Inflation affecting buying power, but electric rates staying the same
General Manager Stephanie Horst
Inflation seems to be the topic of all conversation, and rightfully so. According to the US Bureau of Labor Statistics, they calculate that $100 in September 2021 has the same buying power as $108.20 in September 2022. That means our dollar isn’t going as far as is it did last year. It is evident in everything that we are purchasing. Food in all categories is up 11.2% and energy 19.8%.
With all these price increases, did you know that B-Y Electric has not increased rates? In fact, not only are we keeping rates the same, but back in April, your Board of Directors approved a $267,000 bill credit to be applied to our member’s electric bills. This bill credit was passed on to our members from a credit we received from East River Electric and Basin Electric on our power bill. In October, the Board of Directors also approved a $170,300 Capital Credit retirement in addition to another $281,200 getting passed through from East River and Basin. This will be a credit on our members’ December 1st electric bill. That means $718,500 stayed in our members’ wallets in 2022.
So, what does 2023 look like? We are currently working on our 2023 budget, and it indicates no rate increase will be needed. We are however working on a new four-year work plan and long-range plan. These plans will be accounting for all the material increases we are seeing and as we borrow money at a higher interest rate, it could impact future rates. But that is why we do these plans, so that we can anticipate when a rate increase would be necessary.
Over 60% of our expenses is due to power costs. Both Basin Electric and East River Electric are projecting rates to remain stable.
Stable electric rates are not the only responsibility we bear, but so is reliability. We continue to invest in our distribution system with regular maintenance and replacement of our aging lines. East River has also committed to reliability to B-Y Electric members with a new substation in the lake area. The Lewis and Clark substation addresses the load growth and future load growth in the area while adding support to the Gavins substation. Construction will begin sometime this year and projected completion Spring/Summer of 2023.
With the holidays approaching, so does the cold weather. If you have electric heat, you are going to weather out this winter season well. Like I mentioned before, our rates are the same, unless your usage increases, your electric bill isn’t going up. If you are doing new construction, you may want to consider an all-electric heating system. Our heat rate remains stable, it does not go up and down with commodity prices. We also offer rebates on heat-pumps and resistance heat. Contact Aaron in our office for more information at 605-463-2507.
For those members who qualify, state assistance is available for home heating costs. The South Dakota Department of Social Services’ website is a great resource including the current income guidelines and an online application: https://dss.sd.gov/economicassistance/energyassistance/lowincome.aspx