable and affordable electric service. We want you to be assured that the decisions we make are thoughtful, measured and always grounded in what is best for our members.

Over the past few years, the electric utility industry has been in a state of flux and it is a completely different environment today than just a few years ago. Significant pressures within the industry are forcing a rate adjustment beginning in March. Although we have not completed our budget and rate analysis to know the exact amount, a change of rates is necessary. In the October CEO Column, it was reported that South River EMC will face a 10.55% rate increase in its wholesale power purchases in 2026 from our power supplier, NCEMC.

These challenges are not unique to us—they are affecting utilities nationwide. Key drivers are explained below.

Early Retirement

In compliance with federal regulations, many coal-fired plants—still producing dependable electricity—are being retired prematurely. Removing these facilities before replacement generation is fully available creates a gap between supply and demand. When supply tightens and demand continues to grow, wholesale power costs rise. Building new generation facilities and grid infrastructure to fill that gap often requires billions of dollars and multi-year construction timelines, further contributing to increased costs.

Shifts in the Generation Mix

National energy regulations have shifted our wholesale power portfolio toward more renewable sources, such as solar and wind. While these resources can be beneficial, they require substantial upfront investments. Additionally, because of the intermittent nature of renewables, they are not available around the clock, so utilities must build backup generation to ensure reliability. These added layers increase overall power supply costs.

Rapidly Increasing Demand

After several years of declining electrical demand, the trend has gone in the opposite direction and demand is now soaring. Expansion of data centers, population growth in the Southeast, and the rise of beneficial electrification are placing new demands on the grid. Meanwhile, dependable “baseload” generation is retiring faster than it can be replaced. With higher demand and limited immediate supply, the cost of the power we purchase is increasing.

Equipment Costs

We continue to experience increased costs combined with long lead times for equipment, necessary to operate an electric system and build new facilities to accommodate growth. The past five years have been a period of rising costs for the electric utility industry, pushed by soaring demand, supply-chain challenges, raw materials shortages, increased labor costs and tariffs. The impact has been rapid increases in the cost of producing power, longer and more unpredictable project timelines and the need for more financing, all of which have driven up electric rates.

In order to meet the increasing demand for electricity, the U.S. will need significant investment in electric generation and to fast track construction. It is estimated that the U.S. needs an additional 38 gigawatts – that’s 38 million kilowatts – of electricity by 2030.

Although we have trimmed our budgets where possible, it is important to note that 62.5% of our entire budget is the cost of energy. This means that we only have actual control of a small portion of the budget. We have been streamlining processes, reducing redundancy, refining inventory control and using technology and analytics to improve efficiency

Advocating for You

While we continue refining our operations, we are also working on your behalf at the state and federal levels. We regularly engage with members of the North Carolina General Assembly and Congress to ensure energy policies are crafted with affordability, reliability, and practicality in mind. Together we have been successful in the rollback of several power sector regulations.

To help offset energy cost changes, we have energy-saving advice on sremc.com. Additionally, our three energy advisors, the “Advise Guys”, are available to help make efficiency recommendations – they are also available to perform a free energy analysis on your home.

Our Commitment to You

We understand that any rate change affects each member differently. That is why transparency is so important. We will keep you informed about the challenges affecting the energy industry and how they influence costs at South River EMC. We will notify our membership as soon as possible so you can prepare for the upcoming change.