News > CEO’s Message – January 2026

CEO’s Message – January 2026

What Our Cost-of-Service Study Means for Members

Like the businesses and families we serve, Stearns Electric continues to face rising costs and inflationary pressures. In last month’s column, I outlined the Cooperative’s key cost drivers and highlighted cost-saving initiatives planned for 2026. This month, I’d like to share more about our ongoing Cost-of-Service study and why it matters to our members. 

WHAT IS A COST-OF-SERVICE STUDY?
A Cost-of-Service study is a detailed financial analysis that helps determine the revenue needed to provide reliable electric service and set fair, accurate rates for the different revenue classes (or consumer groups) we serve. Stearns Electric completes a Cost-of-Service study every three to five years to ensure rate equity and guide long-term operational and infrastructure investments. 

The results of each study help us manage rising costs responsibly, while minimizing impacts to our members. 

2026 COST-OF-SERVICE STUDY
Earlier this month, the Cooperative began a new Cost-of-Service study with Power Systems Engineering (PSE). The study will provide Stearns Electric’s Board and leadership team with a comprehensive review of the costs and revenue needs of the Co-op over the next five years, accounting for economic trends, operational requirements and changes in the energy industry. 

PSE will evaluate all revenue classes and identify ways to protect the fiscal health of the Cooperative while maintaining safe and reliable service. The study will also help the Co-op plan for higher wholesale power costs long-term. 

While the final results are not yet complete, initial projections indicate that additional revenue will be needed to support current operations and necessary investments in our distribution system. Upon completion of the study, PSE will present multiple rate options to ensure fairness across all rate classes and continued value for our members. 

POWER SYSTEMS ENGINEERING (PSE)
Stearns Electric has partnered with PSE for the past several Cost-of-Service studies. PSE is a trusted energy consulting firm with extensive experience working with utilities, municipalities and cooperatives on resource management, renewable energy development, and generation, transmission and distribution engineering. 

PSE will present the Cost-of-Service study results to the Cooperative’s Board of Directors and management team at the March Board meeting. 

LOOKING AHEAD
As always, Stearns Electric remains committed to responsible financial planning and keeping our members informed. Any decisions made regarding rates will be guided by our obligation to provide safe, reliable and competitive energy both today and into the future. 

Sincerely,

Matt O’Shea
Chief Executive Officer