Manager's Message

At Central Electric, we know how essential reliable electricity is to daily life, and we remain committed to providing power that is dependable, safe, and affordable. Maintaining system reliability, restoring power quickly when outages occur, and managing costs responsibly for our members continue to be our top priorities. However, the environment in which electric utilities operate today is becoming more challenging and costly.

For this month’s “Your Questions Answered” series, I want to take a look at a question that is on everyone’s mind right now: How are electric rates determined, and what factors affect your electric bill?

At its core, your electric rate reflects the cost of providing service. That includes the cost of purchasing power and the ongoing work required to maintain and strengthen the local electric system. As a not-for-profit cooperative, Central Electric sets rates as close to cost as possible, and every dollar collected is reinvested back into serving our members.

Today’s energy environment is more constrained and costly than in the past. Dependable, always available power resources are declining at the same time electricity demand continues to grow due to population growth, economic development and new technologies. When demand exceeds available supply, utilities are often forced into the open power market to secure additional power at higher and more volatile prices than long term generation resources typically provide. Wholesale power costs are one of the largest factors that influence electric rates.

In addition to the cost of power, maintaining a reliable local electric system is essential. Materials such as wire, poles, transformers, fuel and equipment cost significantly more than they did just a few years ago. Labor, contractor services, vegetation management, system upgrades and storm preparation are all necessary investments that help reduce outages and restore power more quickly when storms occur. This work cannot be deferred without increasing the risk of outages and longer restoration times.

Below, a graphic is included to illustrate the significant cost increases across the co-op over the last five years. Since 2020, the cost of wholesale power has risen by almost $10 million, which is a 31.38% increase. The co-op’s budgeted “cost per mil” for wholesale power, which represents the amount we effectively are purchasing generated electricity, rose from 85.29 per mil in 2025, to a forecasted 90.94 per mil in 2026. That’s a 6.62% increase in one year. Other expenses, such as the depreciation of distribution and plant equipment rose 40%, which represents the amount the co-op is spending on keeping up with replacing aging infrastructure. Construction, right-of-way maintenance and labor costs have risen by over 40% as well. All of these are real costs.

Relaying these numbers to you isn’t to shift blame, but to highlight real, concrete numbers on how we are battling continuing rising costs on multiple fronts. We continue to have active conversations on the need for addressing and expediting changes to public energy policy that impact wholesale power costs as well as managing rising operating costs in order to protect both the reliability and affordability of our nation’s and co-op’s electric service.

Because of these sustained increases in wholesale power and operating costs, effective June 1, a rate adjustment is absolutely necessary to keep up with the steeply increasing costs being experienced by the co-op. This includes a 7% adjustment to the kWh energy charge across rate classes and a $4 adjustment to the monthly basic facility charge. While we never want to bring news of a rate adjustment, maintaining reliability in today’s energy landscape requires continued investment. We are proud to maintain a 99.9% reliability rating for our members, and failing to make those investments would ultimately cost more, both financially and in reduced service reliability.

As your electric cooperative, we do not make these decisions lightly. Our Board of Directors and staff carefully review costs and long-term needs to ensure the cooperative remains financially strong while continuing to meet member expectations. Our commitment remains unchanged: to provide safe, reliable and affordable electricity while being transparent about the challenges we face and the decisions we make on your behalf.

We understand that any rate adjustment can be concerning, and we encourage you to reach out with questions. Thank you for your continued trust in Central Electric. We appreciate the opportunity to serve you and remain committed to navigating today’s energy challenges together. 

Until next time,