With these recent cutbacks and the uncertainty of the economy, we spent a big portion of the year concentrating on where we could streamline our expenses. The staff and employees took a hard look at budgets and made the necessary adjustments to cut back where possible without sacrificing service. We postponed several infrastructure projects and some of our normal community support projects had to be temporarily stopped. We also took a look at some of our incentive programs and made the necessary changes to help our cash flow. These changes will take effect in 2010.
Rates in 2009 increased slightly. During the year, we saw about a 4 percent increase from our power supplier. Due to the fact revenue was down, we didn’t have the ability to absorb the increase. So, it was passed on to our members in our wholesale power cost tracker. Margins for the year remained strong due to some of the expense cutbacks, but cash was down mainly due to the reduction of revenue from our commercial members.
Even with all of this, there are some new things happening in 2010 that will add services to our members and give both them, and us, the tools to increase our energy efficiency and, hopefully, help cut bills. We are beginning to upgrade our metering system to give it the ability to have two-way communications to and from the members’ meters. This will allow our power supplier to communicate directly with the meter and monitor load as well as send out signals to reduce power use when needed. We have similar capabilities now with the load management switches, which a lot of our members have installed; but this new technology will eventually take that control to another level. This is the first step in what many of you have probably heard about — "smart meters." This technology will not only allow us to communicate with the meter, but will allow the homeowner to monitor their own use. It will also give them the ability to install "smart" thermostats. Smart thermostats allow homeowners the ability to see, at any given time, their use and how much it is costing — either directly from the thermostat or from a remote location using the Internet. Two-way metering will also allow us to monitor our system more closely and possibly introduce "time-of-day" rates.
While these changes will take several years to implement, we are very excited about the fact that we will have these options in the years to come. This is another service we feel is important to our members and will give more control to them on the efficiency of their home or business. We are also continuing our energy efficiency programs in 2010 to help our members get the most out of their energy use.
Our hope is that rates will stabilize in 2010. Wabash Valley Power and the Indiana Statewide Association of Rural Electric Cooperatives are both working hard with our state and federal legislature to try to keep regulations and laws from drastically increasing rates. They have both been to Washington, D.C., to talk about the "cap-and-trade" initiative being introduced by the present administration to hopefully stop or lessen the impact. Wabash Valley Power is also looking at new generating facilities and working with existing supply contracts to level out the recent spikes in power production costs. As Wabash County REMC moves on into 2010, we know the industry is changing and the challenges are going to be different than what we have faced in the past. We must continue to stay up to date on technology and increase communication with our members to give them the ability to manage their energy needs. Service will continue to be our main focus as it has been in the past, but the services will continue to evolve into different forms in the future.
