News > CEO’s Message – March 2025

CEO’s Message – March 2025

How Stearns Electric Compares to Other Electric Cooperatives 

Stearns Electric Association is one of hundreds of rural electric distribution cooperatives in the United States. It is our mission to continue to safely deliver reliable, affordable power and work for the benefit of our member-consumers every day. To help ensure we are doing this, we use industry metrics to compare ourselves to other cooperatives across the country. The National Rural Utilities Cooperative Finance Corporation (CFC) annually publishes Key Ratio Trend Analysis (KRTA) results which track the median value of 145 financial and operational ratios for participating electric distribution cooperatives. 

Here are three different KRTAs to show you how we compare. 

1. ANNUAL GROWTH IN NUMBER OF CONSUMERS (%)
Tracking annual growth helps us determine our budget. As you can see, growth has been around 1%, which poses challenges. This is because the investment needed in our plant to maintain reliability has been growing 4-5% annually. Unfortunately, energy sales, reflecting consumer growth, have not kept pace with these costs. The increase in plant expenses is largely due to high inflation experienced mid-2021 to mid-2023, which continues to drive up costs throughout the industry. 

2. AVERAGE CONSUMERS PER MILE OF LINE
The average cost to serve rural cooperative members is considerably higher than it is to serve individuals via municipals and investor-owned utilities. Electric utilities that are NOT cooperatives average 32.40 consumers per mile of line. Stearns Electric is slightly above the cooperative average at 6.69 consumers per mile of line. 

Since we have very few consumers per mile of line, our Fixed Charge – designed to recover the basic costs associated with delivering electricity, independent of how much energy is used – helps us maintain electric affordability for all Co-op members. The Fixed Charge accounts for Stearns Electric’s investment in poles, wires and transformers, as well as labor, to ensure electricity is available to members when they need or want it, no matter how often it’s used. 

3. SYSTEM AVERAGE INTERRUPTION DURATION INDEX (SAIDI)
This ratio shows the average number of minutes cooperative members are without power, which includes outages due to major storm events and pre-arranged maintenance. Electric cooperatives in Minnesota generally experience less interruption than other parts of the country. At Stearns Electric, we attribute this to our extensive testing of distribution equipment, our maintenance and inspection schedules, and our aggressive tree-clearing program, among other things. 

No two cooperatives are 100% alike, but we can use data like the KRTAs to track key ratios and see how we compare to others in our industry. 

If you have any questions on this data, please feel free to contact me at the Cooperative during regular business hours. As always, thanks for letting us serve you. 

Sincerely,

Matt O’Shea
Chief Executive Officer