I remember my first week on the job at a small utility in Vermont 30 years ago. My boss, Steve Allenby, was explaining how rates were designed when our CEO, Tom Webb, walked in to introduce himself. He studied the notes on the board and said, “We want to keep bills at or below the rate of inflation.” I readily admit that the concept of making rates was a mystery to me that day.

Tom’s comment has stuck with me over the years — through recessions, economic downturns, inflation, wars, and even a pandemic. At times, it has been difficult to balance what is happening in the world and its effect on costs with the desire to keep rates in check. As a not-for-profit electric cooperative, we are not focused on making money for shareholders, but rather on supporting our members and keeping the utility financially strong.

The first pillar of Our Cooperative Roadmap is to empower and engage with members and communities, and we are doing just that in the development of a multi-year rate strategy. Earlier this year, we sent a survey asking members for their input on how our cooperative should balance financial needs with impacts on bills. More than 3,000 members responded, with approximately 1,000 members indicating an interest in continuing the conversation with co-op
leadership. We held three separate meetings with residential members and met with dozens of you during the annual meeting. We are also hosting a workshop for commercial members in May. We are taking that input into consideration as we develop the final strategy to present to your Board of Directors this summer.

As important as it is to have a rate strategy, it is equally important to understand what United Power is doing to control costs and help members do the same. We cannot perfectly control the negative impacts of global events, such as supply chain disruptions or the cost of fuel and critical equipment, but our staff works to smooth price impacts with an approach to procurement that secures cost and delivery, often years in advance.

These are a few of the areas where we are seeking to contain and manage costs:

• Growth pays: Developers, whether they are building data centers, new residential developments, or commercial buildings, pay 100% of the up-front costs so it does not impact other members.
• New ERA Grant: United Power was fortunate to receive a grant from the U.S. Department of Agriculture Rural Utilities Service that directly lowers power supply costs over the next 10-15 years, helping us to smooth rate increases. Four of the seven projects approved as part of our grant application are already serving your energy needs. The grant pays down 25% of the cost of these resources as well as three others that will come online by the end of 2029. We are one of only 15 cooperatives across the U.S. to get this critical support and we are the first in the nation to receive the initial grant disbursement.
• Power Market: United Power — along with 40 other cooperatives, municipal utilities, and the Western Area Power Administration — joined the Southwest Power Pool on April 1. Having a power market in the West allows for the economic use of generation and transmission and means the lowest cost energy gets used first. Due to United Power’s recent investment in the Mountain Peak Power gas plant, as well as our 119 MW of battery storage, when we have power that the cooperative is not using, we are able to sell it to others at a price higher than our costs.
• Efficiency Programs: United Power offers a number of ways for our members to make the most efficient use of the power we provide. From home audits to United EV, our team of Energy Solutions professionals is standing by to help you manage your energy use.
• Distribution System Operator evolution: We incentivize members to engage in energy efficient habits, such as shifting usage to off-peak hours. This creates the opportunity to purchase energy when it is less expensive. Our system becomes an effective tool in controlling costs through the dispatch of member-owned energy assets connected to the distribution system.

Our partnership with members is critical as we continue to meet the needs of our growing communities. We know rate increases, especially when they are unpredictable, make it difficult to plan your budget. Consistent, small increases, more aligned with inflationary pressures are easier to plan for and manage. We are committed to seeking ways to keep our costs in check and to help you with your energy needs.

As always, please feel free to reach out to me with any questions or comments.