Rate adjustment announced at 2009 Annual Meeting

June 27, 2009 – In his address to members attending the Annual Meeting, General Manager John Noss said that although Firelands is in good financial shape, because of rising costs, the cooperative will have to adjust its rates in the fall. The adjustment will take effect September 23, 2009, and will appear on the bills members receive in November.

The adjustment will add $2 to the monthly distribution charge for all residential accounts, and a proportionate amount for large power users.

Increasing costs, and reduced revenues due to the current weak economy and mild weather, created the need for a rate adjustment. “We have reduced costs in several areas and continue to look for more ways to cut or eliminate expenses,” said Noss. “Unfortunately, I expect more rate adjustments, especially in the cost of wholesale power, on a regular basis—at least every year—for the foreseeable future.”

Noss made it clear that the rate adjustments announced in 2009 by Firelands and also by Buckeye Power, do not include the staggering increases expected from the Cap and Trade Climate Change legislation currently being pushed through congress by the Obama administration. That legislation is expected to increase electric bills for all consumers by $50 to $100 or more per month.

The bottom line
There is a fixed cost for owning and operating the Firelands Electric distribution system, and in addition, there is a cost associated with the purchase of kWh of electric energy. The most fair and equitable approach is to charge each member for his or her fair share of the total fixed distribution system cost each month, and then add the cost of the kWh of electric energy used.

One of the advantages of being a Cooperative member is that we have cost-based rates. That means our members' rates are based on the actual cost of providing electricity, not on what the market will allow. We will continue to work diligently to provide our members safe, reliable electric service at a competitive cost.

As a non-profit business, Firelands Electric Cooperative sets its pricing as close to "at cost" as possible, while maintaining a reasonable margin for unexpected contingencies. Your Co-op is not in business to make a profit, so there is no reason to charge more than is necessary to operate. Margins (profits) remaining at the end of each year are allocated to the members' capital credits accounts, and then refunded on a delayed basis.

Click here to access Firelands' complete rate schedules.