Stearns Electric Conducts Cost-of-Service Study; FAQ Document Available
March 17, 2023
A consulting firm representative reviewed the process for completing a Cost-of-Service study for Stearns Electric during the Board of Directors meeting in late January.
The ongoing study will provide Stearns Electric with a comprehensive review of costs and revenue needs for the next five years that will consider a variety of economic and operational factors, said Shaurice Moorman, senior consultant at Power System Engineering. The firm will present its findings to the Board at its monthly meeting on March 30.
Stearns Electric hired Power System Engineering to review its cost and revenue needs as rising inflation and increases to wholesale prices for electricity continue to strain the Cooperative’s finances. Initial projections show that Stearns Electric will need an increase in revenue to continue supporting current operations and investments in its distribution system.
As part of the study, Power System Engineering will review all classes of energy users and identify ways to protect the fiscal health of the Cooperative, while maintaining safe and reliable service, Moorman explained. Further, the study will help the Cooperative determine how best to adapt to recent inflation, supply chain delays and higher prices for wholesale power.
“We’re feeling many of the same financial pressures as the businesses and families we serve,” CEO Matt O’Shea said. “This study is about doing our due diligence to find ways to manage these increased costs responsibly while minimizing the impact to our members.”
The study will also present rate adjustment options to improve equity between and within rate classes to ensure members are receiving the best value for their energy use. During the board meeting, Directors and staff asked several questions about the firm’s approach to be sure they have the information they will need.
“This study will help the Cooperative continue to be fiscally responsible while upholding our long-term investments in our distribution system,” said Board President Eric Peterson.
Power System Engineering is a full-service energy consulting firm with extensive experience advising utilities, municipalities and cooperatives on resource management, renewable energy development, and generation and transmission engineering. After the firm presents its findings and recommendations in March, board members will convene in April to discuss the findings and how to move forward with a rate adjustment plan.
Please review the Frequently Asked Questions Guide for more information.
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