Power Purchase Agreements

12 Months Ended

Dec. 31, 2024

Regulated Operations [Abstract]

Power Purchase Agreements

NOTE 4—Power Purchase Agreements

In 2024, 2023, and 2022, our owned generating facilities together furnished approximately 43.6%, 52.5%, and 51.5%, respectively, of our energy requirements. The remaining needs were satisfied through purchases of power in the market through long-term and short-term physically-delivered forward power purchase contracts. We also purchased power in the spot energy market. This approach to meeting our member distribution cooperatives’ energy requirements is not without risks. To mitigate these risks, we attempt to match our energy purchases with our energy needs to reduce our spot market purchases of energy and sales of excess energy. Additionally, we utilize policies, procedures, and various hedging instruments to manage our power market price risks. These policies and procedures, developed in consultation with ACES, an energy trading and risk management company, are designed to strike an appropriate balance between minimizing costs and reducing energy cost volatility. We are required to post collateral from time to time due to changes in power prices. As of December 31, 2024 and 2023, we were not required to post collateral with counterparties. Additionally, PJM requires that we provide collateral to support our obligations in connection with certain PJM transactions. As of December 31, 2024 and 2023, we had posted $13.1 million and $15.3 million, respectively.

Our purchased power expense for 2024, 2023, and 2022 was $362.3 million, $312.8 million, and $462.5 million, respectively.

As of December 31, 2024, our power purchase obligations under the various agreements were as follows:

Year Ended December 31,	Capacity and Energy Obligations
	(in millions)
2025	$	145.4
2026		80.5
2027		11.5
	$	237.4