Message from the CEO
Your Board of Directors is happy to report that a general rate increase will not be required for the eighth straight year! This news follows approval of the 2020 budget and financial forecast.
Kilowatt-hour sales for 2019 were 3.4% more than budgeted and 0.75% greater than sales in 2018. Margins for 2019 were $2,003,190. This was $359,503 over the budgeted amount of $1,643,687. Margins from electric sales were $822,046. The remaining $1,181,144 was derived from non-operating sources, such as patronage from Central Iowa Power Cooperative (CIPCO), our generation and transmission cooperative, and other non-profit cooperatives. After assigning some margins to Contingency and Statutory Reserves, the Directors will allocate the remaining margins to the 2019 members who consumed electricity from ECI REC.
The management team proposed to the Board of Directors a 2020 budget that both balances and prioritizes service reliability and rate stability. We will utilize technology and a skilled workforce to accomplish these goals. The 2020 budget includes estimated revenues of $21,855,705. This amount is lower than 2019 due to anticipated reduced kilowatt-hour sales in comparison to last year. A return of approximately $500,000 to members in patronage is also part of the 2020 budget and is derived from being a member-owner.
Providing reliable, safe, affordable electricity in an environmentally responsible manner is our top priority. A breakdown of the 2020 budget is provided below, allowing you to see where your dollars will be invested. The budget includes approximately $5,500,000 in system improvements. Some of the improvements include but are not limited to:
- New services construction – $113,011
- 51 miles of line replacement – $2,341,800
- Substation upgrades – $1,597,750
- New transformers, meters, and special equipment – $330,010
- Member services upgrades – $117,473
- Sectionalizing equipment (such as breakers and fuses) – $186,541
- Pole replacement – $175,000
- Technology – $30,000
These system upgrades are part of ECI REC’s 2017–2020 Construction Work Plan, which makes it possible to accommodate new growth while improving the reliability of your electric service at an affordable cost to our membership.
The budget includes $350,000 in preventative and ongoing line maintenance programs, including pole and URD testing, meter testing, tree trimming, transformer and breaker maintenance, and additional items that assist in keeping your lights on.
The graph below provides a brief summary of where member dollars were spent in 2019, now that the year has concluded.