East Central Energy: News

A message from ECE President/CEO Steve Shurts

I've been studying ECE history since I came on board in 2010, including the financial records. The numbers show a co-op where growth has been the norm, and rates have remained very stable.

Before the economy took a nosedive in 2008, ECE had been consistently adding more than 1,000 services annually. Demand for electricity was on the upswing. In 2010, we added just 375 new services to the system and our average residential kWh used per month continued to decline.

Meanwhile, the cost of purchasing the energy we sell to you has been rising steadily. It's not the economy alone impacting Great River Energy (GRE), our wholesale power supplier. New directions in state and national energy policy have been contributors in driving power generation costs up.

As the economy boomed, GRE increased its investment in infrastructure to maintain reliability and prepare for a future of growing demand. They were able to sell surplus power to the wholesale market and use the revenue to offset the fixed costs of generating and transmitting electricity. Now, electric sales have dipped, fuel and other costs associated with producing electricity have increased, and there has been little need for surplus power in the market.

Then add the effect of Minnesota's renewable energy standard. To comply, GRE must purchase wind energy, even if there is an excess supply of energy available in the market at a lower price. GRE has been paying millions more for wind energy in 2011 and is budgeting similar costs in 2012. The state also has a conservation spending requirement, set by the Legislature in 2007, challenging GRE and its member co-ops to develop new and significant energy conservation programs. These are added costs at a time when energy demand is low and sales are down.

Combine these pressures with the uncertain direction of national energy policy and we have another reason why power costs are rising. For example, the Environment Protection Agency (EPA) is currently proposing to designate fly ash, a byproduct of coal-produced electricity, as hazardous waste. Instead of reycling the ash for use in concrete and other products, utilities would have to implement expensive storage methods. This is just one of several pending EPA actions aimed at our industry.

The trends of today are challenging our ability to maintain the rate stability that has been part of our legacy. A cost of service study is currently being done by an independent consulting firm to help us determine the necessary adjustments to your cooperative's rates and charges in 2012.

We know that the economy in our area still has not recovered and members are facing difficult circumstances. We will work with you on concerns about your electric bill and encourage you to call us with your questions. Our employees can provide you with tried and true strategies for saving energy and saving money, and they are happy to talk with you about your situation. Our commitment to you is to provide reliable, affordable electricity.

Steve Shurts
President/CEO