Tom Sobeck, President & CEO
It’s time once again for our annual review of expenses and their impact to rates and, while I’m frustrated, I feel a sense of optimism too. We’re addressing electric distribution rates (what our costs are to get the electricity from substations to your home or business) and we do have some control over those costs. We’ve provided a summary of those changes in this month’s magazine as well.
So, let’s start with the frustrating part. Last year, we began two ambitious projects—constructing a new headquarters and service center building and deploying an Advanced Metering Infrastructure (AMI) project. The PIE&G board was adamant about limiting the impact of both projects to member rates. PIE&G management conducted studies, engaged consultants, and presented all the options and details to the board. All analyses led to a resulting increase to electric bills of about $10 per month when all was said and done. Mind you, that $10-a-month figure is no small matter to your directors, and I couldn’t agree more. To that end, we took our tasks very seriously and worked extremely hard to advance our projects with the overall goal of remaining on budget. We were substantially successful in meeting that goal and we’re quite proud of that.
Then, as is often the case, life has a way of letting you know that you don’t get to control everything! Our power supply costs began to steadily increase because of economic and environmental pressures well beyond our control in northeast Michigan. As electric generation moves away from coal and towards natural gas and renewable energy sources, and as natural gas supplies are reduced due to increased demand, costs inevitably go up. It’s not my intent to promote one fuel or resource over another; I’m just stating our frustration with plotting a sound course, developing confidence in reliance on our plan and then having outside factors negatively impact that plan.
That is what happened a few months ago when a rate increase was needed to reimburse our supplier (Wolverine) for the difference between what we paid them to purchase power on your behalf, and what their actual costs were to supply it.
So, where’s the optimism in all of this? It may be of little consolation during a time of overall rising costs and inflation in our global economy, but your electric service is still very competitively priced when compared to other Michigan cooperatives and our investor-owned competitors. We’ve been providing reliable service for many years and that will continue. Another bright spot in this review is that throughout the construction and completion of our new HQ facility, we’ve been able to hold our natural gas distribution rates constant.
We will continue to strive to meet the challenge of balancing affordable energy with reliable delivery of energy services. As always, we appreciate your understanding and support, which are essential to our success. Thank you for the opportunity to provide you with essential services that make your lifestyles a bit brighter, warmer, and more comfortable.