Tim Thompson’s November 2024 CEO Column

As you know, the drive to develop and adopt renewable sources of energy has been a topic of conversation in our country over the last few years, both as a political talking point and in the general discourse. In 2023, our state legislature passed the MN Carbon-Free by 2040 Standard, mandating a 100% transition to carbon-free electricity over the next 15+ years.

In response, to ensure the stable, reliable transport of energy generated from wind and solar throughout the state, our wholesale provider Great River Energy (GRE) – in partnership with other MN utilities – is planning to make a significant investment in new transmission and increasing its labor force to complete the work required.

Although we are on the front end of this energy transition, we’re already beginning to see how it will affect Lake Region and our members. We recently learned in GRE’s 2025 budgeting process that, with this effort, the financial requirements associated with projects of this size necessitate a wholesale power cost increase in 2025 for all of GRE’s member cooperatives.

So, what does this mean for you? This increase, coupled with the additional impact inflation is having on people and businesses – as well as a lower margin for GRE than expected due to the mild weather this past year – will need to be passed along to our members in order to maintain the financial strength of LREC.

Raising the cost of energy is never something LREC’s Board of Directors and leadership team takes lightly. I want all of our members to know your board and cooperative employees are committed to keeping our costs as low as possible, while continuing to provide you with the reliable and affordable electricity you’ve come to expect.

In fact, Lake Region’s administrative and general costs are lower today than they were over a decade ago. While keeping costs down, we’ve managed to improve reliability by taking a proactive approach to how we identify and prevent potential outages. Looking ahead, we plan to continue upgrading and modernizing our system so it is ready to serve you well into the future as the demand for electricity continues to increase. And, we’ll continue to partner with GRE to remain a leader in renewable sources of energy, including large renewable projects and local options such as our GoWest solar arrays.

We understand the importance of transparent and timely communication, and are working to keep our members as informed as possible. While we don’t have exact numbers yet, the increase in GRE’s wholesale power cost will be passed on to our members as a power cost adjustment starting in 2025. As we move forward with GRE into this transition, LREC is focused on minimizing the financial impact on our members. Keep an eye out for additional updates on GRE’s increase and where to find these changes on your monthly statement.