Like any business, SVEC must collect enough revenue to cover the cost of providing electric service, maintain and improve the electric system, and meet its financial obligations.
SVEC's lenders also require the cooperative to maintain certain financial ratios and levels of financial performance. These requirements help ensure SVEC remains financially sound and able to meet its obligations, maintain access to financing and continue investing in reliable service for our members.
As a not-for-profit cooperative, margins are not the same as profit for outside owners or shareholders. They help strengthen SVEC's financial position, support investment in the electric system and are reallocated to members through capital credits. Capital credits may be retired and returned to members over time, based on the cooperative's financial condition and Board-approved decisions.
Our industry is very capital-intensive. It takes a lot of physical materials and building of infrastructure to get power to our members. Providing reliable electricity requires significant investment in that infrastructure long before a member flips on a light switch. SVEC must plan for growth, replace aging equipment and maintain the system needed to serve members safely and reliably. That means we often have to invest in poles, lines, substations, transformers and other infrastructure before new members arrive or existing equipment reaches the end of its useful life.
Over the next 10 years, SVEC expects to invest approximately $31 million to keep pace with member growth alone. These investments help ensure we have the capacity and reliability needed to serve our members today and into the future.
For electricutilities,theseinvestmentsarefinancedthroughlong-termloansratherthanpaidforallatonce,whichhelpskeepelectricratesmoreaffordable and ensurecostsaresharedfairlyovertime.Insteadoftoday'smemberspayingthefullcostofimprovementsthatwillbenefitthesystemfordecades,thecostisspreadovertheusefullifeofthoseassets,sofuturememberswhobenefitfromthemhelppayforthemaswell.
Your electric bill is made up of several components, and each serves a different purpose. Some charges help cover the ongoing cost of maintaining and operating the electric system, while others reflect the amount of electricity you use, changes in power costs, required taxes or temporary storm-recovery costs.
Facilities Charge: A fixed monthly charge that helps cover some of the fixed costs of maintaining the electric system and the infrastructure needed to deliver reliable service to your home. Poles, wires, transformers, maintenance of right of way, and property taxes are some examples of a co-op's fixed costs.
kWh Charge: The charge for the electricity you use. Your usage is measured in kilowatt-hours (kWh), so this portion of your bill changes based on how much electricity you consume.
Power Cost Adjustment: A charge that reflects changes in the cost SVEC pays for the power it purchases for members. This helps account for market fluctuations in wholesale power costs without building those changes permanently into base rates. When actual power costs are lower than the amount included in base rates, the PCA can appear as a credit on your bill.
Gross Receipts Tax: A state-required tax applied to the electric service provided. SVEC collects this tax through your bill and sends it to the state.
Idalia Cost Recovery (ICR): A temporary charge that helps recover costs associated with restoring the electric system after Hurricane Idalia. ICR updates are provided in our member newsletter and the Idalia Cost Recovery web page. SVEC remains committed to removing the charge as soon as the necessary funds are collected.
As we move into 2027, we're continuously evaluating our rates to ensure they remain as fair and stable as possible.
We’re also closely monitoring and mitigating costs, pursuing all available reimbursements, and assessing our overall financial condition as we maintain service for our members and the financial covenants of our cooperative.
We are still committed to removing the Idalia Cost Recovery Charge as soon as the necessary funds had been collected.
Rising costs have affected every industry, including ours, with increasing expenses for essential materials and equipment, like transformers, up to 125%. The past six years have been a period of exploding costs for the electric utility industry, pushed by soaring demand, supply chain challenges, raw materials shortages, increased labor costs and tariffs. These impacts have resulted in 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 electric rates up for residences, businesses, and other end-users.
Here's a glance at what's contributing to the trend across our industry:
Our cooperative also has a responsibility to meet financial obligations and ensure long-term reliability. With rising costs and back-to-back challenges, the December 2025 rate change was an unavoidable necessity to support the level of service our members expect and deserve.
1. Member-Owners
SVEC is owned by the members it serves. Members elect trustees to represent their districts, vote on bylaw changes, attend district and annual meetings and hold the cooperative accountable through democratic process.
