Currently all of us in Southern Illinois are experiencing the coldest winter months of the year and are consuming more energy than any other time of the year to heat our homes and businesses.  For many of us, this is the time of the year with the most energy consumption and subsequent highest electric bills that we will face for the entire year.  In this article, I would like to explain what your money is paying for and how your rate will change in the coming year.

Many of you already realize this but approximately 74% of your electric bill is to cover the cost of generating and transmitting your electricity over high-voltage power lines to your regions.  Your cooperative along with five other electric cooperatives in Southern Illinois own Southern Illinois Power Cooperative (SIPC) located at the Lake Of Egypt just south of Marion, Illinois.  This is where the electricity that we consume is generated and then transmitted over high-voltage power lines to the Cooperative substations located throughout Southern Illinois.  The fact that your Cooperative is part owner of its own generating plant is a strategic advantage and has saved Cooperative members a significant amount of money over the years.  Unfortunately, the costs to generate electricity over the past year have increased primarily due to the increased cost of fuels consumed.  In fact, the current cost of Illinois Basin coal is 117% higher than one year ago.  In addition, your Cooperative incurred a 5% wholesale power rate increase from SIPC on October 1, 2008.  These cost increases show up on your electric bill in the charge titled "Wholesale Power Cost Adjustment".  This charge was developed to only collect the needed increases in the cost of generating and transmitting your electricity through high-voltage power lines.

The remaining 26% of your electric bill is to cover the costs in distributing the electricity that members consume from high-voltage substations to all of the 23,500 Cooperative members served.  This includes constructing and maintaining a distribution facility that includes 35 distribution substations and 3,300 miles of distribution line (enough distribution line to stretch across the United States from Portland, Maine to Los Angeles, California and still have approximately 200 miles remaining).  This distribution system includes approximately 70,000 poles, 20,000 distribution transformers, 1,500 circuit reclosers and 180 voltage regulators.   As you can see, it takes a considerable investment to operate and maintain your Cooperative's distribution system.  In fact, in 2009 your Cooperative will need to invest approximately $5 million to operate and maintain the distribution system and approximately $4.1 million to trim and clear trees away from power lines in order to maintain and improve electric service reliability to Cooperative members.

Although your Cooperative has not increased the base rate to Cooperative members for the past two years, it has become necessary to implement a 3% base rate increase in 2009.  Your Cooperative realizes that members face their highest electric bills in the winter months due to high energy consumption and has forgone the necessary rate increase until April of this year.  Therefore, there will be a 3% base rate increase on all invoices received in the month of April.

Unlike other electric utility business structures that strive to produce profits for investors, your cooperative is a not-for-profit organization that strives to provide the highest level of reliable, quality service at rates just high enough to cover the costs of operation.  Your Cooperative will continue to strive to provide reliable electric service at the most reasonable cost.

See you next month and as always,

"We'll keep the lights on for you."