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Cost-of-service study will help plan for the future

Power Systems Engineering will be conducting a cost-of-service study for ECE in early 2020. A cost-of-service study is a thorough audit of the costs to deliver electricity to your homes, farms and businesses. These expenses include: lines, poles, and transformers; equipment, such as bucket trucks; internal functions like billing, customer service, and maintenance; and purchased power. 

As I shared at the annual meeting, our power supplier, Great River Energy (GRE), experienced an excellent financial year in 2018. Because of this, there was no residential rate increase in 2019. GRE is having another good year and will not be increasing wholesale rates in 2020, so we are not anticipating increasing our rates, though small adjustments may be necessary.

We have different rates for different types of services, and each service has different costs associated with serving it. For example, the electrical requirements of a large commercial account are significantly different than the needs of a residential account. We account for those differences by creating a rate that meets the service needs of each rate category, while covering the cost to deliver and purchase electricity. 

Results of the study will guide staff in making informed recommendations to your Board of Directors about rate changes. The goal of the cost-of-service study is to protect the integrity and financial stability of your cooperative.

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