Cost of service study

Posted on Feb 21 2024 in Jasper County REMC
Jon Rich

Even though Jasper County REMC operates as a not-for-profit cooperative, we are not immune to the rapidly increasing market power prices and inflationary pressures on material costs. We are always looking for ways to control our costs, and at the same time, we must look at the market we are in and try to forecast for the future. We have years of data to lean on, but as you might have noticed in your own life, a pandemic, supply chain issues, and inflation have created a volatile environment.

To help guide us, one of the tools we use is a cost-of-service study. This includes an assessment by an outside vendor specializing in electric rates and an internal review. We are in the preliminary stages of a cost-of-service study, which prompted our board of directors to take action. Our current data has led us to a facility charge increase of $4 per month for all rate classes except industrial. This increase will become effective for the April billing period and will be reflected on the bill due in May.

This information might lead you to ask, “What is a facility charge?”

The facility charge is a flat fee that allows us to collect the money it takes to maintain and upgrade about 1,200 miles of line and all equipment, substations, and poles necessary to get power to your homes and businesses. These funds also ensure that your cooperative has employees, programs, and services to benefit the members. This monthly charge is a fair share investment that helps to ensure there is power when it is needed. When you need electric power, all you have to do is flip a switch or plug into an outlet. What happens before that flip of the switch is a significant commitment of time, equipment, facilities, and people your cooperative already has in place to ensure that power is available when you need it.

It is important to remember that we are not motivated by profit. The extra revenue is of no benefit to our business model. Our motivation is to serve the members of Jasper County REMC with the most reliable and affordable energy as efficiently as possible.

The cost-of-service study is an integral part of the overall financial health of your cooperative. I will continue communicating about our study as it progresses over the next few months. Our board and a majority of our employees are also members of Jasper County REMC, and our whole team is dedicated to providing reliable and affordable electricity to the members.