By now, every Arrowhead Electric Cooperative member should have received his or her full-sized, full-color, 16-page 2010 AECI Annual Report. It is designed to convince you that the AECI board and administrative staff are fully engaged in the battle against rising electric costs. Over 4,000 copies plus postage…ouch!
Throughout the pages, colorful charts and graphs abound. I found one such graph in the General Manager’s Annual Report particularly misleading. It shows that since 2003 power costs to AECI have increased 70% while the costs charged to AECI members have only risen 50%. What it doesn’t show of course is that this deficit has gradually been added back to members through a 117.5% increase in the monthly service charge.
The margins on power sold that once helped cover operating costs are now being recovered in the monthly service fee. The benefits of this practice go to those whose meters spin the fastest.
A multicolored pie chart attempts to show that 54% of AECI’s operating expense is the cost of the electric power it purchases. I’m not sure that the cost of power purchased by AECI could actually be considered an operating expense, as power is a commodity that is sold to customers at a premium to generate revenue.
In recalculating the amounts that would actually reflect revenue spent on AECI’s operating budget for 2010, 22% was for interest payments on long-term debt… which now totals nearly 16 million dollars.
That’s a $1.43 million increase from 2009 to 2010 according to their balance sheet, with another nearly 5 million dollars in federal loans to be added soon for its fiber optic dreams.
A full 17% was spent on administration/general costs in 2010. Surprisingly only 28% went for operations/maintenance.
Don’t forget to clip the enclosed rebate coupon…AECI will pay you $10 to attend the “come one, come all” free pancake breakfast and annual meeting on June 11th…you can also register for door prizes!
The cost of this generosity will be added to your electric bill… whether or not you attend.
Bob LaMettry
Grand Marais, MN
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