We are in the process of creating our 2025 Business Plan, which allows us to allocate dollars sensibly and provide our members with the safe and affordable electricity they need. This process entails each department’s review of the previous year’s expenses and comparing it to the strategic plan initiatives in order to meet our goals. We have both short- and long-range plans for meeting our energy requirements. Balancing revenue and expenses can be tough, which is why we rely on years of experience.

Inflation and supply chain challenges

Though they aren’t new challenges, inflation pressure and supply chain disruptions have increased the cost of materials,
equipment and services that are essential to our operation’s maintenance and construction plans. We absorbed many of those costs for as long as we could during COVID when things were scarce. Last year it became necessary to increase our service charge to help offset the inflated expenses. This increase helped with short-term fluctuations, but we will most likely need a more substantial increase in 2025 to maintain our financial integrity.

Cost of Service Study

We conducted a full cost-of-service study (COSS) with our lender, Cooperative Finance Corporation (CFC), to understand where shortfalls impacted our financials. We spent countless hours determining the true cost of delivering power to ensure we captured the expenses and allocated them to the proper categories. We looked at our rate classes and how those classes use power. We looked at the kWh demand component and the cost to have the service in place.

Generation Costs and Power Shortfalls

Our largest expense is purchasing power from our power supplier, followed by operations and maintenance expenses. A key factor affecting electric rates is cost of generating electricity. Changes in the energy markets due to volatile fuel prices, intensifying regulatory requirements, and pressure to add renewable energy sources have produced significant fluctuations in the market as well as the grid. We continue to face the real threat of power shortfalls, which is why our cooperative has a plan in place if or when needed.

Grid Modernization and Infrastructure Upgrades

Updating our infrastructure is key to providing you with safe and reliable power. And while updated equipment improves our long-term efficiency, it comes at a substantial investment. Our budget includes upgraded equipment and improved technology where and when it seems appropriate. Regulatory compliance and the cost of maintaining aging infrastructure and renewables drive up the cost of producing and distributing electricity. The nation’s electric grid is continually undergoing upgrades to provide safe and affordable power.

Keeping Our Commitment

Your cooperative remains committed to providing our members with a safe and affordable energy source. Your board of directors and employees work hard to keep the lights on. We understand that no one likes to hear that the cost of something they depend on will rise, but rest assured, we don’t take that lightly. As soon as the final numbers are reviewed, we will notify you of the increase and how it will impact you.