This year, Kankakee Valley REMC made a significant investment in its electrical system to continue to improve system reliability for member-consumers. Over $5 million was invested in electric plant replacements and improvements, bringing the total utility plant held at year-end to just over $48 million. All assets held by KV REMC totaled $70 million, which represents an increase from the prior year of over $4 million. This increase was driven by the investment in system integrity. The cash position stayed steady and there were no other substantial changes in assets held.
The total debt of the cooperative increased for the first time in five years to aid in that investment, but the increase was only $165,000. The remainder of the investment was offset by equity ownership by the member-consumers, which grew around $3.5 million in the current year. As of the end of the year, member-consumers owned equity in the cooperative totaling $48 million. In addition, $422,354.31 worth of Wabash Valley Power Alliance patronage equity was returned to the member-consumers during the year.
The revenue collected by KV REMC decreased in the current year by $800,000 compared to the prior. This was driven by lower electricity use which, due to a mild weather year, was the case throughout the state. This decrease in revenue was offset though by a total decrease in operating expenses just over $4.5 million. Much of this decrease was driven by a lower cost of power purchased in line with the drop in use. As always, KV REMC is designed to only collect from our member-consumers the funds necessary to serve the membership. During the year, we collected $36 million to operate the utility. KV REMC expended a total of $32 million to purchase the power and cover the cost of operating the utility. As mentioned before, another $4 million was spent to invest in utility plant. Including the amounts borrowed in excess of repayments, KV REMC’s cash position increased by $350,000.
Your cooperative was able to increase the investment in the system’s integrity, increase the margins by offsetting lower revenue with cost savings, and remain in line with the goal of only collecting from our membership the money necessary to provide service.
This year, your cooperative conducted a cost of service study and we are pleased to report there was no recommended change to the member-consumers’ electric bill. KV REMC has avoided a rate increase since 2012.
The financial position of KV REMC remains strong.