Paulding Putnam Electric Cooperative (PPEC) is pleased to announce there will be no general rate increase in 2017. This is the third year in a row, where members didn’t have to see an increase.
“The PPEC trustees, and employees work hard to deliver electric power that is reliable, safe and cost-competitive with our neighboring utilities. Be assured that we are working to keep your rates competitive, while still working to replace aging facilities, increase efficiency and improve our service reliability,” stated George Carter, President and CEO of PPEC.
The management team and all employees are charged with ensuring that efficiency savings are part of the budget process. A big part of the budget is a review of our electric rates, which starts with an update of the cost-of-service study, or the COSS, by our accounting department each year. The COSS breaks down all the investment necessary to serve each rate class, identifies all the costs associated with each rate class, and compares it to the revenue being generated by the rates for each class. With the study completed, the board of trustees can review the financial performance of each rate class. And after a careful review of the proposed budget and the COSS, the board determined that no rate increase was necessary for 2017.
Stable wholesale power prices are the main driver to stable electric rates. Wholesale power is nearly 70 percent of the cooperative’s total expenses; minor changes have major impacts. A 1% change in power cost is about $250,000.
Unfortunately, key indicators for 2018 are showing wholesale prices will rise. “The term “rate increase” is something no one wants to hear, but it may be a reality for 2018. Be assured though that we will continue to remain vigilant in operating your co-op with minimal expense, returning any excess funds back to our members in the form of capital credits. In fact, this past December we returned 1.4 million to PPEC members, bringing the total to nearly $20 million over the last 17 years. This is one of the hallmarks of the “Cooperative Difference”, and we plan to continue this practice as we are financially able to do so,” added Carter.
