Even people who are not big college basketball fans know about the NCAA basketball tournament this month. It is the culmination of the season where teams that have worked hard to prepare and that have executed their plans will have a chance to shine on the national stage. For those unfamiliar with basketball strategy, some teams will employ a defensive tactic known as a full court press to apply pressure to the opposing team’s offense over the entirety of the court. There is no place where an offensive player will remain unguarded. To work on keeping rates affordable, Empire Electric Association employs the same strategy on costs.
As a member-owned electric cooperative that operates at cost, we recognize any money we spend is your money. The EEA board and staff have focused on finding opportunities to increase efficiency in our existing processes as well as looking for new opportunities in technology or with suppliers to keep rates affordable. One example of using innovative technology was our change of business software in 2021. By upgrading to National Information Solutions Cooperative and consolidating all our business systems into their available software, EEA has been able to achieve an annual average savings of more than $30,000.
EEA’s largest annual expense is for power we purchase from Tri-State Generation and Transmission Association. Tri-State announced last fall an increase on average of 7.5% beginning January 1. Tri-State’s rate increase is being driven by increased maintenance costs on aging thermal dispatchable generators, ownership costs related to new generation coming online to maintain reliability and meet regulatory requirements, and increases in wholesale power costs. Most of you have already seen this increase reflected in the Power Cost Adjustment on your February bill.
Until recently, there was limited potential for EEA to reduce our purchased power cost. Tri-State heard this concern from its member cooperatives and entered into negotiations last year to add flexibility to our wholesale power purchase agreement. The new provisions in our updated agreement allow EEA to purchase up to 60% of its annual power requirement from suppliers through Tri-State’s Member System Distributed Resource Policy and the Bring Your Own Resource program.
The new limit is a substantial increase over the previous 5% allowance that EEA had already used in our power purchase agreements with the Totten Lake, Montezuma, and Rocky Ford solar generators. We are currently in discussions with several power suppliers that are developing eligible projects in our region. These projects include solar and fossil fuel generation.
Working with our teammate Tri-State on keeping purchased power costs affordable while developing the generation capability in our region and the reliability that it affords is just one more way we are running a full court press on cost control. We appreciate your support as we work to power your future.
