Manager’s Message – February 2017

Dear Co-op Community Members:

Down the Line

What does it mean to be a member of a co-op community in today’s world and, specifically, an electric co-op community? More than you may realize.

First, a co-op is a not-for-profit organization. Rate increases don’t maintain a profit for shareholders. The co-op exists to provide service to its members at cost.

Second, a co-op is a federal tax-exempt organization. This helps keep your electricity costs lower because the co-op doesn’t pay a federal corporate income tax.

You may have heard about investorowned utilities returning money to their customers in 2018 because the company expects a smaller income tax bill. Those customers will now get to experience what electric co-op members experience every year with capital credits. If in any year Lane Electric collects more in rates than is needed for expenses, capital credits are allocated to each member based on electricity use.

Third, a co-op’s core principles and values are embodied in the Seven Cooperative Principles: 1. Voluntary and Open Membership 2. Democratic Member Control 3. Member Economic Participation 4. Autonomy and Independence 5. Education, Training and Information 6. Cooperation Among Cooperatives 7. Concern For Community Lane Electric Co-op is a grassroots community business. As a co-op member, you have a voice in the co-op, which exists to serve you, its member. You elect community-minded

neighbors to serve on Lane Electric’s seven-member board of directors. They, in turn, hire a general manager to prudently oversee and plan co-op operations.

How does this all affect the recent $4 increase to Lane Electric’s fixed basic charge for all rate classes? The increase is needed to provide service at cost, not for profit. The Lane Electric Board of Directors reviewed staff’s budget proposal in depth to provide transparency into the budgeting process.

The board concluded additional revenue was needed to maintain the financial health of the co-op.

An increase to the fixed charge instead of the kilowatt-hour use charge avoids overcollecting money from members if unusual weather causes greater electricity use.

Lowering the single-phase demand threshold to 31 kilowatts fairly allocates more cost to those members using greater system capacity.

In other words, when a rate increase happens for Lane Electric Co-op community members, it happens because it is the responsible thing to keep the co-op financially healthy for its community.

Don’t forget to check the Capital Credits to see if you have capital credit money to collect.

Matt Michel, General Manager