January 22, 2024

AT CHECH

A Message from the General Manager

As we take a moment to reflect on 2024, we want to thank our members for your trust and confidence in us. It has been our pleasure to provide you with reliable, affordable, and safe electricity over the past year. We are equally excited to have ensured that all our members now have access to affordable, reliable, and lightning-fast internet service. This allows residents to enjoy the rural way of life while experiencing exceptional internet connectivity that surpasses most urban areas.

During 2024, we did begin to see some relief from supply chain constraints. While material prices did not decrease, we observed some stabilization, which helped reduce some financial planning and budgeting challenges. Unfortunately, we have experienced significant increases in insurance premiums nationwide, and Cookson Hills Electric has not been exempted from this trend. The cost of labor, including contractor labor, has risen as well. CHEC utilizes contractors for larger electrical conversion projects, right-of-way clearing, and some fiber construction projects. Despite the cost increase, using contractor labor remains more economical for certain initiatives. By working with local contractors, we help funnel money back into the local economy, which benefits both CHEC and our community businesses.

Wholesale power costs have continued to rise each year, significantly impacting our overall electric service costs. Our wholesale power costs are our single largest expense, making up almost 70% of our total operations and maintenance costs. Wholesale power costs are driven by the demand for electricity and the cost of generating electricity. Demand for electricity can spike during extreme weather events that typically occur in the winter and summer seasons. Such peaks lead to higher wholesale power prices, which then affect what we pay as consumers of electricity. Generating electricity involves various costs, including fuel sources, maintenance of power plants and transmission grids, construction of new power plants, and investment in new transmission lines. All these costs impact the rates you pay as the end user.

Our power provider, from which we purchase power, announced a rate increase in the last quarter of 2024. The rate increase is scheduled to take effect in April 2025. Consequently, CHEC contracted with Guernsey, an engineering firm, to conduct a cost-of-service study to review existing rates and determine a suitable rate structure. The last overall rate increase for CHEC members occurred in 2014, and the monthly service availability charge increased in 2018. What does this mean for you, our members? Inevitably, CHEC will be implementing an increase in rates soon. This is part of the business we never look forward to because we know it impacts you and your family. We also know you all have felt the impact of inflation at the grocery store, in healthcare, property insurance, and about everywhere else you turn. In April 2025, rates for CHEC members will increase to support the increasing wholesale power costs and overall operating costs. We do not take this decision lightly, and the Board and staff will continue to work on finding ways to help contain costs wherever possible while maintaining the level of service you deserve and expect. The Board of Trustees will approve rates at the December 2024 board meeting (which was not held at the time of the production of this article). Members will be notified about rate changes through Hot Watts, our website, and direct mail. Please look for more information soon, as we aim to share updates with all members as they become available.

We wish you a blessed 2025, and again, thank you for allowing us to serve your electric and fiber needs.

Sincerely,

Juli Orme

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