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Electric


Electric Rate Increase Discussion from LREC’s Power Provider


Associated Electric Cooperative (AECI) located in 6SULQJ¿HOG 0LVVRXUL JHQHUDWHV DQG VXSSOLHV WKH HOHFWULFLW\ IRU /5(& DQG ¿IW\ RQH RWKHU FRRSHUDWLYHV LQ 2NODKRPD Missouri, and Iowa. All the electricity provided to our members is purchased from AECI.


In the second level of the system are the regional cooperatives that transmit power from AECI to the distribution cooperatives. These organizations are known as generation and transmission cooperatives (G&Ts), and they serve six geographical areas of Missouri, southern Iowa and northeast Oklahoma. KAMO Power in Vinita, Oklahoma is the G&T for Lake Region Electric Cooperative. A rate change in any part of the three-tier system (how our members receive electricity) can affect the end users rate. KAMO has announced plans to implement a 5.5% rate increase effective January 1, 2018. Much of the rate increase KAMO is considering has to do with the transmission costs embedded in the cooperatives power supply bill. KAMO has invested over a half billion dollars in new transmission and transmission improvements the previous 15 years. KAMO also utilizes other utility companies’ transmission systems to deliver our electricity – those costs have escalated substantially as well. Also, in 2017, KAMO incurred a 2% rate increase from our wholesale energy supplier, Associated Electric Cooperative (AECI), which was not passed on immediately. KAMO chose not to pass the rate increase to its members (LREC) in 2017 due to the uncertainty of the future grid costs. AECI has been providing transmission service to Noranda, an aluminum factory, which is not in operation any longer. The excess capacity of our power plants has been sold to other entities or utilities to generate additional revenue. This wholesale rate increase stems from the loss of Noranda transmission revenue ($9 million) and a decrease in non-member energy sales.


Thomas Hill Energy Center, AECI Power Plant


LREC management and board of trustees are planning and preparing for an expected increase in cost coming down the three-tier system from KAMO and AECI.


³:H¶UH DOZD\V YHU\ XQGHUVWDQGLQJ RI WKH ¿QDQFLDO LPSDFW RI D UDWH LQFUHDVH RQ our members, and we don’t have them unless we don’t have any other choice,” VDLG +DPLG 9DKGDWLSRXU &(2


Lake Region always strives to provide quality service at the most affordable rates possible. Please read your monthly member newsletter or visit our website for more details regarding any LREC electric rate announcements.


2 LREC Powerline Press


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