A penny won’t buy much – except electricity

From the Board of Trustees

Now that the Christmas holidays are behind us and we’re all coming to terms with the amount of money we spent on gifts, this month feels like a good time to talk about value.

Seems as though we’re not as concerned about value as we once were in America. If advertisements and commercials tell us anything, it’s that we’re more focused on brand names and recognition when we’re making purchases.

But some of us still like value. We like to know we’re getting our money’s worth when we’re investing our hard-earned dollars into a product or service.

For that reason, it’s always a pleasure to talk about the value of electricity. In 80 years, the price of electricity has actually risen slower than the rate of inflation. A penny in 1940 had as much buying power as 17 cents today, which means the residential price of electricity—which now averages 12 cents a kilowatt hour (kWh) nationally and 11 cents per kWh at Baldwin EMC—is a better deal today than it was in 1940.

Today, our government can’t even make a penny for a penny anymore. According to the U.S. Mint, it now costs 1.5 cents to produce one.

About the only thing of value you can still get for a penny is electricity.

Not sure how that computes? Let’s look at an example. If you ran a ceiling fan in your home for an entire day, it would use about 1.8 kWh daily. At a rate of 11 cents per kWh, that would cost you approximately 20 cents each day, meaning you could get a full hour’s worth of that cool breeze for less than a penny.

Where else can you get that kind of value?

How many eggs will a penny buy? How much milk, bread, coffee, medicine or gasoline?

Gas has come down from its stratospheric levels of several years ago, but there is still no comparison to the value of electricity. For example, if a gallon of gas costs $2.50 and your car gets 25 miles to the gallon, you can drive 176 yards—about two blocks— on a penny’s worth of gas.

We are fortunate electricity is such an excellent value because our demand for it is higher than it’s ever been. Nearly a third of all U.S. households have four electronic devices, such as cell phones, plugged in and charging, according to the Residential Energy Consumption Survey by the U.S. Energy Information Administration. In the past 30 years, the amount of residential electricity used by appliances and electronics has increased from 17 percent to 31 percent. More homes than ever use major appliances and central air conditioning. Digital video recorders (DVRs), computers, and multiple televisions have become the norm.

Clearly, our appetite for electricity shows no signs of slowing down. So the next time you flip a switch, use your toaster, or run your washing machine, remember the value electricity holds. And know that we at Baldwin EMC are looking out for you by working together to keep electric bills affordable, controlling costs through innovation, and putting you, our members, first.

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