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Farmers' Electric Cooperative announced today a general rate increase will go into effect for its member-owners this spring. Effective with the May 1 billing, FEC member-owners will raise its rates an average of 8.5 percent. Commercial and industrial rates will also change and vary based on usage and current rate classifications.

This rate change continues what we told our member-owners, beginning at the 2004 Annual Meeting and in articles in the Rural Missouri Magazine since that meeting,” said FEC CEO Mike Sanders. “We are beginning a time in which we are probably going to be adjusting our rate on a more regular basis. Our current projections are that we will have to make rate adjustments every two years. We will make every effort to make the adjustments as minimal as possible.”

The rate change marks only the second rate increase for FEC member-owners since 1991. During that 16-year time span, FEC also decreased its rates in 1995. “We did absorb a rate increase that we received in April of last year from Associated Electric Cooperative, our power supplier, but we were forced to take action when we received word from our power supplier that another rate increase in our power bill was going to occur this April,” Sanders explained.

FEC again worked with Toth & Associates, Springfield, a company that specializes in rate studies, before taking a proposal to the cooperative’s board of directors at its December 21 meeting.
“One reason for the rate increase from our power supplier was due to new EPA regulations that will be costing hundreds of millions of dollars to install and operate now and well into the future,” Sanders said, adding increased costs for coal, transportation and natural gas were also factors in the price increase to the cooperative from its power supplier. “You can also add reduced hydropower availability, as a result of the current drought conditions.”

Sanders pointed out the new environmental standards require compliance from all electric utilities. This includes the new power plant that is scheduled to begin construction in the near future just west of Norborne. Environmental expenses to the cooperative-owned power plants at Thomas Hill and New Madrid, as well as the new power plant, will easily top the $500 million mark. Since the early 1990’s and including this latest round of environmental expenditures AECI will have spent well over $1 billion to improve air quality in Missouri.

“We understand there is never a good time for a rate increase, but at the same time the electric cooperatives of this system also realize it is important for us to be a good environmental steward regarding the quality of the air in our country.” Sanders said. “We have made every effort to minimize the rate increase impact to our member-owners and we will continue to do so in the future.”

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