Key insights
- An electric co-op is increasing connection fees despite rising net margins, potentially due to rising operating expenses, depreciation, interest, taxes, or planned capital expenditures. This action, if widespread, could signal inflationary pressures in the utility sector and strain on consumer discretionary income, but the limited scope makes it a weak negative signal for broader US equities.
Why would my electric co-op increase their connection base charge from $15 to $20/month. This seems odd considering the marked increase in their net margins. They are also considering raising delivery rates. I guess I don't understand utility finance.
|Comparative Operating Statement (000)|2021|2022|2023|2024|2025| |:-|:-|:-|:-|:-|:-| |Operating revenues and patronage |95,182|108,270|104,217|104,855|119,538| |Less: Cost of Purchasing Power |65,487|76,938|71,919|69,326|81,307| |Gross Margin |29,695|31,332|32,298|35,529|38,231| |Less: Departmental Operating Expenses |17,160|18,232|19,080|20,627|22,209| |Less: Depreciation, Interest and Taxes |11,742|12,195|12,660|13,646|14,477| |Operating margins |793|905|558|1,256|1,545| |Plus: Other Income |714|538|1,015|495|349| |Plus: Capital Credit Allocations |2,044|3,990|3,879|2,935|6,743| |Net Margins |3,551|5,433|5,452|4,686|8,637| |Net Margin % of Revenues|3.73%|5.02%|5.23%|4.47%|7.23%| |Operating margin % of Revenue|0.83%|0.84%|0.54%|1.20%|1.29% |
Perhaps I should be looking at Operating margin %?