Message From the CEO
Over the past several months, we’ve all witnessed the increasing costs of fuel and groceries, as well as supply chain issues and the overall impact these concerns are having on our economy.
The cost of materials is rising for ECI REC too. Due to supply chain issues, our timetable for procurement of those materials has also greatly lengthened. What once took a few weeks can now take months. Planning for a fleet purchase is now a years-long prospect.
The additional power cost prompted by last February’s polar vortex pushed our power provider, Central Iowa Power Cooperative (CIPCO), to increase our rates 1.5 mills/kWh. This increase will remain in 2022. So far, ECI REC has been able to absorb it through the Energy Cost Adjustment (ECA) and maintain our current rates.
However, CIPCO also recently completed a cost-of-service study. Based on the results, they will be moving to a five-part cost-of-service and rate design. It is unclear what impact the new rate design will have on ECI REC’s rates.
With all these factors in mind, it became evident as we prepared the 2022 budget that we will only be able to go so long without raising electric rates. In 2015, we restructured our rates so the Facility Charge captured more of our fixed costs and lowered the energy component. This adjustment was revenue neutral, as we did not collect more revenue as a whole The last overall rate increase of 2.5% occurred in 2012. Ten years without a rate increase is unheard of in today’s economy.
So, what is ECI REC’s plan regarding electric rates? We will work with our rate consultant and update our cost-of-service study. This study will give us a clearer picture of our future revenue requirements and help us develop an equitable rate structure. Your Cooperative will not rush this process. Our plan is to take time to educate our Board of Directors, employees, and membership as we prepare for a rate adjustment. Current projections show an increase in early 2023.
As to the 2022 budget, ECI REC has a robust plan to continue investing your dollars wisely to deliver safe, reliable, and environmentally friendly electricity. Members’ power usage needs have evolved, and there’s an expectation for reliable power 24/7. The budget will invest over $5 million in our electric grid, $300,000 in maintenance programs, and $200,000 in technology.
At the end of the day, electricity remains a good value. I am proud of our team, who does a great job keeping costs low and our level of service high. Nothing we do would be possible without the talented and dedicated employees who provide service to you 365 days a year.
We understand these times are challenging—your Cooperative is here to help. If you have questions about your account or are looking for ways to save energy, please give us a call at 877-850-4343.
