Making Thoughtful Decisions Takes Time

Victory Electric has been undergoing a comprehensive cost-of-service study (COSS) with an independent consulting firm. Power Systems Engineering (PSE) has thoroughly evaluated the cooperative’s financial information. They have determined that changes to Victory’s rate structure are necessary to ensure that energy costs are distributed fairly and that the cooperative is financially healthy and prepared for the future.

Using standard methods developed by regulatory authorities across the country, a COSS identifies the cost of serving different rate classes (e.g., residential users, farms, irrigators, businesses). It also reviews the costs of purchasing or generating electricity, maintaining power lines and substations, and serving each member class. The consultants look at who uses electricity, how much they use and when they use it. The COSS also determines the revenue needed to meet the cooperative’s current and future needs.

The COSS and recommendations have been presented to the Victory Electric Board of Trustees and management team. They will continue working with PSE to fine-tune the recommendations and make any necessary changes, then decide whether to move forward with a new rate structure. Rate design is both a science and an art, and the process takes time and requires careful analysis and discussion.

Unlike an investor-owned utility, which has an incentive to raise rates to increase profits for shareholders, Victory Electric is a not-for-profit cooperative and aims to operate as close to cost as possible. Any new rate design will help us stay financially healthy, prepare for future growth and industry challenges, and provide reliable service at fair rates. 

Victory Electric’s mission guides the management of our cooperative: “To provide safe, reliable service at a competitive rate, provide economic development opportunities and services for our members, and ensure the financial stability of the cooperative through the use of prudent business practices and the latest technology.” 

Trustees make decisions based on that mission in accordance with their fiduciary duty to protect the assets of the cooperative. They review the co-op’s financials at each monthly board meeting as well as an annual financial audit and other reports. Trustees also fulfill a regulatory role for setting reasonable, equitable rates and establishing fair policies, rules and regulations. 

Because of the trustees’ careful financial oversight and advocacy for the member-owners they serve, Victory Electric members have not had an energy rate increase for nearly 10 years. According to the U.S. Energy Information Administration’s data for 2024, Victory Electric’s residential rates are lower than the state and national average and among the lowest in Kansas compared with other rural electric cooperatives and investor-owned utilities.

Other positive trends to note:

• Victory Electric has retired more than $9 million in capital credits to our members since 2019.
• Since October 2022, we have been able to pass through an Energy Cost Adjustment (ECA) as a credit on members’ bills.
• Economic growth continues in our service area, which helps us spread fixed costs over more kilowatt-hours sold. 

Because Victory Electric is a cooperative, our members are also owners of the cooperative. Your trust matters, and we will continue working to earn it by transparently keeping you informed. Our board is committed to taking the time needed to thoughtfully design fair rates and make decisions that help the cooperative remain strong and reliable.