Lake Region Electric Cooperative
At a time when prices are rising on many products and services, Lake Region Electric Cooperative’s wholesale power provider Great River Energy is holding its wholesale electricity rates relatively flat into 2022 and projecting rate stability into the future.
“We spent over a decade transitioning to a portfolio of power supply and transmission resources to efficiently serve our member-owner cooperatives,” said Great River Energy President and Chief Executive Officer David Saggau. “The benefits of those decisions are now being felt. Wholesale rate stability is incredibly important to our member systems in greater Minnesota that are seeing sharp increases in other costs.”
Stable wholesale rate projections are due in large part to changes in the way Great River Energy produces and purchases energy. The cooperative plans to eliminate coal from its owned power supply resources, more than double its renewables and purchase a greater portion of energy from the Midwest energy market.
These changes put Great River Energy on-track to reduce its carbon dioxide emissions by more than 80% by 2023, surpassing Minnesota’s statewide emissions goal more than 25 years ahead of schedule.
“We are coming off a decade of prudent investments as well as some difficult decisions that have us firmly on a path of stable rates,” said Great River Energy Vice President and Chief Financial Officer Michelle Strobel. "This is critical for our member-owners, as wholesale power costs can represent a significant percentage of their overall expenses."
Stability in the face of inflation
The U.S. Labor Department has reported that expenses such as food and rent are increasing due in part to housing shortages and supply chain troubles. Consumer Price Index increases are also exceeding economists’ forecasts.
“These economic challenges underscore the value of cooperatives,” said Great River Energy Vice President and Chief Corporate and Member Services Officer Mark Fagan. “Cooperatives are not-for-profit, member-owned businesses that can adapt to changing member needs or unexpected economic trends.”
Great River Energy’s budgets, rates and major business decisions are voted on by a board of democratically elected directors, all of whom are cooperative members and ratepayers.
“Our member-owners are clear about what they want from Great River Energy: affordable rates, reliable service and environmental stewardship,” Fagan added.
Effect on regional economy
The benefits of price stability extend beyond cooperative members and can have a stabilizing effect on the larger economy, according to Brian Hanson, who serves as president and chief executive officer of APEX, a northern Minnesota economic development nonprofit organization.
“Businesses are seeking ways to manage rising expenses right now,” Hanson said. “Price stability for a major expense such as electricity is one less barrier to innovation and growth. That’s what creates jobs and fuels healthy economies.”