Aligning Rates and Cost of Power

As your Cooperative closed the books for the year 2025 and completed its financial audit, the financial records reveal an operating loss of approximately $2 million. Much of this loss was driven by the extraordinary storm activity that impacted Southern Illinois throughout the year. As you know, 2025 will long be remembered for the major storms that plagued much of our region. In fact, Winter Storm Blair was the most significant ice storm in your Cooperative’s modern history. In addition, your Cooperative experienced seven confirmed tornadoes in the Spring of 2025, which also caused extensive damage.

In mid-2025, your Cooperative considered implementing a retail rate increase to offset these losses. Instead, the decision was made to temporarily lower the Cooperative’s equity position in order to delay the increase. In total, the storm damage experienced by your Cooperative resulted in over $3.7 million in additional expenses and contributed to the financial loss for the year.

In addition to these storm-related expenses, your Cooperative has experienced significant increases in the cost of materials used to build and maintain the electric distribution system. These increases directly impact the cost of constructing, repairing, and strengthening the system that serves you. Over the past six years, the cost of transformers has increased 106%, crossarms 124%, primary wire 88%, and secondary wire 56%. An infographic in this center section illustrates the cost increases in key distribution components over the past five years.

Your Cooperative strives to keep electric rates as reasonable as possible. The most recent retail rate adjustments occurred in January 2021 when an 8.8% retail rate decrease was implemented. That decrease remained in effect until October 2023, when retail rates returned to 2020 levels.

Given the cumulative cost increases your Cooperative has incurred, including extensive storm damage and rising material costs, your Cooperative must implement a retail rate adjustment that will equate to approximately a 5% increase for the average residential member. The exact percentage may vary slightly depending on monthly energy usage. The rate adjustment will take effect with electric bills seen in your April billing statement.

In addition, your Cooperative is restructuring how the Wholesale Power Cost Adjustment (WPCA) is reflected in retail rates. The WPCA will continue to appear as a separate line item on your monthly bill, however, moving forward, a portion of that charge will be moved directly into the retail energy rate. This WPCA change is revenue-neutral and will not increase your total charges. The energy (kWh) charge will appear higher than in previous months; however, the WPCA charge will appear lower than in previous months. This restructuring will allow better alignment with retail rates and the cost of wholesale power.

Your Cooperative’s rates consistently rank among the lowest in Illinois. In 2025, your Cooperative’s electric rate for the average residential member ranked second lowest out of 25 electric cooperatives in the state. Even after this adjustment is implemented, your Cooperative’s retail rates will remain among the lowest in Illinois.

We recognize that every dollar matters for the families and businesses we serve. That understanding guides the decisions your board and leadership team make. While maintaining a reliable electric system requires ongoing investment, we remain committed to controlling costs wherever possible and balancing affordability with the dependable service our members expect.

As a not-for-profit organization, your Cooperative does not operate to generate profits for shareholders or investors. Every dollar collected is used to purchase power, maintain and strengthen infrastructure, restore service after storms, and ensure the long-term financial stability of your Cooperative. On behalf of the Trustees and all employees, we want you to know that your Cooperative is committed to providing reliable and quality service while keeping rates affordable. We thank you for the opportunity to serve you.

See you next month and, as always, “We’ll keep the lights on for you.”