I’m proud to say that we’re more involved in and supporting our local communities than we have ever been throughout our history. And thanks to you, our members, there has never been greater member partnership with us to drive improvements and benefit our communities in areas such as health care, education and assistance to those in crisis. Containing costs is challenging during these times of rising costs in all sectors of our economy. It’s especially difficult in the electric utility industry when our nation’s leaders have developed no energy policy — and none in sight for the near future. This is resulting in uncertainty around investment in expensive power plants at the same time growing government regulations and environmental laws are increasing the cost of doing business. New regulations aren’t the only culprit, however. Prices for fuel, materials, and equipment are predicted to continue rising. Also driving up costs is the need to modernize our nation’s grid. Our grandfather’s generation invested in building our nation’s massive power delivery system and now it’s our time to invest in upgrades to ensure our quality of life continues for our children and grandchildren. Containing costs during times like these is difficult, but we’re committed to looking out for our members. For example, even though our costs for wholesale power rose by 8 percent this year, we were able to contain the recent rate adjustment to 2.5 percent. We achieved that with a multipronged approach that includes controlling internal operating expenses through our employee WorkSmart program, profits from our subsidiary companies, and negotiations with Duke Energy to get the best possible savings for our
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While cooperatives like Blue Ridge Electric resemble most companies in some ways, there are some important differences. The most distinguishing part of a cooperative is that we don’t operate to produce a profit; we exist to benefit our members by keeping your bills as low as possible and being a local, supportive presence improving the quality of life in the communities we serve.
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Offsetting rising costs, ensuring the Cooperative Difference
members from the Duke-Progress merger.
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n fficer Doug Johnso
Through WorkSmart, employees have identified and implemented ideas worth an annual $2.9 million in costs we avoided spending — costs members did not have to pay. These ideas ranged from using more technology and reducing paper, changing our uniform contract, changing to a business format for the annual meeting and more. Due to these efforts, none of the recent rate adjustment was for operating costs; it was entirely to pay for increased wholesale power costs. While our wholesale power agreement with Duke Energy offers the best pricing available in the current marketplace, these costs are rising for Duke and other power generators due to the reasons mentioned above: increasing environmental regulations, closing old coal plants and replacing them with cleaner generation and more expensive power plants, and upgrades to power delivery systems. We’ll continue to monitor the merger and work to secure the best wholesale power pricing available since this makes up the majority of our costs. Finally, our subsidiary companies are key to helping offset rising costs for our members. The financial benefit provided from Blue Ridge Energies, a heating fuels and propane provider to homes and businesses, as well as RidgeLink, a business-to-business provider of our excess fiber capacity, goes directly to help hold down rate increases.
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While we project the need for annual rate increases the next few years, our commitment is to keep them below what we see other utilities having to implement. Our goal is to mitigate rising costs through our efforts above so that any necessary rate adjustments are kept to three percent or less. Our strategy is based on the cooperative difference of looking out for our members and helping keep your bills as low as possible while maintaining a local, responsive and supportive presence in our local communities.
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