Delta-Montrose Electric Association (DMEA) is facing an over $2 million increase in the wholesale cost of electricity from its power provider, Tri-State Generation and Transmission.
DMEA general manager Dan McClendon expressed strong concerns.
In 2008, Tri-State imposed a 4.1% price increase. At that time, the DMEA board elected not to raise rates. The cost was, instead, absorbed by the co-op through conservative budgeting, hiring freezes, cuts in operating expenses, deferral of capital investments, and by drawing down the co-op's equity. For the following three years, DMEA continued to absorb the losses which amounted to approximately $5.4 million.
In 2012, Tri-State announced that it would raise rates by another 5%. The DMEA board of directors decided to pass along a rate increase to the membership.
Because Tri-State has raised rates by another 4.9% in 2013, the DMEA board and staff will have to look at more extensive measures to absorb as much of the hike as possible. "Our hope is that we will be able to avoid a rate increase by making a series of changes and cuts within the operation," McClendon said Tuesday.
The Finance/Budget/Audit Committee was expected to preview those changes at a meeting Tuesday night. During budget preparations, McClendon said the committee meetings are attended by most board members.blog comments powered by Disqus