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Media Statement from UDWI Board of Directors

UDWI Approves Rate Decrease

June 19, 2018

The Utilities District of Western Indiana REMC Board of Directors voted to approve the Cooperative’s first rate reduction in more than 25 years at the Monday evening meeting.

An average residential member who uses 1,100 kilowatts per month will see their electricity costs drop by approximately 4 percent when bills arrive in early August.  As part of the new rate structure, UDWI is eliminating the seasonal differential in the energy charges; members will now pay the same cost for energy for every month of the year. This change will help lower members’ bills during the highest usage periods of the summer and winter.

Part of the savings is also the result of a monthly $2 reduction in the facility charge portion of the member’s bill. This facility charge helps provide the basic infrastructure and systems required to provide electric service. This fixed reduction will be applied to all residential members’ bills and is not affected by how much, or how little, electricity they use.

UDWI will work to maintain these lower rates and the reduced facility charge for the next three years.

“This rate decrease is the direct result of the $1.5 million in operating cost reductions that the management team has achieved over the last six months.  Every dollar we have saved in expenses is flowing directly back to our members via this rate reduction,” said CEO Doug Childs.  “This rate reduction is the ‘proof in the pudding’ that the cooperative is now being ran like a business for the sole benefit of the members.”

UDWI is going against both state and national trends by lowering rates and reducing the facility charge.  In fact, other electric providers in the state are requesting significant rate increases citing rising energy costs and more money being needed for capital improvement projects.

This spring, a Cost of Service and Rate Study was conducted to ensure that charges were accurately reflecting the cost of providing electric service to members across each rate class. This study analyzed all costs associated with operating the cooperative; from power supply costs to line repair and replacement.

UDWI contracted John Wolfram, of Catalyst Consulting, to perform the rate study. Wolfram has more than 25 years of experience in electric and gas utility operations, regulatory affairs, planning, and rate setting.  Since founding Catalyst in 2012, he has supported utilities on a wide array of issues and has conducted Cost of Service and Rate Studies for utilities across the country, with a focus on supporting utilities in Indiana and Kentucky.  Wolfram used well established industry standard methodologies to analyze all of the cooperative’s costs—from purchasing power, to the cost of distributing that power to the members. He provided detailed data to the Board of Directors and UDWI management that confirmed a rate reduction is possible.

“This UDWI team is clearly focused on setting the utility on a right path.  They are dedicated to providing reliable service to the membership at the lowest possible cost,” said Wolfram.  “Most other utilities undertake rate reviews with the aim of increasing rates, so working with UDWI on this review has been a pleasure.”

This rate change shows that the cooperative is improving and making positive changes for the members.  The cooperative has many ongoing initiatives that will continue to strengthen the organization including long-term financial planning, new rate and financial policies, and on-going cost management efforts.  

Rate information will be posted on the UDWI website (also click below), and members are welcome to contact the office with any questions concerning these rate changes.

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