No Rate Increase
I am very pleased to announce that your electric rates will not increase in 2010. This certainly wasn't the forecast last year, when I told members attending the Annual Meeting an increase seemed very likely. I'm happy to eat those words.
Your Board of Directors was able to approve the budget without asking more from you during these challenging economic times. The primary reason: interim relief in escalating wholesale power costs, which accounted for nearly 70% of our expenses in 2009. Five years ago, they accounted for just 61% of expenses.
In recent months the price of natural gas has normalized, coal costs have been stable, and hydro has been plentiful. Wind power development also continues. This is good news for all of us, but we know our reprieve may be short lived. Costs related to power production could change quickly and have a direct impact on wholesale prices. It also seems likely that climate change or "cap and trade" legislation will add a premium to future wholesale prices. We are pleased, however, that even with the challenges we've faced in recent years, our current rates remain among the lowest in Missouri and in the country.
Here's more good news. Even as the national economy struggles, we continue to grow modestly. We project that Cuivre River members' energy use in 2010 will surpass 1.2 billion kilowatt hours, and we expect revenue to exceed $100 million for the first time in our history. These are new benchmarks for us.
As your cooperative, we rededicate our efforts to maintaining operating efficiencies we have achieved in recent years and holding the line on the expenses we can control. At the end of the day, we are always mindful of who's paying the bill, and we are grateful for the opportunity to serve you.
Dan L. Brown
General Manager/CEO