Like the businesses and families we serve, Ontonagon County REA continues to face rising costs and inflationary pressures.
What Is A Cost-Of-Service Study?
A Cost-of-Service study is a detailed financial analysis that helps determine the revenue needed to provide reliable electric service and set fair, accurate rates for the different revenue classes (or consumer groups) we serve. I have recommended to the board of directors that the OCREA conduct a Cost-of-Service study every three to five years to ensure rate equity and guide long-term operational and infrastructure investments.
The results of each study help us manage rising costs responsibly, while minimizing impacts to our members.
2026 Cost-Of-Service Study Earlier this year, the cooperative began a new Cost-of-Service study with Power Systems Engineering (PSE). The study will provide OCREA’s board with a comprehensive review of the cooperative’s costs and revenue needs over the next five years, accounting for economic trends, operational requirements, and changes in the energy industry.
PSE will evaluate all revenue classes and identify ways to protect the cooperative’s fiscal health while maintaining safe and reliable service. The study will also help the co-op plan for higher wholesale power costs in the long term.
While the final results are not yet complete, initial projections indicate that additional revenue will be needed to support current operations and necessary investments in our distribution system. Upon completion of the study, PSE will present multiple rate options to ensure fairness across all rate classes and continued value for our members.
Power Systems Engineering (PSE)
PSE is a trusted energy consulting firm with extensive experience working with utilities, municipalities, and cooperatives on resource management, renewable energy development, and generation, transmission, and distribution engineering.
PSE will present the Cost-of-Service study results to the cooperative’s board of directors and management team, tentatively at the July board meeting.
Looking Ahead
The Ontonagon County REA remains committed to responsible financial planning and keeping our members informed. Any decisions made regarding rates will be guided by our obligation to provide safe, reliable, and competitive energy both today and into the future.
