Holiday greetings, my friends! As we approach the end of the year, I’d like to share some co-op updates with you.
As I announced last month, our cost of service study is complete. Based on the findings, Decatur County REMC is implementing an overall rate increase of 1.28 percent, effective April 1, 2019. As a not-for-profit cooperative, we still need a sufficient rate of return to provide for the payment of interest on debt, provide a safety net for contingencies such as major storms, and provide necessary plant investments.
At Decatur County REMC, our goals with rate design are 1) fair and equitable rates, 2) each rate class pay the costs it imposes on the system, 3) fixed costs recovered through fixed charges, and 4) variable costs recovered through variable charges. The rate change is necessary to continue providing the valuable, reliable service you expect. Our future strategy includes continuing our aggressive right-of-way program and investing in our aging infrastructure to ensure our system remains reliable. We will continue to share more details about how this rate change will affect each member class.
Over the last several months, my team, the board and I have invested time in strategic planning. Through surveys and working groups we evaluated where our strengths and opportunities lie and have allocated resources to continue this work. From those strategic planning sessions, we established working groups that will help drive the future direction of Decatur County REMC.
Additionally, our team is diligently preparing a comprehensive budget for 2019 including projects and workplan for the board to review. This budget includes initiatives derived from strategic planning.
I have received questions from members regarding recent federal tax cuts in which some investor-owned utilities are positively impacted. As a not-for-profit cooperative, Decatur County REMC does not pay federal taxes and therefore, the 2018 federal tax reform will not affect DCREMC rates.
Our team of employees and board of directors wish you a safe and happy holiday season. We take pride in providing warmth and light to your homes and hope you take time to share some warmth and light within your families and communities this Christmas season. Merry Christmas!