Your cooperative continued to perform well in 2023. Although we saw kilowatt-hour purchases and sales decline by more than 5% each — mostly due to moderate weather — financial goals were still achieved. Total margins exceeded $4.3 million and were above budget by $809,000, or 23%. This was achieved due to lower operating expenses (under budget by 6%) and fixed expenses (on budget) and a larger-than-planned capital credits allocation from Buckeye Power. Management and employees did an outstanding job holding down expenses during the year. 

The most significant expense, wholesale purchased power from Buckeye Power, averaged nearly 8 cents per kilowatt-hour (kWh). Purchased power costs were lower than budget due to lower kWh sales. That said, increasing transmission rates again upped our wholesale power costs. The increased power cost impacts the wholesale power cost adjustment (WPCA) on all member bills. This adjustment averaged .012 per kWh sold last year. 

To provide perspective, transmission prices have increased significantly in recent years. After electricity is generated at our plants, mainly Cardinal Power Plant in Brilliant, Ohio, that electricity is then carried over the transmission grid to our local substations. In the past, transmission costs were roughly 10% of the Buckeye Power bill. Now, those costs represent 24% and are expected to continue to increase year over year. 

The cooperative continues to grow, rebuild, and replace old lines and electric facilities. PPEC continues to see a home-building boom in and around the New Haven, Indiana, territory. 

Maintaining our entire electric plant — poles, wires, transformers, and other equipment needed to supply reliable electricity your homes and businesses — has been challenging due to long material lead times and continued cost hikes. Since 2020, material prices are up between 40% and 60% for everyday equipment. A 50 KVA pad-mount transformer alone saw a 72% price jump in the four years since our last work plan. These surging costs and long wait times challenged our employees to work diligently and keep supplies in stock to meet our members’ needs. 

PPEC invested more than $5 million in plant last year to keep power safe and reliable, but after analyzing the co-op’s cost-of-service study, it’s clear a rate adjustment in 2024 is necessary to cover PPEC’s increased costs of doing business. The cooperative’s last distribution rate increase was in 2018, meaning PPEC has delayed an increase for six years to minimize the impact on members. 

Please remember — PPEC is not-for-profit. Any profit made in the year is returned to members as capital credits. In 2023, PPEC returned $2.5 million in capital credits to more than 23,000 current and former members. 

I am incredibly pleased to report on the financial strength of the cooperative. PPEC remains financially strong and able to meet the future needs of cooperative members. The accounting firm of Bashore, Reineck, Stoller, and Waterman, CPAs, (BRSW) has audited the financial records of the cooperative as of December 31, 2023. The audited financial statements may be reviewed at the office during regular business hours.