Last February, WKYC-TV in Cincinnati had a warning for its viewers: “Get ready, Ohio: Your energy bill will be higher this summer.”
In April, an AEP Ohio official told WBNS-TV in Columbus that customers should expect their bills to jump by an average of $27 beginning in June.
“Electricity price surge,” screamed a headline on Cleveland.com in late July, over a story that said Ohioans were seeing increases that averaged 10% to 15%. The story explained that a record-breaking auction in the wholesale electricity market last year had set higher prices for future supply, and that was coming to fruition.
In late July, the Ohio Capital Journal said energy bills are likely to tick up again in 2026 after the wholesale auction hit its maximum limit again this summer.
“Duke Energy bills jump in Southwest Ohio; more increases are on the way” — Cincinnati Enquirer, Sept. 23, 2025.
Ohio's electric cooperatives own their own power generation sources, including Cardinal Power Plant, helping to keep their electric rates more stable.
If you watch, read, or listen to news outlets in Ohio, you’ve been bombarded for most of the past year about skyrocketing electricity rates. For most consumers, whether customers of an investor-owned utility or members of an electric cooperative, those stories likely were difficult to process.
Often, there was no explanation for those rising rates. When reasons were given, they were mostly blamed on the “wholesale electricity market” — but that seemed to raise more questions than it answered. And while customers of the larger utilities did see those huge jumps in their bills, most co-ops kept rates steady or added only modest increases.
Craig Grooms, president and CEO of Buckeye Power, the generation cooperative that provides the electricity co-ops distribute to their members, says co-ops are seeing the benefits of their steady approach — despite uncertainty in the industry.
“Right now, there’s growing demand for electricity, mostly because of all these new data centers,” Grooms says. “At the same time, we have existing, useful power plants that may be forced to retire, but the process to replace them is extremely slow. Put those together and it creates even more volatility in the wholesale energy markets than there usually is.
“As cooperatives, we have certain advantages that can insulate us from a lot of that,” he says. “We have always believed our business model is good for the long-term stability in the rates paid by our members.”
What makes co-ops different?
When a headline refers to wholesale electricity markets (or wholesale auctions) being at their maximum limit, it generally means that demand for electricity is increasing and supply is not keeping up; it’s basic economics.
For Ohio’s investor-owned utilities (AEP-Ohio or FirstEnergy, among others), the power they deliver to their customers comes from power plants that participate in the wholesale markets, and market pricing can be volatile — especially in uncertain times.
That dynamic is less of a concern for Ohio’s electric cooperative members because, through their ownership of their cooperative, they own power generation resources dedicated to providing electricity to their homes, communities, and businesses.
Back to the beginning
The first co-ops were formed in the 1930s when farmers and other residents of rural areas joined forces to bring power to areas that investor-owned utilities ignored. Today, 25 member-owned co-ops still serve nearly a million people in 77 of Ohio’s 88 counties. There are more than 800 electric cooperatives nationwide.
When the co-ops first formed, most had to purchase wholesale power from those larger utilities or from nearby municipal power plants. In Ohio, that changed in 1959, when the co-ops formed Buckeye Power. Through Buckeye (and in partnership with American Electric Power), the co-ops built the Cardinal Power Plant in Brilliant, and have added resources over the decades as the demand for electricity grew. Buckeye Power now delivers significant energy generated from two natural gas “peaking” plants, its solar arrays, numerous biomass facilities around the state, and an entitlement to a portion of the hydropower generated by Niagara Falls.
All of that power generation is sufficient for the co-ops to meet all their members’ current needs, and co-op leadership continuously evaluates the need for more capacity for any future needs.
The role of member governance
That local ownership, member control, and community-centered decision-making puts the co-ops in the unique position of having direct control over their electricity costs.
Each co-op elects a board from among its members, and each co-op is represented on the board of Buckeye Power. While each individual co-op determines its own rate structure, the wholesale rates for generating and transmitting that power are set by the Buckeye board. Unlike in competitive power markets, where wholesale rates are set through bidding and auctions, co-ops operate under a cost-based model.
Just as each co-op’s service fee is based on the actual cost to deliver electricity to members, the wholesale rate is based on the actual cost to generate that power and deliver it to each co-op’s distribution system. They take into account factors such as fuel and other operating costs of the generation facilities; cost of utilizing the high-voltage transmission grid; debt payments on capital investments such as environmental upgrades; maintenance and staffing; and ensuring reliability and planning for future needs.
Balancing reliability and affordability
Still, wholesale rate setting is a balancing act. Co-ops must ensure they’re charging enough to cover their costs and maintain reliability without overburdening members with high rates. But because co-ops are not for profit, any revenue above what’s needed to run the system is returned to members over time as capital credits — and just as the local co-ops return credits to their members, Buckeye Power returns capital credits to the co-ops.
That system helps co-ops keep long-term rates more stable than those of investor-owned utilities, which must not only recover the cost of producing and delivering electricity, but also make a profit for their shareholders.
“In the end, power rates in co-op world aren’t about profit,” Grooms says. “They’re about producing and delivering electricity at cost and being accountable to members. That makes a huge difference.”
