Sustaining Reliable and Quality Service

As 2022 begins, we are facing rising costs in the goods and services needed to operate our system and purchase wholesale power.

As costs rise for businesses and individuals alike, as anyone who has bought a carton of milk, gallon of gas or a used car can tell you, the utility industry faces price hikes and supply chain delays for labor, equipment and materials needed to maintain electric grids.

In two examples affecting UEC, the cost of PVC pipe used to protect underground cables has doubled, and transformer metals including steel and copper are up by one-third.

With power purchases as our largest expense, we buy both our full share of hydropower from Bonneville Power Administration and additional power needs in the open energy markets. Our share of BPA power to us has been capped a decade ago.

While it’s good news that the net cost of our BPA energy rates has been kept down slightly for the two-year period that began in October, UEC’s transmission rates from BPA have increased by 15 percent.

Our power purchases in the volatile open energy markets rely on a mix of generation resources to serve member growth beyond our legacy BPA allotment. For 2022, UEC estimates over 20 percent of our power purchases are exposed to the energy markets. All UEC member growth from new homes, businesses and growing agriculture needs are subject to the influence of the open market, which is experiencing significant price increases.

Your cooperative has been reviewing the revenue needs to sustain reliability, provide quality service to our members and rates we charge our members, in view of the growing costs of doing business.

Our review has determined the need for an overall revenue increase of 6.5 percent. We will be adjusting electric rates within classes of service – residential, commercial, irrigation and industrial – with details announced in the February Ruralite and on our website, on how each rate class will be affected.

Rate adjustments needed to support the revenue requirements will be based on a basic principle of consumer-owned electric utilities – that each customer class pays the cost needed to serve them, and that one customer class does not subsidize another.

With any growing business, quality service and cost need to be balanced. UEC’s guiding principle of those triggering growth pay for their growth has worked well, yet the past two years have impacted us all and not all cost increases can be attributed to growth. Rate adjustments impacting your energy costs will not be effective prior to March 2022 usage.

As the year unfolds, we are working to find even greater efficiencies in planning, purchasing, maintaining and upgrading our system, with the goal of stabilizing future rate impacts without compromising the quality of service. Our overarching mission will not change – to serve our members with reliable, affordable and abundant power.

As 2022 begins, we appreciate the opportunity to serve you as our local communities grow in a world filled with uncertainties and unexpected challenges. Best wishes and good health to all in 2022!