Message From CEO Steve Marlow
East Central Iowa Rural Electric Cooperative has been around for a long time—80 years to be exact. We’ve witnessed the many ways electricity has transformed the communities we serve and our rural landscape. Before electricity, today’s household tasks were difficult and dangerous. For example, cooking and washing clothes involved a lot of manual labor. Thankfully, practically everything we do is impacted by the ease of electricity.
A lot has changed since electric cooperatives first turned the lights on for rural Iowa. One thing that hasn’t changed is our mission to provide electricity to you. Because we’ve been reliably, efficiently, and affordably delivering electricity to homes and businesses for decades, some of our members ask why they still need to pay for a system that should have been paid for by now.
The truth is, most—if not all—of the original system was paid for many years ago. But the original infrastructure, such as poles and wires, has likely been replaced. When you have a system that operates 24 hours a day, 365 days a year, equipment needs to be replaced at regular intervals. Imagine if you had a car that was 80 years old and was driven all day, every day. By now, either the car would not be operating or every part of the car—from the tires to the engine—would have been replaced many times. The same is true for utility infrastructure. While poles and wires generally have a lifespan of 30-40 years, some may not last as long due to a variety of conditions. For example, a major ice storm can cause power lines to snap and poles to break, regardless of their age.
Paying for an electric cooperative system can be compared to paying for your home. Over many years or decades, the original tract of land and the physical property are paid for in full. But infrastructure updates—such as a new furnace, air conditioner, windows, and roof—are required, not to mention updates to appliances, carpeting, flooring, and paint. Consider how inefficient it would be to heat your home with an 80-yearold furnace. Think of the additional money you’d spend each month due to its inefficiency instead of replacing it with a new model. The same logic applies to ECI REC as we need to replace vehicles and equipment over the years to serve you best. Aside from the costs of hard assets at ECI REC, there are also the costs of property taxes, insurance, regular maintenance, and staffing that contribute to our overall system costs.
The original electric cooperative infrastructure fulfilled the expectations of that time in terms of reliability and affordability. Over the years, many of those needs have changed. What’s in place today is an improved distribution system that allows us to meet increasing demands for kilowatt-hours in an efficient manner. Not only has the need for electricity increased, our processes now result in reduced outage times. We also work to extend the life of infrastructure through maintenance at regular intervals. Poles are routinely tested for termites, and we trim vegetation throughout our system on cycles to maintain a high level of reliability. To balance reliability with affordability, we upgrade our system when and where it makes sense to do so. We balance financing upgrades and replacements with debt and equity so that we can keep your rates affordable while providing power that you can count on for your home or business.