A look at the factors driving costs

Pioneer Electric has proudly delivered reliable and affordable electricity to our members since 1938. We strive to maintain value for our members, ensuring the lights stay on while keeping costs as low as possible.

Because we are a cooperative, we operate with very slim margins, and all our revenue comes from the members. As co-owners of the cooperative, you share in the cost of operating the business and the return of unused funds as capital credits. 

Over the past four years, Pioneer Electric has faced a series of challenges that have affected our operational costs. Rising costs have affected us as much as any other company. Most of Pioneer Electric’s operational costs have significantly increased in recent years with no signs of moderating (transformers, crossarms, diesel and fleet replacements/repairs).

This increase in expenses was compounded by two events in 2023 that significantly impacted our budget. The extreme cold on Christmas Eve 2022 prompted an all-time peak load for us, which resulted in nearly $600,000 in additional (unbudgeted) power supply costs. The cold weather in January 2024 will similarly affect our budget. Secondly, severe storms in June caused widespread and significant damage to our system. The cost to repair that damage was nearly $1 million. Altogether, weather events last year cost us $1.6 million in unbudgeted expenses.

Without changes to Pioneer Electric’s 2024 rate schedule, our operating budget may experience a shortfall, and we face the possibility of not meeting the requirements of our loan agreements.

In light of these circumstances, we are considering a rate adjustment to ensure our cooperative’s financial health and long-term sustainability. We recognize the importance of maintaining a rate structure that accurately reflects the costs of delivering electricity. We are conducting a comprehensive “cost-of-service” study to evaluate our expenses and revenue for each rate class and propose what those rates should be. The findings from the study will guide the cooperative’s Board in making informed decisions about rate adjustments that best serve the interests of all our members.

The decision to explore a rate adjustment is not made lightly. We understand that any rate change can impact household budgets and are here to support you. If you face financial hardships or have concerns, please get in touch with our member service team.

As in the past, Pioneer Electric will continue to work with our members to help reduce the impacts of increased costs and find solutions to stabilize your power bills. Maintaining dependable service at the most affordable price remains our cornerstone. We’re always here for you.