The electric industry is entering a period unlike anything we’ve experienced in decades. Demand for electricity is growing rapidly, costs are increasing across every part of the electric system and electric cooperatives must prepare today for the challenges of tomorrow.
At REC, that preparation is already underway.
Since 2023, REC has connected over 12,000 new homes and businesses. Combined with the rapid growth of industries like advanced manufacturing, healthcare, technology and data centers, electricity demand is increasing at an unprecedented pace. REC’s record peak demand reached 1,204 megawatts (MW), and by 2040, demand on our system could grow to beyond 10,000 MW.
Preparing for this growth means investing in the infrastructure that powers our communities. New substations, transformers, poles, wire and other equipment are essential to safely and reliably deliver electricity to every member we serve.
Like many industries, REC has experienced significant increases in the cost of the materials we use daily, making it more expensive to build and maintain the electric system. Since the beginning of the decade, the cost of many essential materials has increased dramatically, including transformers (146%), conductors (more than 100%) and crossarms (118%). Even utility poles, one of the most visible components of our electric system, have increased by more than 20%. Every new neighborhood, business and reliability improvement depends on these and other critical materials, making disciplined planning and responsible financial management more important than ever.
Those local investment costs are only one part of the equation. REC also purchases wholesale power through Old Dominion Electric Cooperative, which participates in the PJM regional transmission organization. Across the PJM region, the costs of generating, transmitting and ensuring enough electricity is available during periods of peak demand have also increased significantly.
In fact, a recent report from PJM’s independent market monitor showed that during the first five months of 2026 compared to the same period last year, energy costs increased by nearly 60%, transmission costs increased by almost 5% and capacity costs — the cost of ensuring enough electricity is available when demand is highest — increased by more than 400%.
These are real challenges, but they are also exactly the kind of challenges your Cooperative was built to address. Our responsibility isn’t only to provide reliable electricity today, but to prepare for tomorrow in ways that help manage costs while continuing to deliver the level of service our members expect.
That preparation includes making thoughtful investments to strengthen our electric system, planning years in advance for future growth and evaluating new technologies that can improve reliability and help reduce long-term costs.
Battery energy storage systems are one example. By storing electricity when costs are lower and making that energy available during periods of highest demand and costs, battery systems have the potential to reduce wholesale power expense while adding flexibility and resilience to the electric grid. Our analysis indicates the potential for millions of dollars in savings by utilizing this innovative technology. Like every investment REC makes, these projects are carefully evaluated to ensure they provide meaningful value for our members over the long term. Today, REC is deploying multiple project rollouts across our territory.
Just as important are the programs that give members an opportunity to help manage their own energy costs.
REC’s Summer Savings Plan is a great example. By voluntarily reducing electricity use during periods of peak demand, participating members help lower stress on the electric grid while earning bill credits based on the energy they save. Last year, record participation allowed REC to increase the member incentive to $1.75 per kilowatt-hour saved, rewarding members for actions that benefit both their household budget and the Cooperative as a whole. This year, over 13,500 members are enrolled in the program, and our goal is to significantly increase enrollment, allowing more members to work with us to help control the rising cost of wholesale power.
The energy landscape will continue to evolve, and there will undoubtedly be new challenges ahead. While we cannot control national markets or every factor influencing the cost of electricity, we can control how well we prepare for them.
That means making disciplined financial decisions, investing strategically, pursuing innovative solutions and providing programs that help our members manage their own energy use.
The future of energy won’t be shaped by standing still. It will be shaped by planning ahead, making smart investments and embracing innovation. That’s exactly what REC is doing — preparing today to deliver reliable, affordable electricity for the members who own this Cooperative, no matter what tomorrow brings.
