Message for You...

For the last few months, I have been talking in broad terms about the need for Lumbee River EMC to adjust our electric rates in 2020.  Our electric rates are designed to cover our cost of power and our operating costs.  After much discussion, I can confirm that we will implement a 6.5% temporary rate adjustment on kWh purchases effective with the February 2020 billing cycle.

For those who were members in 2014, you may recall that a Wholesale Power Cost Adjustment (WPCA) was made as the cooperative completed a rate analysis.  When a cost adjustment is needed, a temporary adjustment allows the cooperative and its rate analyst time to evaluate and determine the correct amount of permanent rate increase needed.  This also ensures we are able to have the revenues required to maintain the cooperative’s financial health during this interim.  Everyone knows our cooperative is a not-for-profit member owned organization.  Our goal is to always set our rates so that the right balance of margins is maintained —not too high and not too low.  If our rates are too high, then we may collect more money than necessary from our members.   Too low and we could jeopardize our financial strength.

While eventually all margins are returned to the members, Lumbee River EMC does not want our members to pay any more for their electricity and services than needed.    Everything we spend, as well as everything we collect, determine our margins and ultimately impact our financial strength.  As I previously shared, Lumbee River EMC is required by our lending institutions and the USDA’s Rural Utility Services (RUS) to maintain certain financial ratios.  These financial ratios are the performance indicators used by those institutions to measure our financial strength.   Because Lumbee River EMC is financially sound, we have been able to operate since 2014 without a rate increase and still return capital credits to our members each year.

The latest updated financial information has been provided to our rate analyst to determine the actual permanent rate increase needed.  It is anticipated that the increase needed should be known around the end of the 1st quarter 2020 (March/April). I maintain my promise that Lumbee River EMC will do our best to always to make decisions with the impact to our members in mind.  You can be confident that we strive to improve the quality of life for our members and our communities while keeping electric rates as low as possible.

Message from Your CEO - February 2020 SHunt_sign.png Carmen E. Dietrich, President & CEO