PRESIDENT'S MESSAGE By Todd Ware, President & Chief Executive Officer As a cooperative, there are various financial models and goals that we look at in different time frames. Each year, we do an annual budget. About every four years, we do a cost-ofservice study, and on an as-needed basis, we do a ten-year forecast. Each model provides us with a different perspective on our financial picture. Todd Ware They all focus on ensuring we generate enough revenue to operate our business on both a day-to-day basis (operating expenses) and capital basis (long-term reliability). Over the last several months, we have been working on a new ten-year forecast to update loan documents with our bank. The results of the forecast show that our revenues need to catch up with increasing prices. We also see this in our results for 2023, as we are lagging on all our financial metrics. As you know, inflation has been at record-high levels over the past four years, peaking at 7% in 2021 and 6.5% in 2022. We have tried to absorb these costs, knowing you are experiencing this in other aspects of your life. This has become difficult as items specific to our industry have increased in price over the last four years. In the chart below, you can see many of the large ticket items we use to bring you safe and reliable energy have increased by more than 50%. At the same time, our distribution rates have only increased by 1%.
We have reached a point where The Energy Cooperative can no longer absorb the increased costs, and there will be a rate adjustment on January 1, 2024.
ELECTRIC MEMBERS
The monthly facility fee adjusts from $30 to $34 for residential members. The adjustment represents about a 2.5% increase in your bill on a year-over-year basis. Each commercial class will see an increase in their monthly charge that will see an adjustment of about 3%. There will be no change to the distribution energy charge.
NATURAL GAS MEMBERS
The monthly facility fee for residential members adjusts from $24 to $26.50 per month. The adjustment represents about a 3.6% increase in your bill on a year-over-year basis. Each commercial class will see an increase in their monthly charge that will be an adjustment of about 3%. There will be no change to the distribution energy charge. More details about the commercial rate class changes can be viewed at myenergycoop.com/rates.
COOPERATIVE DIFFERENCE
Recent member surveys tell us that price, service and reliability are the most important to our members. We work hard to control our expenses. We do not like applying rate adjustments; however, these changes are necessary. The Energy Cooperative Directors and employees are committed to providing you with a good value for our service. After all, we are a cooperative. We exist for our members, not to make a profit for shareholders. That’s the cooperative difference.
3 Chart: Inflation over the last four years comparing every day household items and our industry supplies
