Most people don’t think about electricity until they are out of power or when they receive their electric bill. In the business of delivering electricity, Central Electric’s primary focus is on safety, reliability, affordability and meeting financial ratios required by our lenders. I believe your cooperative has been successful in meeting these goals.
Reliability & Affordability
It’s our job to make sure members have the power they need, today and into the future. Reliability statistics indicate electric service is available to our members 99.96% of the time. This is better than the state and national averages, and reliability should improve as we continue to upgrade infrastructure.
Affordability is more difficult to define, but the numbers prove our rates are below average. While we have many of the same expenses as other electric cooperatives across the country, Central Electric’s average revenue collected per kilowatt hour for residential and farm accounts was 11.5 cents in 2022 compared to the national average of 15 cents. Our average revenue collected per kilowatt hour for all account types is 9.5 cents compared to the national average among cooperatives of 12.5 cents.
Where Does The Money Go?
When you pay your electric bill each month, about 70 percent of the funds are used to purchase wholesale electricity from East River Electric Power Cooperative. The other 30 percent goes toward the operation, maintenance and expenses of supplying electricity to our members.
What Changed?
Like everyone, Central Electric and its industry partners have been negatively impacted by inflation. As a result of rising equipment prices, material prices, labor costs and interest rates, East River Electric is implementing a rate change in January of 2024 that will increase our cost of wholesale power.
In addition to that, over the past two years, Central Electric has experienced an $850,000 to $900,000 bump in annual operating expenses. The cooperative has been able to get by, but it’s not sustainable.
Management is working with the board to evaluate rate options for 2024. Central Electric recently had an outside firm complete a cost-of-service study that will be referenced to determine necessary changes. All rate adjustments are subject to board approval.
Committed to You
Central Electric is a not-for-profit cooperative governed by elected member-owners, so rate decisions are always made with members top of mind. Many employees are also on our electric lines, and those who aren’t have faced rate increases from other utilities, so I can honestly say we are all in this together, myself included.
We know you place a great deal of trust in us to be responsible with your money. That’s why we don’t charge more than necessary to operate our electric system. Unspent funds are returned to members in the form of capital credits each year. We think of the financial impact on members before we purchase equipment or complete upgrades to our aging infrastructure. The same is true when we determine rates for the electric service.
Central Electric’s commitment to providing reliable, affordable energy is as strong as ever. While electric costs will increase in 2024, electricity remains an exceptional value compared to other living expenses.
Take Control of Energy Use
SmartHub offers tools to track and manage energy use. Being mindful of when and how we use electricity can help minimize the impact of future rate adjustments. If you need assistance accessing SmartHub, call us at 1-800-477-2892. Until next month, be safe.