The average residential member can expect an increase beginning with bills due November 1.
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The tornadoes that ripped through the service area of Farmers’ Electric Cooperative in late May were the final straw in the cooperative’s ongoing battle to maintain its rate structure until 2005.
“We had hoped to delay the inevitable rate adjustment until sometime next spring, but the tornadoes and the unexpected mild weather this past summer has forced us to raise our rates this fall,” explained Dan Bryan, executive vice-president/CEO of Farmer’s Electric Cooperative.
The average residential member can expect an increase of approximately nine percent on power bills, beginning with bills due November 1.
Commercial and industrial rates will also be affected in this rate adjustment, Bryan said.
The decision by the cooperative’s board of directors was made following the presentation of a cost-of-service study conducted by Toth and Associates, Inc., of Springfield. The study results were presented to the board of directors in June and the decision to make the rate adjustment was made unanimously at the July 22 board meeting.
The average monthly residential kilowatt-hour usage on FEC’s systems is 1,160 kWh. The monetary increase to members at the 1,160 kWh average will be about $8.57 a month.
FEC’s last rate increase was in January of 1991 and the cooperative decreased its rates an average of 4.9% in April of 1995. The results of the cost-of-service study showed the cooperative’s 1995 rate structure was no longer financially sound and could not be continued.
FEC has already received information from its power supplier that environmental costs will force Associated Electric Cooperative to raise its rates to the six generation and transmission cooperatives in Missouri a projected 8% every other year beginning in 2006 for at lest eight years.
FEC’s cost of doing business has risen dramatically since 1991, as well. Gasoline is over a $1 higher a gallon; power poles are much more expensive and the cost of the heavy equipment used by crews in the field has increased by tens of thousands of dollars.
“There’s never a good time for a rate increase,” Bryan said. “We have made every effort to minimize its impact to our members.”
The new rate adjustment follows nearly 14 years in which Farmers’ Electric Cooperative returned $8,685,604 in capital credits and another $262,433 in refunds to its members.
Members who read their own meters will receive their new rate books by mid-October.