Our mission is to enhance the quality of life of our members and the communities we serve by delivering safe, reliable electric power and energy services with exceptional value. Keeping our rates affordable is a key component to delivering on that promise. As a not-for-profit electric cooperative our rates are designed to cover the cost of doing business, not to generate profits.

The largest expense we incur as a business, which is recovered through our rate design, is the cost of purchasing the electricity we deliver to your homes, businesses, and communities. In a perfect world we would know exactly what those costs will be when we set our rates. However, there are many factors that cause fluctuations in electricity prices that impact wholesale power costs. These factors include, but are not limited to, price variations in the fuel used to generate electricity, unplanned maintenance at generation facilities, and compliance with regulatory and legislative requirements.

As mentioned in my September executive message, due to the regulatory and legislative requirements surrounding coal ash, additional compliance costs are included in our wholesale rates as of January 1, 2018. These new costs were not known when we last designed our rate schedules. Therefore, our wholesale power costs may exceed the amount reflected in our current rates.

You may notice, from time-to-time there is a line item on your bill for a Wholesale Power Cost Adjustment (WPCA). The WPCA is the mechanism in which Union Power either credits or charges you for times when wholesale power fluctuates from what is built into our current rate schedules.

For much of 2017 you may have noticed a WPCA credit on your bill due to wholesale power costs being lower than expected. It is anticipated you will begin to see a WPCA charge on your bill, most of which is driven by the increased wholesale power costs due to the new compliance requirements.

Union Power remains committed to delivering on our mission and will work hard on your behalf to look for ways to mitigate these cost increases.