Electrifying the last mile costs more than lighting up within city limits.

Almost 75 years ago, congress passed a law to encourage the extension of electricity to the last mile.  In Minnesota, that last mile turned out to be 122,500 miles of distribution lines that stretch to the nook and cranny of every Minnesota County. Cooperatives like Arrowhead Electric count 6 members per mile, which garners about $15,230 in revenue for each mile of line. Compare that with Minnesota Power: 23.55 consumers and $82,221 in revenue per mile, and the average northern Minnesota municipal utility which averages 25-55 consumers per mile of line and garners up to $71,000 in revenue for that same mile of line.

What does this mean?  Put simply, the more consumers per mile, the easier it is to spread costs. The limited revenues in rural areas are the reason that other utilities made the choice to not extend lines to service territories like Arrowhead Electric Cooperative, Inc’s years ago.  But electric co-ops did.  And still do.

To improve service, secure more competitive power supply and achieve economics of scale, co-ops banded together in the ‘50s and ‘60s to form other cooperatives that would go on to build generation and transmission assets.  To build those assets, cooperatives like Arrowhead Electric Cooperative, Inc executed contracts that act as the security for the long-term loans that are needed to finance the projects.

Today, the contracts between local co-ops and their suppliers run in length from 2040 to 2058. That security, in the form of a long-term power supply contract, is a common requirement for all co-op generation and transmission suppliers.

Over the years, the cost of power declined only to ratchet up. Some of this increase is due to the increased cost of fuel, compliance with regulations and renewable energy requirements.  While the renewable projects that Great River Energy and other utilities build (mainly wind) has been popular, it has also been very pricey – more so than the power generated at the power plants.

While Congress continues to debate “capping” how much carbon dioxide can be produced, some members of the Minnesota legislature have considered legislation to impose a fee on carbon produced at generating plants which could mean double digit rate increases.

The Minnesota Rural Electric Association, which represents the legislative interests of the state’s 44 member-owned electric cooperatives, will oppose any legislation that seeks to increase your rates.

Often times our rural legislators despite their best efforts are unable to secure the interests of there rural constituents due to the challenges faced by legislators representing larger populations.  Thus, every voice helps when determining matters with such significant importance.  To have your voice heard, go to www.ourenergymn.coop or stop by our office and fill out a postage paid note to tell our legislators any future legislation must be fair, affordable and achievable.

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