Good afternoon to the fine folks of North Itasca!

by Brad Dolinski, CEO

Looks like it’s going to be a nice MEA weekend.  I’m planning to take my oldest daughter hunting for the special youth hunt here in Minnesota.  The warm temperatures won’t be great for hanging a deer, but it will make playing crazy eights in the stand quite comfortable. 

After spending a couple of years together hunting, I’ve learned quite well… It’s not about the hunting.  I find it quite difficult to see deer when I have two daughters with the giggles.  They’re happy and enjoying the hunt, I’m proud to have them out in the field, it’s going to be a great weekend.

It’s time to start talking about rates.  We are about 80 percent done with our budget we will be releasing to the board next week.  Again, the board is responsible for setting the rates based off the numbers I provide them.  My staff and I work very hard to ensure the board have accurate numbers to work from.  I will be suggesting a rate increase to our directors this year.  I don’t want to quote a number incorrectly then reel it back in.  I can tell you what I know as of today.  I’m not trying to scare anyone; I was quite pleased where we are landing with the pressures we continue to face.

I will start with off-peak rates.  The heating rates are going up from Great River Energy and I will suggest passing these costs directly into the program without any other changes.  The storage rates or long-term control rates increased .0031 cents per kWh, this would change that program from $.055 to $.0581/kWh.  The dual fuel program or short-term control will go up $.0043 cents per kWh, currently the rate is $.0635 and will be $.0678/kWh.  This will shift the off-peak rates just over five percent. 

Next are the general service rates.  It doesn’t matter if you have a small cabin, business or large home on North Itasca’s system, we all own this machine together.  We are all responsible for the maintenance and construction of our lines on the system we own together.  The difficult conversation when we discuss rates is ensuring that the rates are fair across all Member-Owners. 

There are costs that are directly related to kWh sales.  Other costs like construction and maintenance are shared by all, these costs are reflected in the general service fee.  How do we distinguish what the kWh charges should be and what the base fee should be? 

We have our budget broken out to show these costs.  We split each section down to reflect if the cost is shared by all or if it is an individual expense. 

Think of the power bill we get from GRE for a moment.  This would be an individual expense, you could use less kWh, turn lights, or loads off.  You can switch from electric heat to another source.  Based on the amount of electricity you use; your bill will go up or down. 

Now for another example, our operation and maintenance accounts.  We all share in these costs equally; they are reflected in our service fee.  We must have the lines in good operating condition for you to have the ability to use power.  As a Member-Owner of your cooperative we share these costs, and they are not individual. 

We worked with Great River Energy as they were developing their budget for 2023.  GRE is seeing pricing pressures driven by the rising cost of natural gas.  These increases are directly related to the cost of electricity, natural gas is one of the fuels burned to produce our power.  When the dust settled at GRE, I found the cost of electricity went up at North Itasca Electric almost exactly 6 percent.  This increase along with the other pressures I talked about last month will force me to suggest a rate increase to our board of directors.

 Working with my staff and the directors, we have enjoyed flat rates since 2018.  After five years and almost a different world entirely I am out of wild cards to play.  I have a duty to protect your financial investment in your cooperative, please understand I never take these decisions lightly.

By your side!

Miigwech,

Brad