No rate changes in 2018 budget
Dec. 19, 2017
Grand Rapids, MN – In addition to retiring $3 million in Capital Credits to co-op members this month, the Lake Country Power Board of Directors approved a 2018 budget with no change in rates for the coming year.
Stable rates are projected despite minimal growth expected in kilowatt-hour sales and new service installations. LCP General Manager Greg Randa said LCP remains committed to controlling costs and operating on steady financial ground.
“We’re keeping a close eye on costs while making important reliability investments,” Randa said. “Members will share the benefit of that mindset with rates expected to remain flat for the year.”
“Our cost-based rate structure insulates us from weather fluctuations. Given the warm winters of the past few years, we’d be stuck – along with members – if we had to rely on recovering most of our costs through a higher kilowatt-hour charge.”
Randa said wholesale power costs are also expected to remain flat in the New Year. Unforeseen wholesale power cost increases or significant major storms could disrupt the co-op’s plans, but the 2018 budget accounts for typical operational and weather disruptions.
LCP is projecting operating revenues of $91.6 million for 2018, up slightly from projected revenues of $89.4 million this year. Revenue projections reflect energy usage of nearly 650 million kilowatt-hours in 2018, compared to expected sales of nearly 630 million kilowatt-hours this year.
The co-op projects a year-end operating margin of $1.45 million in 2018, down slightly from a projected $2 million margin in 2017. LCP is planning to invest more than $16 million in capital projects to add a substation and replace old poles, lines, and equipment next year.
Randa said the LCP board adopted a long-term rate philosophy five years ago that is focused on providing members with stability and reliability. He said the employees of Lake Country Power are also working hard to maintain stable, steady and reliable service for co-op members.
Lake Country Power, www.lakecountrypower.coop, is a Touchstone Energy® cooperative serving parts of eight counties in northeastern Minnesota. The rural electric cooperative provides services to nearly 43,000 members and has offices located in Grand Rapids, Kettle River and Mountain Iron.