MIdwest Electric announces no electric rate increase in 2018! The last rate change was in 2010, so this marks eight years…and counting. Now that’s stability… and value! This good news is thanks to our employees, trustees, industry partners, and yes, thanks to our members.
Our employees know who they’re working for – the members. And that keeps us focused on being responsive, with efficiency in mind. We’ve refinanced loans to capture savings well into the six figures in lower interest expense. We regularly review work processes to eliminate unnecessary work and provide streamlined responsive service. We’ve incorporated office technology such as electronic imaging. Member-facing technology (Auto Pay and e-bill) provides convenience to not only you – but to us as well. Operations technology such as automated metering improves speed and accuracy for billing purposes as well as outage restoration. Having an experienced, knowledgeable, well-trained workforce also helps efficiency. In fact, we have the same number of employees today as we had in the 1980s. And we’re budget conscious. Our 2018 budget is just a 1.6% increase over 2017’s. And we operate within the parameters of that budget.
Our Board is comprised of nine members of the Cooperative, your neighbors. Their goal is to ensure your Cooperative operates efficiently, is committed to the community, returns patronage equity to the members, and provides reliable and affordable power. Working with management, the Board sets the policies and strategic direction for the Cooperative. And the Board has final say on our electric rates.
Power supply is the generation and high voltage transmission of electricity. It represents about 65% of our costs. This portion of our costs has been increasing just 1-2% per year in recent years. Earlier this decade, Buckeye Power concluded $1.2 billion in environmental upgrades to its power plants. You should be proud that we have among the cleanest coal power plants in the world. Since America’s 900 electric cooperatives provide the same service with a common business model, we share many resources. An example of this is in information technology – the system that provides our billing, accounting, mapping, engineering and outage management hardware and software. Partnering with our sister electric cooperatives and the National Information Solutions Cooperative, we’re able to provide technology features that would be cost prohibitive on our own. And we do so with the latest in cybersecurity. We also partner with other electric cooperatives for after-hours customer service; employee training; insurance; and legislative and lobbying efforts, which can have a big impact on the cost of energy.
About half of our members participate in our Load Management programs, which helps us save about $700,000 per year in avoided demand charges on our wholesale power bill from Buckeye Power. And the peak control times occur less than 1% of all the hours in a year. Members who choose electric for their water heater and heating system also help the Cooperative maintain stable rates. The increased sales help cover our fixed costs (remember the $30,000 per mile). And it helps those individual members, since electricity costs less than propane. Members who use our billing technology help improve the efficiency and productivity of our office operations. This includes Auto Pay through a bank or credit card, and e-bill. About 700 Midwest Electric members also belong to Co-op Owners for Political Action, and hundreds more respond to our occasional emails asking you to contact your legislator when a particular issue may impact the cost or availability of electricity. Legislation and regulations can have a big impact on power prices, so please consider joining.
A purpose of electric rates is to gather the revenue needed to pay for the distribution system as well as its maintenance and improvements. We have 1,600 miles of power line in west central Ohio, and 18 substations and metering points. Our system carries a value of $50 million. On average, it comes out to over $30,000 per mile of line, or $5,000 per member. Plus, we invest $2-$3 million each year in electric system maintenance, replacements, and additions. And consider everything electricity does for your family or business! And to think, you get access to all that for just 10 cents per kilowatt hour and $35 per month. The same as eight years ago. Value…and stability.