The year 2022 was a challenging year.

 

Despite gains in 2021, COVID-19 refused to go away.  Inflation continued to surge (up 6.5%) while the stock market declined (down 8.78%).  Federal Reserve rates rose to 4.4% while gasoline prices also continued to climb (up 31.22%) fueled by global events and domestic policies.  Prices rose along with the summer temperatures and the rain refused to fall.

 

On the bright side, the Jayhawks rally from a 16-point deficit to defeat the 8th-seeded North Carolina Tar Heels, 72–69, in the National Championship Game.

 

 

The year 2022 was a challenging year, but someone once said, “Challenges are gifts, opportunities to learn.”

 

We evaluated every process, eliminated what didn’t work and streamlined what did.  We updated costs and fees, managed inventories, leveraged purchasing power, and we found efficiencies. Still, as costs rose across the board, we saw margins sink.  Despite a 6.43% overall rate adjustment which aligned our 2016 rate structure with 2021 costs we saw our rate of return shrink to 2.49%.

 

One of the many benefits of an electric cooperative is that the reason we exist, our focus, is on serving our members with reliable, affordable electric energy and related cooperative services.  Our focus remains on two things: Rates and Reliability.

 

Amid these challenging times, the Lane-Scott Electric Cooperative achieved the fifth lowest residential rate among Kansas cooperatives and about 15.4% below the local municipal rates.  Your Cooperative also achieved the second lowest non-primary metered Industrial rate in Kansas[AJ1] : all while keeping your energy dollars local and remaining financially strong. 

 

The story goes that one utility manager told his city council, “I’ve got good news and bad news.  The good news is that we only need to increase electric rates by 5% this year.  The bad news is that the power will only be working half of the time.”  Cheap power doesn’t mean much if the lights aren’t on.

 

Lane-Scott tracks several utility industry standard reliability metrics.  Our average service availability index for 2022 was 99.96% while the average number of interruptions per meter decreased to 1.33 per year.  Last year 55.4% of our system outages resulted from major storms and power supplier disruptions.

 

The bottom-line is that your cooperative stayed focused on our core business of providing reliable, cost-effective power and finished 2022 with over $60 million in utility plant with a total of $34.8 million in long-term debt.  The Cooperative had $20.9 million in energy sales and an operating margin of $563,308.

 

Cooperative services including Generac generator sales and servicing, HVAC and electrician services, electrical parts and equipment sales, and appliance repairs had its’ best year in a decade adding over $140 thousand to the bottom line.

 

The Merriam Webster dictionary defines the word cooperative as:

• Mutual assistance in working toward a common goal.
• A farm, business, or other organization which is owned and run jointly by its members, who share the profits or benefits.

 

Cooperatives are non-profit.  That’s the way we were founded and that’s the way we continue to operate.  If we make more than we need, we pay it back to you, our owners.  I am very happy to report that last year the Cooperative returned $500,000 of equity to members in our largest capital credit retirement in many years.

 

We never know what the future holds but we know that as a cooperative we are stronger together.  Every day we work toward our common goal of keeping the lights on and your costs reasonable.  We continue in our commitment to our communities and to keeping local dollars local while we investigate new technologies and efficiencies in workflow management, electric vehicle charging, solar and wind energy support, and demand side management options.

 

The year 2022 was a difficult, frustrating, and rewarding year.  We took a few hits, like everyone else, but as a team we maintained low rates and high reliability.  We expanded services and we supported our communities.  We are 25 employees strong, one cooperative in two convenient locations, and I am honored to be a part of the Lane-Scott Electric Cooperative family and to work alongside these great and dedicated individuals, serving you, every day.

 

Richard McLeon, MBA

General Manager / CEO