Making Sense of Energy Costs // October 2025 CEO Column
All it takes is a trip to the grocery store to see that costs are continuing their steady rise upward. Here at Lake Region, we recognize that inflation is a challenge for our members; we want to do our part to make sure we are providing you with the reliable energy you require at an affordable rate.
Although inflation has led to increasing costs in many areas of our lives, it’s important to note how the cost of powering your home rises slowly when compared to other common goods. If you examine average price increases over the last five years, electricity remains a good value. According to the U.S. Bureau of Labor Statistics, the average annual price increase from 2018-2023 for electricity was 4.9 percent, with gasoline and common grocery items like bread, milk, and butter each increasing by higher percentages.
That said, we are not immune to the inflationary change and increasing material costs most industries are facing. Our wholesale power costs continue to rise year over year. We also serve significantly fewer members per mile of line than investor-owned and municipal utilities, resulting in fewer people to share the cost of delivering electricity.
As we look to the future, we continue to prepare for rising costs contributed, in part, by transmission and distribution needs that are ongoing. Because, like most cooperatives, LREC does not generate its own power, those higher prices are passed onto the co-ops – which in the end, affects the cost of electricity to the members.
It is also important that we continue investing in our system: updating aging infrastructure needed to provide grid resiliency in the future. Ongoing pole replacements, new conductors (wire), line extensions, and substation improvements identified within our 4-year Construction Work Plan are critical components to upholding Lake Region’s commitment to safe, reliable, and affordable energy.
In addition, an increased reliance on household technology – smart devices, appliances, etc. – and a wider acceptance of artificial intelligence (AI) represent a significant growth in the demand for energy, likely to reach record levels in the future. To ensure the electrical grid can keep up, new generation and transmission projects from wholesale power providers are in the works.
To proactively position the Cooperative for the future, LREC’s Board of Directors recently approved a class cost of service study (CCOSS). As soon as we receive the study’s findings, we will communicate them via our newsletter, website, and social media channels. To help monitor your energy usage, I encourage you to visit our website or contact Member Services about signing up for SmartHub, our free and valuable account management tool.
I look forward to working in partnership with you as we move into the coming year. Please do not hesitate in sending me your thoughts, questions, or concerns.
Cooperatively yours,
Joel Janorschke, CEO