2. Member-Elected Board of Trustees
Board members are elected by the membership to provide oversight, establish policies and make decisions in the best interest of the cooperative and its members.
3. Florida Public Service Commission (PSC)
Rate changes are submitted to the PSC for review to ensure rates are distributed in a fair and equitable structure. If the PSC identifies concerns with the rate structure or determines the request does not meet regulatory requirements, it can reject the filing.
4. Independent External Audits & Financial Oversight
An annual external audit provides an unbiased review of the cooperative's financial records and reporting practices. Auditors verify that financial statements are accurate, complete and compliant with accepted accounting standards. SVEC's bylaws also require a full annual audit of the cooperative's accounts and financial condition.
In addition to the annual independent audit, SVEC is subject to periodic audits and reviews by the U.S. Department of Agriculture's Rural Utilities Service (RUS) as required.
Grant-funded projects and FEMA reimbursements are also subject to required documentation, validation and audit processes.
5. Financial and Regulatory Requirements
SVEC must comply with state and federal requirements, lender obligations and industry accounting standards. This includes maintaining certain financial ratios and levels of financial performance required by our lenders. These lenders conduct their own periodic reviews, such as the Cooperative Finance Corporation's Key Ratio Trend Analysis, which is composed of over 100 metrics comparing our cooperative against similarly sized co-ops nationwide. Additionally, SVEC’s Financial Management Plan references adherence to PSC-approved rate tariffs and an annual review of financial performance by the Board. These requirements help ensure sound financial management, transparency and equitable treatment of members.
As a cooperative, we operate differently from investor-owned utilities. We do not have outside investors or large profit reserves. Instead, we collect only what is necessary to maintain and expand our grid for the communities we serve. All our board members are SVEC members themselves. We share your commitment to keeping costs fair and transparent - only increasing rates when necessary.
Before any rate change is considered, an independent financial team conducts a Cost-of-Service Study (COSS) to analyze the cost of providing electricity. The outside consultant provides an independent perspective and analysis of our costs, major drivers, and how they're distributed across rates. Based on these findings, a proposed rate structure can be developed and presented to the board for review and approval. This process ensures that any changes align with the cooperative principles of reliability, fairness, and financial stability.
These changes are also submitted to Florida's Public Service Commission (PSC), where the filing undergoes a regulatory review to ensure the change is just, reasonable, and lawful.
Operating expenses are the costs involved in providing electric service to our members. That includes the power we purchase, maintaining our lines and equipment, operating our facilities, supporting our employees and technology, serving our members, and everything else that keeps the cooperative running. Every part has a role and works together to provide you service.
To date, the co-op has received FEMA reimbursements totaling approximately 40% of of its estimated FEMA reimbursement. When FEMA announces an award for our co-op, it is a notice of obligated funding, not payment. As FEMA continues to review expenses, additional obligations may be set aside for SVEC. However, Florida’s department of emergency management must still conduct its own review processes before determining a final reimbursement amount. This process often takes years to complete. Furthermore, FEMA does not reimburse all storm related expenses. Based on historical data, we anticipate approximately 75% to be reimbursed.
In all, we've incurred over $134M in storm costs. That's the equivalent of more than 2 years of our normal operating expenses on storms alone. An unexpected impact of that magnitude is not a fast or easy recovery for any business. Nonetheless, we continue to put our best foot forward, working diligently to document and obtain reimbursements.
In most cases, the biggest factor is weather, not routine.
Heating and cooling make up the majority of electric usage for standard households. It’s why usage tends to peak in January and February, and then again June-August. When outdoor temperatures rise, your air conditioner is working overtime, running harder and longer to maintain its thermostat setting, when you’re away from home. The higher the temperature difference, the more energy is used.
Issues with water heaters or well pumps may cause higher than usual electricity use, and can happen any time of year.
Utilizing SmartHub’s usage explorer tool can help members identify patterns, make changes, and view outcomes to make power-conscious decisions for their household.
