Have you ever looked at your electric bill and wondered how your rates are determined? At LMRE, we believe in transparency, and as a member, it's important to understand how our rate-setting process works.
LMRE is a not-for-profit, member-owned cooperative. That means rates are not set to generate profit, but to recover the actual cost of delivering safe, reliable electricity throughout our service territory. Any excess margins are returned to members as capital credits.
Here's how our rate-setting process works:
UNDERSTANDING OUR COSTS
Each year, LMRE conducts a cost-of-service study, analyzing everything it takes to deliver electricity to our members. The cost of wholesale power (generation and transmission from Buckeye Power) accounts for roughly 60% of the per-kilowatt-hour charges on your monthly bill, with the remaining 40% covering cooperative-specific expenses like line maintenance, system upgrades, and daily operations.
EVALUATING REVENUE NEEDS
After identifying total costs, current revenue is reviewed. If existing rates do not cover expenses, or if certain member groups are paying disproportionately, adjustments are proposed to ensure both fairness and financial stability. The study also evaluates rate performance across residential and commercial classes to determine appropriate cost distribution.
DESIGNING FAIR RATES
Rate structures are developed to align costs with usage patterns across member types. Rates are designed to ensure that those who drive costs pay their fare share, supporting both equity and system reliability.
BOARD OVERSIGHT
Proposed rate changes are presented to LMRE's board of directors - local members elected to represent the cooperative's interests - during the annual budget meeting in December. The board reviews the proposal and provides input before any changes are finalized.
COMMUNICATION AND IMPLEMENTATION
Once approved, changes are communicated clearly and in advance. Members are informed about what's changing, why it's necessary, and when the new rates will take effect.
At LMRE, every decision we make, including how we set rates, reflects out commitment to providing our members safe, reliable, and at-cost power. Through careful planning and a members-first mindset, we ensure your cooperative remains strong, transparent, and dedicated to your needs.