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Rate Increase on the Horizon
Soaring regulatory, fuel & rail costs drive wholesale power costs higher

For the past several months Grundy Electric has included rate increase articles in the Rural Missouri publication. The overall cooperative rate increase of approximately 9% is designed to cover the significant increase in wholesale power costs. This rate increase will be reflected on the members’ May electric bill. The exact rate increase to each member will vary based on member usage and current rate classification, however, all rate classifications will receive a rate increase. “We want to be assured that our member-owners, are well aware of the upcoming rate increase and the reason for it,” stated general manager, Scott Wilson.”

Gasoline prices have declined, so how can you state that a rate increase is due in part to increased fuel costs?
One of the main reasons for the wholesale power increases being handed down by our power supplier is the cost of fuel. In this case, we’re talking coal and natural gas, not gasoline and diesel. Currently coal is used to generate approximately 80% of the electricity in Missouri. Consider this: At its coal-fired power plants, Associated uses 10 million tons of coal per year. Just a $1 increase in the cost of a ton of coal would trans-late into $10 million. But Associated is seeing increases in coal prices that are much higher than $1 a ton. Projections indicate that costs for this fuel will continue to increase due to several factors, including transportation charges and increasing world competition for U.S. coal supplies.

How do environmental regulations impact my electric bill?
In the past 13 years, our power supplier has invested $650 million to reduce emissions at its coal-based power plants. It is estimated that Associated will spend $330 million to meet new environmental regulations issued by the Environmental Protection Agency. Meeting existing and future environmental regulations will have a huge impact on rates for cooperative members. This is why we ask the membership to join us in the Our Energy, Our Future campaign. So we can continue a dialogue with our legislators in Washington and ask them to keep our rates affordable when looking at new climate change legislation.

How is the demand for electricity growing when I don’t see a huge number of new homes being built in our area?
Demand for electricity doesn’t necessarily mean new housing construction. Our homes energy consumption continues to grow as we en-joy the latest gadgets and electronics. Multiple items that consume energy 24 hours per day are plugged in all around our homes waiting to be used. All these comfort and entertainment features add up to increased usage. So existing homes are using more energy each year, thus increasing demand.

Are other cooperatives raising their rates?
Yes, utilities across Missouri and the nation are being influenced by the same factors as Grundy Electric. Most utilities are witnessing increasing wholesale power costs due to rising expenses to meet environmental requirements, in-creased fuel and transportation charges and mounting construction costs for new power plants.

What is Grundy Electric doing to keep costs down?
Grundy Electric’s distribution costs are also experiencing upward pressure due to increased costs, growing demand and capital investment required to maintain the quality and reliability our members expect. Rising costs for steel, copper and other building materials used within the electrical industry continue to skyrocket. Grundy will continue to manage its operating costs in an efficient manner. We are committed to reducing costs within our control.

So, what is next?
Members will continue to see a greater emphasis on energy efficiency nationwide as costs and demand continue to rise. Together we will learn to use energy smarter. In 2009 Grundy Electric will again ask our members to assist us in a dialogue with Congress as issues affecting electric rates come to the forefront. We want you to join us in keeping Washington informed to be sure that public policy meets members need for affordable electricity here at home.

Grundy Electric will continue to manage operating costs in an efficient manner while providing our members with safe, reliable, reasonably-priced electric ser-vice. If you should have any questions regarding this rate adjustment, please do not hesitate to contact our office at (660) 359-3941 or 1-800-279-2249.

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