Rate Increase Set for April 2023

General economic forces are adding up in all areas of our lives. e impact of in ation can be noticed at the grocery store, gas pumps and major retailers, to name a few. RushShelby Energy is not immune to in ation. is has increased the cost of electricity, materials and equipment we purchase daily to operate and maintain our system. For example, gas for our trucks increased, and materials such as wire, nuts, bolts, poles and transformers have more than doubled in cost. In some cases, it has become challenging to obtain these items.

Toward the end of 2021, global energy costs began to increase dramatically due to in ation, supply chain issues and most recently, the war in Ukraine. Coal prices have gone up 300% since last year, and natural gas prices have increased more than 100%. is has resulted in an increase of more than 175% in wholesale power prices. While we have added wind and solar power to the mix of electricity we purchase from Hoosier Energy. ere isn't enough green power produced to cover all our needs. Coal and natural gas represent more than half of Hoosier Energy's annual operating cost. More than 65% of RSE's operating cost consists of purchasing power to deliver to our members. To help cover these volatile costs, Hoosier Energy charges RushShelby Energy a Power Cost Adjustment (PCA), which is part of charges billed to the member. is PCA was negative for the last few years as gas prices were low, but now that coal and natural gas have increased signi cantly, the PCA is a positive number you see on your bill. While we cannot predict the future, the hope is that in the next year, gas prices will stabilize, level out or decrease.

RushShelby Energy has absorbed a considerable amount of these higher costs through sound management and stewardship. However, due to continued industry-wide increases, we must spend more on purchasing electricity and supplies than we can absorb. Unfortunately, this means we must raise rates to help us meet our nancial goals and remain scally sound. is change will take e ect on usage starting April 1, 2023, which will bill in May. is is the rst base rate increase since April 1, 2019.

In an article in our September's newsletter, we stated that we were in the middle of a rate study. e study showed that electricity rates were insu cient to recover the cooperative's power costs and operating expenses. A er careful review from management, board of directors and our rate consultants an overall increase of 5.4% increase to our base rates was necessary.

We provide electric service to six di erent rate classes. Di erent types of users have di erent load characteristics and con gurations for lines, transformers and substations. Each con guration bares other costs allocated appropriately to each rate class. Due to these di erences, each rate class may see a rate change varying from the average of 5.4%.

For years, we have charged much less in the monthly connection charge that covered the xed costs to maintain the quality, reliability and integrity of the services we provide to get electricity to your home. What the monthly connection charge does not cover is recouped in the energy charges. is current rate structure relies heavily on the sale of power to recover the xed costs such as power lines, equipment, right-of-way maintenance, taxes, insurance and more. is can be negatively a ected by signi cant variations in energy sales. Di culty covering the day-to-day operating costs or collecting more than what was needed can be the result of this. Moving the expenses where they need to be will level out this issue for RushShelby Energy. e monthly connection charge for all residential members will change to $55.00 per month while the kWh charges will decrease.

Looking ahead, only some people can speak with con dence about future energy policies and costs. While most of these factors are global and beyond our control, our energy usage is not. We encourage all our members to be mindful of how they use electricity daily and how they can save energy around the house. Please call RushShelby Energy or visit our website at www.rse.coop for energy saving tips to help you manage your energy bills.

We are aware that any increase under any economic condition can be challenging. Rates are the only source of revenue for your electric cooperative. As always, RSE sta and board of directors will continue to work diligently to manage costs and be good stewards of your cooperative's nances.