Rate adjustment in effect on April 1
Like almost everything else in our world’s current economy, global energy markets continue to be under stress. Because wholesale energy costs will be higher as 2023 progresses, the Cuivre River Electric Cooperative’s Board of Directors approved a residential rate adjustment to go into effect on April 1, 2023. The increase equates to an average of about 9.5% for members. This also includes a 10¢ adjustment to the monthly service availability fee. Average cost increases will vary with residential members’ monthly use.
The 2023 increase is due to a combination of reasons, including rising costs in prices to generate, transmit and distribute electricity, and in supplies and equipment. Both CREC’s generation and transmission companies are experiencing significant increases in the costs of fuel, equipment, transportation, and maintenance of plants and lines. These amount to over 65% of the total expenses for CREC. With increases in both energy and demand charges passed along to CREC, the co-op’s power costs will soar by over 11% this year, with additional increases scheduled for the next two years. Additionally, expenses related to required distribution equipment such as wire, transformers, conduits, poles, and vehicles continue to rise due to inflation and supply chain issues. In some cases, prices for equipment have risen over 300%. The cost of CREC’s inventory on hand has increased by three times just in the last two years.
“A rate increase is never desirable but necessary for the cooperative’s economic resilience,” said CREC President and CEO, Doug Tracy. “We understand these are extremely difficult times with inflation and the costs of all goods and services rising. As your energy partner, we try to absorb as much of an increase as possible.” However, the increases to CREC this year, and those scheduled for the next two years, Tracy said, are so large that the cooperative is unable to absorb the full amounts. “We realize a rate adjustment at this time will be difficult for some of our members, and we will do all we can to assist with energy efficiency, conservation, and rebates.”
The delivery of safe, reliable, and affordable energy to CREC members is paramount, Tracy said. “Continuing to do so as well as upgrading and maintaining our infrastructure and keeping the co-op financially sound means that we must regularly review our rates and implement adjustments if they are needed.”
The U.S. Energy Information Administration (EIA) anticipates that the average retail electricity price will rise to 15.23¢ per kwh in 2023. Even with the adjustment, CREC’s rate keeps the co-op as one of the lowest-cost utilities in the nation, Tracy said.
This article is from the April edition of Current Times/Rural Missouri. Click here to read the full magazine.