DREMC rate hike softened

Members to see bills drop $0.59 thanks to lower fuel costs and seasonal shift

8:17 a.m. Oct. 17, 2025

DREMC rate hike softened

DUANE CROSS
MCO Publisher•Editor

Duck River Electric Membership Corporation (DREMC) has updated its rate changes for members, reflecting a more favorable outlook than initially projected.

On Oct. 1, 2025, DREMC implemented a residential and non-residential rate adjustment – only the third since 2018. The original estimate suggested an average $4.17 increase for typical households. However, a recent decrease in wholesale power costs due to the Tennessee Valley Authority’s Fuel Adjustment Charge (FAC), alongside the seasonal shift from Summer to Transition Rates, means the average member can expect their bill to decrease by $0.59 when comparing September to October bills, assuming consistent energy use.

Rate Adjustment Details

The adjustment is designed to ensure reliable service and support crucial infrastructure investments. These funds will go toward modernizing the grid, improving storm response, replacing aging equipment, and building new distribution substations for the system’s expanding service area.

Although any rate adjustment may pose challenges for families and businesses, DREMC leadership emphasizes its commitment to transparency and cost management. “This decision to adjust rates was not made lightly,” President and CEO James Wright said. “The realities of rising operating and maintenance costs affect us all, but we’re focused on providing value and reliability for our members.”

What is an FAC?

The Fuel Adjustment Charge (FAC) is a variable component in DREMC bills that reflects changes in the cost of fuel – such as coal, natural gas, or other energy sources – used to generate electricity. Each month, DREMC’s power supplier (TVA) recalculates the actual fuel costs and adjusts the FAC accordingly. If fuel prices drop, the FAC can even become a credit, reducing members’ bills; if fuel prices rise, the FAC increases and adds to the bill.

This means the FAC is a direct pass-through cost that changes regularly in response to the fluctuating energy market, which can cause bills to go up or down even if your energy use remains the same. The FAC is independent of DREMC’s local rate structure. It ensures members pay in line with real market fuel expenses each billing period.

The Difference Between Rates

Summer Rates and Transition Rates refer to different seasonal pricing structures used by utilities like DREMC to account for varying energy demand throughout the year.

Summer Rates are typically in effect during the hottest months, when electricity demand spikes due to air conditioning and cooling needs. During this period, utilities charge a higher price per kilowatt-hour, especially during peak hours in the late afternoon and early evening, to reflect the increased cost of supplying energy when demand is highest. For example, peak rates might apply between 3-7 p.m., Monday through Friday, and can be significantly higher than off-peak rates.

Transition Rates occur during periods between the high-demand summer season and winter, such as early fall or late spring. Energy use is not as extreme during these intervals, so Transition Rates are generally lower than Summer Rates. These rates encourage consumption at times when generating and delivering electricity is less expensive for the utility. As a result, when moving from Summer Rates to Transition Rates, members may see their bills decrease if their usage patterns remain consistent.

Growth and Community Commitment

Over the past six years, DREMC has added 10,000 members and extended the system by 300 miles, a robust growth that requires ongoing planning and investment. Wright highlights the pride in welcoming new communities and the importance of staying ahead of increasing demand for electric service.

Since its founding in 1936, DREMC has operated as a member-owned, not-for-profit cooperative. All profits are reinvested into the system to improve reliability, rather than distributed as dividends, supporting DREMC’s mission to keep costs low and service quality high.

Member Support Programs

Recognizing the financial pressures faced by many, DREMC offers a suite of support programs to help manage energy costs, including:

• Project HELP: Emergency bill-payment assistance for those in need.
• Levelized Billing: Designed to smooth out spikes from seasonal changes in energy use.
• EnergyRight: Rebates, tips, and financing for energy-saving upgrades (details at EnergyRight.com).

Ongoing Dedication

DREMC Board Chairman Anthony Kimbrough acknowledged that rate adjustments are complex, but reiterated the cooperative’s commitment to meeting member needs. “Duck River continues to work hard to absorb inflation impacts while maintaining the high service standards our members expect,” he said. “We are dedicated to ensuring the cooperative remains equipped to meet growing demand, now and for generations to come.”

DREMC encourages members to reach out for support or to explore programs and resources available to help lower energy bills and maintain affordable service.