CEO’s Message — March 2021
When your board of directors and I announced plans to build a new operations center, we made three promises: The building would be finished on time, on budget, and would not drive a rate increase. It turned out to be a greater challenge than we expected, but we kept our promises.
COVID-19 struck in the middle of construction. Progress could have come to a screeching halt, but we had selected a dedicated and trustworthy general contractor who implemented COVID-19 safety protocols and guided the project through to completion. Cooperative Building Solutions kept its promise to finish the building, which enabled Wells Rural Electric Co. (WREC) to keep its promises to you.
Our financial plan proved to be solid. Due to funds that had been diligently saved, savings from debt restructuring and budget reductions, and new financing at affordable rates, we were able to hold rates at 2017 levels. Despite an increase in wholesale power costs from the Bonneville Power Administration (BPA) in October 2019, WREC was able to keep its promise not to raise rates to pay for the new building.
That was no small feat. Wholesale power supply costs make up 72% of WREC’s total costs. Even a small increase in wholesale power supply rates has a dramatic impact on costs.
Because wholesale power supply makes up such a significant part of our costs, we devote a great deal of time working with other not-forprofit electric utilities and industry organizations to control those costs. We are grateful officials at BPA have listened to our concerns and worked to limit the 2019 increase.
We will not know until this summer what BPA’s rates will be, but we feel obligated to let you know we expect an increase. Given the enormous influence of wholesale power supply rates on costs, it seems unlikely WREC will be able to avoid a rate increase. If necessary, new rates will go into effect in October 2021.
We will provide additional information as it becomes available, including estimates for how increases in BPA’s rates will affect the rates you pay. As always, we are working to minimize the impact of any rate increase and ensure any increase is as fair as possible.
Clay R. Fitch
Chief Executive Officer