We Are All Feeling The Pressure

All News

We Are All Feeling The Pressure


Utilities everywhere are feeling pressure when it comes to supply chain slowdowns and the skyrocketing costs of not only materials but the cost of doing business daily. 

FreeState is diligent when it comes to operating costs. We analyze data, forecasts, and trends to prudently manage your cooperative and provide you with safe, reliable, and affordable electricity. It’s our commitment to each member. It’s our mission. 

But the mission has become more complicated as the economic climate shifts. We see record highs in inflation, costs, and unprecedented lead times on basic materials like transformers, meters, and wire. The recent devastation in Florida will also slow down materials and supplies. 

The current situation is not unique to FreeState. The situation we are in has put pressure on everyone. I hear from other cooperatives across the state and country that these issues are becoming a common topic in the board rooms, management meetings, and on the member side. It’s concerning and something your cooperative is taking seriously and doing what we can to manage. 

Members are seeing prices soar on everything from a gallon of milk to a set of tires. And prices are not going down. 

FreeState plans each year with a budget and plans years in advance with a construction work plan. This work plan outlines priority projects, materials needed, and the costs we will need to manage to maintain and build a reliable system. We plan for all sorts of contingencies with these plans, but to be as transparent as possible, we could not have planned for the situation we are in right now. 

We have very little control over material availability and costs, and we have no control over the natural gas markets and how that is impacting power generation and the cost of wholesale power. 

Over three-quarters of the cooperative’s expenses are not controlled by the co-op but dictated by outside factors. For example, the cooperative pays 66 cents per dollar to wholesale providers for the energy our members need. 

Wholesale power cost has fluctuated the most as natural gas prices significantly increase. Out of that same dollar, 14 cents cover the cost of operations, supplies, and materials. So far, that’s 80 cents of every dollar we have no control over, and it doesn’t seem to be changing any time soon. 

That’s why we’re doing what we can to manage what we can control. Over the next few months, we’re going to outline the current situation we see ourselves in and how we’re going to move forward. Because that is what we must do. We have come to a point where we need to adjust and provide you with service that is not only reliable but fair and equitable for all members. 

This month we are providing our members with information on how price fluctuations have impacted your cooperative. It is an effort to be transparent, open, and honest about the current state of the cooperative and how we’re working behind the scenes to meet these challenges with the most negligible impact on members. 

We know that members may have concerns because we all do. But we also want you to know that we’re here to talk through those with you and are willing to listen. It’s just part of what we do. We pride ourselves on member service and transparent communication. We will continue to provide you with information as we navigate these new challenges. Because at the end of the day, you are not just an account number. You’re an owner in your cooperative, and people drive us, not profits. 


As always, if you have questions about this content, we encourage you to contact us at 1-800-794-1989 or email customerservice@freestate.coop