Powering Our Future: Clarity, Responsibility, and Readiness
Dear Members,
Across Virginia and the nation, energy demand is climbing — and fast. Virginia’s Department of Energy recently projected that annual demand growth for energy is increasing to 6.5%, up from a historic norm of 1.4%. Forecasts from the regional grid operator, PJM, show that electricity demand in Virginia alone will double by 2040. Knowing these forecasts, generation capacity in Virginia must increase rapidly. PJM recently indicated that power supply could run short as early as next summer if action isn’t taken.
Virginia has benefited greatly from economic growth fueled by data centers and new industries, but that growth brings an urgent need for strategic investments in power generation and transmission. At Rappahannock Electric Cooperative (REC), we’ve long understood that energy decisions made today will shape affordability and reliability for years to come. That’s why we take a proactive, member-first approach — one built on responsibility, transparency and care. We have a fundamental obligation to serve, and we intend to meet that obligation — responsibly, reliably and with care.
Let’s Talk About the Power Bill
While the nature of our industry requires long-term planning, we know many members are feeling the strains in the cost of living and rising electric bills. Please know we can provide information, answer questions or arrange flexible payment options when times are tough.
It’s important to understand that approximately 65% of your electric bill reflects the cost of power supply. These costs are rising because of factors like natural gas market volatility, higher capacity prices, and the need to invest in new generation and transmission to meet growing demand. Capacity charges — set by PJM — are necessary to ensure that power plants are available during the hottest and coldest days of the year.
While we can’t directly control power supply costs, we work hard to control the parts we can — the approximately 35% of your bill tied to REC’s distribution system of poles, wires and operations. We:
- Keep operations efficient and cost-effective
- Leverage technology to wisely plan system improvements, such as right-of-way maintenance
- Build resilience into the grid to perform better during storms and extreme temperatures — to avoid or delay equipment replacements
- Successfully pursue grants and outside funding to support REC’s needs
A Strategic Approach to Growth
Our service territory is growing rapidly — from new homes, small businesses, advanced manufacturing and hyperscale data centers.
To specifically manage the data center growth without exposing traditional members to risk, we created Hyperscale Energy Services — an REC affiliate company. Hyperscale was created to provide the data centers with market power from PJM. Hyperscale also allows us to manage financial risk effectively by ensuring that very large users pay their fair share of system costs. We’re proud to lead in this space, getting legislation passed that gives cooperatives more flexibility to serve these large accounts responsibly — aligning with independent recommendations from the Joint Legislative Audit and Review Commission (JLARC) to protect consumers.
Standing Up for Members at Every Level
Recently, REC filed a new delivery rate proposal for large power users with the State Corporate Commission. This is a fairness- focused step to maintain long-term co-op financial strength, ensuring that every member benefits from a reliable, affordable grid.
Behind every pole, every substation, every innovation and every REC employee is one goal: to put members first.
Thank you for your continued trust and partnership.
- John Hewa | President & CEO
