Temporary Two Month Rate Increase to Close Out 2022

Posted: November 1, 2022 at 7:00 am

This has certainly been an unpredictable year financially for everyone. Like all of you, we have been surprised by the unexpected and extreme cost increases this year. As a co-op, we have been most affected by the cost of natural gas which is used to generate electricity. Natural gas prices skyrocketed this year due to both global and domestic factors. The cost to produce the electricity we deliver to you has exceeded what we budgeted this year by $6M. Unfortunately, our rate increases earlier this year have not been enough to offset the additional cost.

Currently, we project a $1.6M under collection of revenue to meet expenses at the end of 2022. Closing out the year with a $1.6M shortfall will not allow us to meet the minimum operating margins required by our lenders. To bring our margins within requirements, it is necessary to increase rates for November and December to $190.15 for the first 1,000 kWh, up from $168.15. This will result in a $22 monthly increase for a household using 1,000 kWh. Rates will only remain at this amount through December to close out our fiscal year. On January 1, rates will be reduced based upon next year’s budgeted revenue and expenses, and we do expect next year’s fuel cost to be lower than 2022.

We know this is unexpected and was a tough decision for our Board of Trustees. We are thankful this is a temporary increase through the end of the year. To avoid further long-term significant cost increases and supply/demand issues, we do urge our national decision makers to consider how current energy policies are affecting every aspect of American’s lives. To learn how you can help, visit www.voicesforcooperativepower.com.