Rate Change Starting April 1, 2023

General economic forces are adding up in all areas of our lives. The impact of inflation can be noticed at the grocery store, gas pumps and major retailers just to name a few. RushShelby Energy (RSE) is not immune to inflation. this has led to an increase in the cost of electricity, materials, and equipment that we purchase every day to operate and maintain our system. For example, gas for our trucks increased and material such as wire, nuts, bolts, poles, and transformers have more than double in cost. In some cases, it has become difficult to obtain these items.

Toward the end of 2021, global energy costs began to increase dramatically due to inflation, supply chain issues and most recently, the war in Ukraine. Coal prices are up 300% since this time last year and natural gas prices have increased more than 100%. This has resulted an increase of more than 175% in wholesale power prices. While we have added wind and solar power to the mix of electricity that we purchase from Hoosier Energy. There is not enough green power out there to cover all our needs. Coal and natural gas costs represent more than half of Hoosier Energy’s annual operating cost. More than 65% of RSE’s operating cost consists of purchasing power to deliver to our members. To help cover these volatile costs, Hoosier charges RSE a Power Cost Adjustment (PCA) that is passed on to the member. This PCA was negative for the last few years as gas prices were low, but now that coal and natural gas has increased significantly the PCA is a positive number that you see on your bill. While we cannot predict the future, the hope is that in the next year the gas prices will stabilize, level out or maybe decrease.

Through sound management and stewardship, RSE has absorbed a considerable amount of these higher costs. However, due to continued industry-wide increases, we must now spend more on purchasing electricity and supplies than we can absorb. Unfortunately, this means we must raise rates to help us meet our financial goals and remain fiscally sound. This change will take effect on usage starting April 1, 2023, which will be billed in May. This is the first base rate increase since April 1, 2019.

In reference to the article in September’s newsletter where we stated that were in the middle of a rate study, RushShelby Energy (RSE) recently concluded that study. This study was conducted to ensure that electricity rates are sufficient to recover the cooperative’s power costs and operating expenses. RSE’s rate consultant, along with management, and the board of directors reviewed the results of the study in late September. This study revealed that it is necessary to implement an increase to our base rates of approximately 5.4%.

We provide electric service to six different rate classes. Different types of users have different load characteristics and configurations for lines, transformers, and substations. Each configuration bears very different costs, which are allocated appropriately to each rate class.

For years, we have operated by charging much less in the monthly connection charge that covered the fixed costs to maintain the quality, reliability, and integrity of the services that we provide to get electricity to your home. The amount that wasn’t covered in this monthly charge was made up in the energy charge. This current rate relies heavily on the sale of power to recover the fixed costs such as power lines, equipment, right-of-way maintenance, taxes, insurance and more. This can be negatively affected by large variations in energy sales. Difficulty covering the day to-day operating costs or collecting more than what was needed can be the result of this. By moving the costs where they need to be will level out this issue for RSE. The monthly connection charge for all residential members will change to $55.00 per month while the kWh charges will decrease.

Looking ahead, few people can speak with any confidence about what future energy policy and costs may look like. While most of these factors are global and are beyond our control, our own energy usage is not. We encourage all our members to be mindful of the ways that they use electricity on a daily basis and how they can save energy around the house. Please call RSE or visit our website at www.rse.coop for energy saving tips to help you manage your energy bills.

We are aware that any increase, under any economic condition can be challenging. Rates are the only source of revenue for your electric cooperative. As always, RSE management and staff will continue to work diligently to manage cost and be good stewards of your cooperative’s finances.