Each year as Miami-Cass REMC’s CEO, I am privileged to address you, our members, at our member appreciation day/annual meeting. Here are a few highlights from my address to those in attendance.
It has been a whirlwind since we met virtually last year. We saw one our best residential housing growth years since 2007. Before 2007, we were growing at 3%. Since then, we basically had no growth, and some years we lost more meters than we gained. In 2021, we saw around 70 new meters, which wasn’t anywhere near the pre-2008 time frame, but still showed promise. Fast forward to 2022, and it is has started to stagnate except for a couple new large loads that will be coming online soon at the Grissom Aeroplex.
We are also, in conjunction with our power supplier, Wabash Valley Power Alliance (WVPA), building some long overdue infrastructure to tie our MaGrawsville and Bunker Hill substations together. The substations will be tied together with some brand new transmission lines, allowing our system to be a complete loop — providing us with more options to tie our substations together and to help with reliability. Speaking of reliability, our members saw an average of one hour and 32 minutes of outage time in 2021. The U.S. average is a little over two hours.
Financially the co-op remains very strong. We saw positive margins for 2021. The margins were slim; however, it is always our goal to keep margins small as we don’t want to collect more than we need to operate. Our system equity remains at a good level hovering around 60%. The U.S. average is close to 40%.
We have not had a rate increase since 2014, and we have no plans for raising rates in 2022. We are, however, feeling some downward pressure from our power supplier on rates. Inflation and up-and-down markets are affecting the cost of power in negative ways.
There has been an average of a 30% increase in the price of material along with extremely long lead times. Right now, if you want to order a new bucket truck, you’re looking at two and a half years for delivery. The same truck ordered three years ago would have taken approximately 12 months.
That is not the biggest problem we have seen, though. Transformer orders are in such a state they won’t even give us a lead time. Our operations department has done a good job mitigating our risk with ordering, and we are sitting better with inventory than other companies around us. Miami-Cass REMC has seen a 2.5% increase from our power supplier, but we are hoping the co-op can absorb the cost for the remainder of the year. When the year is over, we will analyze the data and see if a cost-of-service and rate study is needed for 2023.
Our fiber project is moving along. We have over 300 miles of wire in the air and underground. With all the projects that we have going on, we have close to 700 miles yet to go. We have been awarded several grants since our last meeting. All totaled, $6.5 million has been awarded, bringing our total income from grants and aid-to-construction to just a little over $14 million.
Our total project cost to build out Miami, Cass, Carroll and southeastern White counties is approximately $25 million. Unfortunately, the problems I discussed earlier — cost of material and lead times — is also hitting the fiber industry. In some cases it is even worse. In this current situation, there is no doubt it will cause ours and every other company out there problems in meeting their projected timeframe for builds.
Lastly, 2021 was a safe year. We had no lost-time injuries and only saw a couple fender benders and bumps and bruises. This year has started off the same way, and we will work to keep our system, workplaces and community as safe as possible.
We strive to be good stewards within the communities and organizations we serve, assisting when needed. I truly hope that when we meet again in 2023 that we can meet somewhere in person and discuss all the issues going on around us as if they are in the past. If that’s not possible, you can be guaranteed that Miami Cass REMC will be continuing to do our part to make our members’ lives as safe and happy as we can.