Serving Energy Needs of Rural Texans Since 1939
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NewCorp Resources Electric Cooperative
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Recent News and Information from Cap Rock EnergyThe Rising Cost of Doing Business If you’ve been to the gas pump lately, you have a good idea of why there are rising costs in any business. The escalating cost of fuel for Cap Rock’s fleet of vehicles is just one example of the rising costs of operating our company. Construction costs have become one of the fastest growing expenses in Cap Rock’s operations. During the past few years, the cost of materials required for building electric lines has increased by as much as 184%. Below are some of the materials the company commonly uses in its construction operations and the increases in their costs that we have noted: 2004 to 2007 Cost of 40-foot poles increased by 44% Cost of copper wire increased by 184% Cost of size 10 kVa transformers increased by 122% As you can readily see from the examples above, the cost of doing business has escalated rapidly. Factoring these price increases in, an estimate of today’s cost for building 500 feet of overhead line is approximately $4,100. The same distance of underground is approximately $7,900. Cap Rock makes no profit on the construction or materials, but it is necessary to pass on the cost to those customers who require new services. This is because of Cap Rock’s tariff required by the Public Utility Commission of Texas, which dictates that no other customers subsidize what will benefit only a single customer. The increased cost of materials used in these operations is part of the cost of doing business. And that’s going up for all of us – no matter what business we are in. |
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