Message From the CEO
Budget season is one of my favorite times of year at ECI REC. It is a time to reflect on our financial success: Did we accomplish all we had planned? What will the new year bring?
We take budgeting very seriously at ECI REC—it is a detailed process that begins in October and ends in December with the Board’s review and approval. The management team works with our employees to determine needs in the coming year. We also evaluate the current and future energy usage of our membership. This is an extremely important consideration, as power supply cost represents nearly 60% of our expenses. Finally, we evaluate our technology needs, facilities and fleet improvements, depreciation, and long-term debt interest.
Your Cooperative does have debt—it is a necessary part of our $22.4 million five-year Construction Work Plan, which is an investment in our distribution system. The Work Plan and maintenance projects help us achieve our number-one goal of providing safe, reliable, and affordable power to our members. Since 2007, we’ve had an aggressive capital budget for improving our distribution system, and we project we will need to continue these larger annual investments through 2025.
Maintaining a power grid that includes 2,284 miles of distribution line (1,834 miles of overhead line and 450 miles of underground line) is an investment. That’s why the 2021 budget includes $330,000 in preventative and ongoing line maintenance programs, including pole and underground testing, meter testing, tree trimming, transformers, and breaker maintenance.
Members’ expectations of power usage have also evolved over the past 80-plus years—we have more technology at our fingertips than ever before, and renewable energy has entered our everyday lives. Nevertheless, the Board is happy to report that the budget indicates a stable year, and there should be no need for a rate increase in 2021. While it is unknown what the future may bring, you can rest assured ECI REC will remain agile in adapting to changes within the industry and whatever Mother Nature sends our way.
However, as you might recall, we restructured our rates in 2015, so the Facility Charge captured more of the fixed costs of making electricity available. According to ECI REC’s 2020 Cost of Service Study, the residential Facility Charge is only capturing 75% of these fixed costs to deliver electricity to our 8,985 member-accounts. Your Board of Directors is keeping a pulse on material costs and the general cost of doing business, which continue to increase. But your Board also understands that many members sometimes have a tough time making ends meet, especially after a year like 2020; the Board is very cautious about implementing large rate increases, understanding a few small increases versus one large increase is easier on our members.
At the end of the day, ECI REC’s goal will always remain the same: to provide our members with safe, reliable, and environmentally friendly electricity. At the same time, we all know there is a cost to fulfilling these goals and remaining progressive. No matter what the future brings, ECI REC will remain dedicated to putting our membership first and keeping your lights on.
