No rate increase in 2018 budget
The Cuivre River Electric Cooperative Board of Directors has approved the 2018 budget without a rate increase, in spite of a 2.46 percent rise in wholesale power costs that will take effect in April.
Total expenses are expected to top $117 million, yet revenue is budgeted to increase due to growth and increased energy sales.
“Our continued growth has allowed us to absorb part or all of our power cost increases during the last several years,” says GM/CEO Doug Tracy. “Without this growth, we would be forced to pass on these increased costs to our members.” Tracy stepped into cooperative leadership last May and directed the budget development.
Wholesale power accounts for 67 percent of all cooperative expenses. If revenue projections fall short due to weather or economic conditions that impair growth, the board will have the opportunity to reconsider a rate adjustment later in the year.
“We will track revenue and expenses very closely,” Tracy says, “to make sure budgets are on target, and make changes only if necessary. As a not-for-profit, we strive to keep margins as low as possible while still maintaining financial stability and meeting our lender requirements.”
Many expenses are expected to decline in 2018.
“It has been a year of transition with many employees taking on different roles. The budget reflects these changes, and we were able to prepare the budget with a fresh approach. This was very valuable when we learned that wholesale power costs would increase in April. With this in mind, every effort was made to keep expenses in check.”
One local cost that will rise, however, is right-of-way maintenance.
“Increasing our right-of-way program provides better service and reliability for our members,” says Tracy. “While this is a large expense, it is consistent with our philosophy of serving our membership.”
The wholesale price increase is expected to be offset by energy sales, which are projected to rise. This factors in adjustments for weather, as well as growth of up to 1,400 in new meter installations. Full deployment of the cooperative’s automated metering infrastructure (AMI), which will be completed by mid-year, is also a factor. AMI technology is already reaping cost-saving benefits that improve service and outage response where the meters are in place.
“I am proud of the fact that we continue to do more with less as we increase efficiencies,” Tracy concludes. “Our goal has always been, and will continue to be, to provide superior service and to do so at the lowest possible costs.”