Since I’ve been talking about the increase in electric rates the last couple of months, I thought I’d give you answers to two of our most frequently asked questions.

HOW ARE MY ELECTRIC RATES DETERMINED?

LaGrange County REMC is a cooperative. The unique thing about our business structure is that those receiving the service (that’s you!) are also the owners of the business. As a cooperative, our financial goal is not to earn profit, but to simply cover our costs and make enough margin to continue to invest in the reliability and sustainability of the electric grid.

To that end, we do a detailed analysis of our total cost of operation and determine what drives those costs. We then assign those costs to our various customer classes based on those cost drivers so that everyone pays their fair share. We design rates that collect those costs and ensure we can continuously deliver the highly reliable service you have come to expect and rely on.

WHAT IS THIS MINIMUM SERVICE CHARGE?

To operate an electric distribution system, we incur two kinds of costs. The first kind are variable costs that happen when our members consume electricity. We purchase our power from the bulk electric grid on behalf of our members and distribute it to them when they need it. The more energy they consume, the more our costs increase. We pass those costs on to our members through a variable charge per kilowatt-hour.

The second kind of costs we have are fixed costs. When we build an electric line, we have to pay for the labor and materials to construct it, as well as the ongoing costs to maintain those lines. These costs don’t go away or change based on how much energy our members consume. In fact, we will have those costs even if no one uses any electricity at all!

For that reason, the minimum service charge portion of the electric bill is designated as a fixed charge to cover those everyday expenses we incur for building, operating, and maintaining our electric distribution system.

We understand that higher costs can be challenging. That’s why we continue working to help members manage their energy use and monthly bills.

We are actively controlling internal expenses wherever possible to keep rates as low as we reasonably can. In addition, we offer:

• Energy-efficiency programs and tips to help reduce use

• Budget billing options that spread costs more evenly throughout the year (visit our website for more information)

• Reviews and energy audits for members who want a closer look at their energy consumption

Rate adjustments are never welcome news, but they are sometimes necessary to ensure the cooperative remains financially strong and able to provide the reliable service our members depend on.

Please remember: LaGrange County REMC does not profit from a rate increase. Our mission remains the same — to provide safe, reliable electricity at the lowest reasonable cost. Rates are reviewed regularly to ensure they are fair, necessary, and aligned with the needs of the membership we serve. Visit our website to see the electric service rate tariff.

Thank you for being a member of LaGrange County REMC and for the trust you place in us every day.