Delivering reliable power across a large rural service territory takes more than maintaining poles and power lines. It also requires planning to ensure Big Country Electric Cooperative can continue to meet the needs of the members we serve.
As part of that ongoing planning process, Big Country EC recently completed a cost-of-service study to evaluate the cooperative’s current rates and system needs.
Cost-of-service studies are an important tool used by electric utilities across the country. They help determine whether existing rates support the actual cost of providing electric service to different member rate classes. At BCEC, this includes residential, irrigation, farm, seasonal, small commercial and large commercial services. Because every member class uses electricity differently, the study helps ensure costs are distributed as fairly and equitably as possible across the cooperative.
BCEC worked with the Cooperative Finance Corp. to complete the study, which reviewed the cooperative’s financial position, operating costs, usage trends and long-term system needs. These studies are conducted every five years as part of BCEC’s ongoing financial and operational planning to help the co-op prepare for future needs and challenges.
Providing reliable power across thousands of miles of rural electric line requires strategic investment. As costs, technology and system needs evolve over time, studies like this help cooperatives plan ahead and evaluate whether current rates still reflect the cost of service.
Results
The results of the study indicate that BCEC will likely need to move toward a rate update to continue supporting the cooperative’s long-term reliability and financial stability. This confirms trends our leadership team has recognized, indicating that current rates no longer fully align with the rising cost of operating and maintaining the system.
Like many industries, electric utilities are experiencing rising costs across nearly every area of operation. Utility poles, transformers, wire, meters, vehicles, fuel, construction materials and other equipment required to operate the system cost significantly more today than they did several years ago. Ongoing maintenance, technology, vegetation management and system reliability improvements also continue to increase in cost.
As a not-for-profit, member-owned cooperative, BCEC does not set rates to generate profits for outside shareholders. Rates are designed to cover our actual cost of providing electric service while allowing the cooperative to operate safely and reliably. Because BCEC is governed by a local board composed of co-op members, those involved in these decisions understand firsthand the importance of balancing reliability, affordability and responsible financial planning.
We know conversations about rates impact the people and communities we serve every day. Many families, farms, ranches and businesses across our service territory are facing rising costs in their own day-to-day operations, and we understand that no one welcomes higher bills. That’s why our board of directors and leadership team take these discussions seriously and work carefully to manage the costs we can control before asking members to fund additional costs.
BCEC is continuing to review the study results and develop implementation plans. Similar to the cooperative’s previous rate update, in 2019, the board and management are focusing on ways to help minimize the impact on members, including phased implementation over time.
Additional details, member information meetings and formal communication regarding the rate update will be shared with members through upcoming Membergrams, which are distributed with monthly billing statements and online, as well as in Texas Co-op Power. BCEC remains committed to keeping members informed throughout the process and providing clear, transparent communication as details are finalized.
Reliable electricity is something we all depend on every day, often without thinking twice about it. It powers much of what we do in our homes, workplaces and daily routines, and while the cost of maintaining and operating the electric system continues to rise, electricity itself still remains one of the best everyday values.
Behind the scenes, providing reliable power across a large rural service territory requires careful planning. Even so, our mission remains the same: to keep service reliable and affordable while maintaining the financial strength needed to serve you, our members, for the long term.
