Rate Forecast – No Change In 2023

The Cooperative Advantage – February 2023 CCL CEO Article

By Ruth Marks, MVEA CEO

Ruth Marks, MVEA CEOLast summer, the Mountain View Electric Board of Directors and Executive Leadership Team met to start drafting a multi-year strategic plan to serve as a roadmap with initiatives focused on the services we provide to MVEA members. I am excited to share that those efforts culminated in a strategy map that is deeply rooted in our mission to continue to provide safe, reliable, responsible, and affordable electricity to MVEA’s growing co-op membership through an era of rising costs and industry changes.

I am even more excited to report that we do not anticipate rate changes in 2023. Fiscal stewardship by MVEA’s Board has allowed the co-op to be resilient in balancing power costs with rate stability for the sixth year in a row. This is news we can all celebrate!

We know from member surveys and conversations that service reliability and competitive rates are two areas that are important to MVEA members. We also know the cost of providing reliable electricity has increased over the last couple of years due to a variety of factors, including inflation; labor and supply shortages; and the industry-wide cost of transitioning to clean energy. With these factors in mind, it is important to share that we do anticipate rate adjustments going into 2024, as our wholesale power supplier, Tri-State G&T, has indicated that it will be adjusting rates next year. Changes to Tri-State’s rate structure directly impacts the rates that MVEA pays for wholesale power, as well as the electric rates of our co-op members, because the expense accounts for 65% of our overall operating costs. We do not know the specifics at this time, but will share those details when they become available later in the year.

Looking ahead into 2023 and beyond, the initiatives on the strategic plan will play an important role in helping MVEA focus on infrastructure and process improvements. The improvements will help absorb rate pressures by ensuring we are working as efficiently as possible to continue to keep the value of electricity high and our operating costs low. The 2023 strategic plan focus areas are: safety; reliability and resiliency; affordability; member engagement; employee relations; and technology and innovation.

Even with a variety of rate pressures impacting operating costs (beyond the cost of purchasing wholesale power), the value of the electricity supplied by MVEA remains high. MVEA’s rates and fees are set to generate revenue to cover operating costs, pay debts on construction loans, and provide an emergency financial reserve — not to create profits. As a not-for-profit electric cooperative, any excess revenues that remain once all expenses have been paid are divided among MVEA members as capital credits.

We often talk about the value of co-op membership and the value of our services beyond providing electricity, but miss the opportunity to talk about the actual value of the electricity that we supply.

In our daily lives, there is an increasing demand for electricity. According to the Energy Information Agency, the typical U.S. household now uses more air conditioning, appliances, and consumer electronics than ever before. The average home also contains 10 or more internet-connected devices. Even with increased demand, an average day’s worth of electricity from MVEA still costs less than $5. Looking at recent numbers, MVEA’s average residential member uses 896 kilowatt-hours of electricity per month at a cost of $4.39 per day. Considering all the ways we depend on electricity, the power supplied by MVEA is a good value.

I hope you will connect with us and share your perspective as MVEA continues to grow to meet the unique needs of our co-op membership. It’s one aspect of membership that makes electric co-ops special: our desire to serve our members, the owners of the co-op.