Rate Adjustments And The Transition Into The 21st Century

By Tom Sobeck, President & CEO

Each year as the financial audit of our operations nears completion, I start to wonder, will this be the year that last year’s performance will impact our rates? After six years, it finally happened. Electric rates will need an adjustment in 2019.

The last distribution rate increase that was approved by your board of directors took place at a special meeting on March 26, 2013 (six years ago), when the overall increase to revenues was set at $865,430. The good news is that, even after six years, the increase to revenue is expected to be lower than the last, or about $617,000.

It is noteworthy that, despite rising costs (labor, fuel, materials, etc.) over the past six years, we’ve managed to keep electric rates stable, thereby limiting this increase to about 1.76 percent of our overall electric revenue. I wish I could say “electric rates won’t need adjustment for another six years,” but there are necessary investments on the horizon which will impact rates. Our building, now over 60 years old, is no longer serviceable, and we’re one of only a few utilities in the U.S. without Automated Metering Infrastructure (AMI). Both of these initiatives are essential if we are to maintain reliability and service quality. The scope of these projects is significant, and the cost will impact both electric and natural gas rates. However, for PIE&G to remain viable for another 60 years, we must consider our facility to be just as vital to successful operations as AMI is to improve service—from billing to outage restoration and reliability. As I’ve indicated in the past, we are also extremely mindful of the need to maintain affordable service, and we will thoroughly investigate and review all options for both projects.

We’ve managed to operate by making do with our old building, and our old-fashioned “member read” metering system for much longer than anticipated. The time has now come to transition our operations in a more modern and efficient direction and to upgrade our technology into the 21st century. We recognize that AMI has its critics and we are sensitive to these concerns. As we move forward, we will strive to meet the expectations of our entire membership regarding cost, service quality and reliability along the way.