Costs are rising all around us and, like electric cooperatives across the nation, LaGrange County REMC is feeling the financial pinch.
Prior to all the current economic fluctuations, our electric rates stayed remarkably stable for years. In fact, the last time LaGrange County REMC increased our base rates was 2012. We did increase our facility charge in 2019 which was part of a larger restructuring of our rates that actually decreased our overall revenue collection by about 1%.
Unfortunately, our 10-year streak of holding the line on base rates is about to come to an end. We will have to implement an increase of about 7% this fall.
Now, I don’t want to mislead you. Our wholesale energy costs have increased over that time period, and we pass those changes through to our membership as we incur them. But even those costs have been fairly steady until recently. Due to pandemic-related supply constraints and inflation, we experienced cost increases requiring us to increase our wholesale power cost twice in the past eight months. Your electric bill is up about 4% over last year due to these wholesale increases.
There is some good news, though. The Indiana Legislature repealed the Utility Receipts Tax, effective July 1. This tax was a cost that we were required to collect as part of our rate and then pay to the Indiana Utility Regulatory Commission. With its repeal, we will be decreasing rates by 1.4%, starting with your electric bills next month.
This fall, however, we will implement a base rate increase of about 7%. As I mentioned earlier, this will be the first base rate increase we have needed in a decade. As stewards of your resources, we strive to give you the best value possible for your dollar. We are proud that we have been able to keep base rates stable for such a long period, but the cost pressures have grown to the point where we can no longer absorb them or find alternative solutions.
While I’m cautiously optimistic these increases will be enough to continue to provide us with the funds necessary for operating and investments in the electric grid for the next few years, we face an uncertain future. All of us at LaGrange County REMC take our responsibility to you, our members, seriously. We will continue to work diligently to mitigate rate increases and find innovative ways to stretch the resources you entrust us with as far as we can. Our commitment to providing our communities with safe and dependable electric service at the lowest possible cost is unwavering.