Every month, CEO/General Manager Tony Mallory has a message for our members in Your Co-op Connection in Rural Missouri.
March 2024
No rate increase planned in 2024
Board discusses long-term plan to manage cost pressures
In March, many people look forward to St. Patrick’s Day as a time to be thankful for good luck and to celebrate. The start of spring is another great reason to be in a good mood.
This year, Crawford Electric’s consumer-members have another reason to be happy. There will be no increase in your electric rates this year!
Perhaps that’s surprising to you. After all, price increases in the wider economy have impacted us all for the past several years. Here at the co-op, we’ve been working through round after round of supply chain problems and material-cost increases. You may recall that back in January, I told you about an 11% increase in the price Crawford Electric must pay for the wholesale electricity we deliver to you this year.
Putting together our 2024 annual budget was a difficult exercise.
That’s why it’s an especially good thing that we have been working hard for the past several years to be in a position to manage through tough times. I told you back in 2018 about our plan to use “deferred revenue” to help stabilize rates. Basically, when we had good year-end margins, we were able to save for a rainy day, so to speak. We also took advantage of the low-interest-rate environment at that time, saving enormous amounts of interest expense. We also maintained robust activity in system maintenance and improvements, recognizing that the work had to be done to serve the members, and it would only cost more in the future.
The good news is that the hard work of the past few years is going to keep your rates stable this year.
We’re also going to be able to continue to do the things required to deliver on our core mission of service to you. This includes continued investments in the strength, safety and capacity of our electric grid.
While I’m confident we’ll be able to manage well in 2024, the longer-term outlook is not so rosy.
For the foreseeable future, our power suppliers are advising local co-ops to expect continued increases in wholesale power costs. This is needed so they can address critical infrastructure upgrades, as is the case across the country.
Electric rate increases are definitely on the horizon. Many of our neighboring utilities have already implemented rate hikes for this year. Although each organization is unique, we’re all facing the same cost pressures.
That’s why your board of directors and I will be working this year with the management team at Crawford Electric to devise a longer-term rate strategy. Basically, we’ve already agreed that kicking the can down the road isn’t a great strategy. Rather, your co-op wants to have a well-thought-out plan to take us into the future.
We already have some basic agreements on how that should look. No one wants sudden, large, unexpected hikes if it can be helped. No one wants the co-op to cut the budget to the bones and fail to deliver the service members expect. No one wants members to face multiple hoops to jump through or complicated formulas to figure out how to save money on their bills.
Our basic philosophy is that scheduled, small and manageable rate adjustments would be the better way to go. Exactly what that means, when we would plan to start that, and exactly how it might be structured is still being discussed.
So, for now, let’s enjoy the end of winter, the start of spring and the luck of St. Patrick’s Day – all with no electric rate increase.