After years of managing to avoid a formal rate increase, the pressures of rising wholesale power prices and significant supply chain and inflationary costs have forced Orange County REMC to implement an electric rate increase. (Note: Although the wholesale power cost tracker has changed over the years, this is the first base rate increase since 2011.)

The cooperative performed a cost-of-service study in 2016 and again in 2022, and both studies indicated an increase in rates was recommended in order to keep member rates aligned with our costs. So the co-op went to work, and through extensive management of current expenses, we were able to avoid implementing the recommended increases for a few years.

That work to ensure each dollar is spent in our members’ best interest continues today. Since the last rate increase in 2011, our wholesale powers costs have increased by over $1 million per year. The cost of materials has increased significantly recently as well. Just since 2021, the costs of transformers have increased by nearly 84%. These costs are expected to rise another 50–60% due to the demands that the electric vehicle market is placing on the materials required to make them along with other market forces.

The cost of utility poles has increased over 20% and other materials fundamental to our system have all increased in price as well. The cost of a service bucket truck in 2017 was $156,000 and only had a six to nine-month lead time. Currently, the price of a service bucket is well over $200,000 and the lead time for this truck has exceeded four years.

One way we have been able to avoid increasing rates is due to the success of our subsidiary, Orange County Fiber. Since starting the fiber business in 2018, much of the increase in costs on the electric side has been alleviated by the positive margins produced by the fiber business since 2021. Much of the fiber construction has required the cooperative to borrow the capital to complete it, but the cost of capital has now been exceeded by the revenues that fiber generates. It is forecasted that the overall fiber margins will be adequate to help offset electric rates in the future, but in the short term, they are not enough. Because of this and the increases seen by our business are expected to continue, Orange County REMC must make a change to our rates.

As recommended by the 2022 cost of service study, an increase in the facility charge to $36 per month with no change to the energy charge is the rate change being implemented. The current facility charge of $26 per month is the lowest facility charge of all Hoosier Energy distribution cooperatives currently.

Increasing the facility charge aligns with the additional costs the cooperative has been incurring, and places our facility charge at the Hoosier Energy average. The proposed rate changes will increase a member’s bill by $10 per month or approximately $120 per year. The rate change will go into effective beginning with the November bill.

I understand that these changes will not be easy on our members. If you have any questions about the new rates, please feel free to call me on my cell phone at 812-865-0672. I would also like to emphasize that your REMC has many ways to help you save money and energy. For more information on our many programs, visit our website, myremc.coop and look under the “Energy Solutions” menu.