The reliable and affordable power we benefit from today is the result of careful planning and prudent investments that occurred decades ago. To be sure, when Farmers Electric Cooperative, Inc., was founded in 1938, the energy landscape looked quite different than it does today. Once in its infancy, our bulk electric system has now matured with the assistance of diversified power generation sources and improved technology.
As your representative on the Central Iowa Power Cooperative Board of Directors, I am committed to the critical work of continuing the stewardship of your electric service that began all those years ago. Decisions made then, and decisions made now will determine our future path to success. To get there, we need to keep our eyes focused on the horizon.
For that reason, the CIPCO Board of Directors began 2024 by refreshing our strategic plan. Safety and security, reliability, strategic partnerships and financial strength were the pillars upon which we weighed every action we took on behalf of our Member-owner electric cooperatives. We mindfully and conservatively deliberated plans for much-needed new power generation, fortified by the findings of an updated Integrated Resource Plan, which clearly asserted the demand for electricity shows no signs of slowing down. Basically, the sooner we can have new generation up and running, the better.
Rising demand for electricity across our region stems from industrial expansion of manufacturing facilities, data centers, mining cryptocurrency, small businesses and ongoing residential growth and general electrification. While it certainly presents an opportunity, it is not risk-free. Today’s complex regulatory environment complicates our business and has threatened the affordability and reliability of the generation we need to serve these large loads. Our ongoing partnership with fellow CIPCO Member-owners to mitigate some of these risks through innovative rates and contract structures has prepared us to welcome new businesses and industries and expand existing ones.
As a CIPCO Board member, I am excited about what the future holds for CIPCO, and Farmers Electric, as we pursue opportunities to bolster our balanced and diverse portfolio with reliable energy and capacity that will consistently serve us for decades to come. The planning for the development and construction of new generation assets in 2024 will be remembered as the launch of the latest capacity expansion for CIPCO.
CIPCO’s positive financial standing is due to the long-term support of its Member-owners like Farmers Electric. For 2024, CIPCO realized a net margin of $30.4 million, well ahead of budget. Throughout the year, CIPCO maintained stable rates, returned patronage capital to our cooperative, and strengthened the balance sheet as we planned for major capital additions.
Despite May 2024 tornado outbreak that caused widespread damage across the CIPCO system, CIPCO maintained an overall outage rate of 0.84 hours per consumer, still under the target of 1.00 hour per consumer. For 2024, Farmers Electric’s was 1.17 hours per member.
On the financial side, in 2024, both Standard & Poor’s and Fitch Ratings once again maintained CIPCO’s ‘A’ ratings which confirm CIPCO’s financial strength. This was echoed in the sound financial practices that allowed margins to be returned to CIPCO Member-owners in the form of patronage, a key component of the cooperative business model. In 2024, CIPCO returned patronage totaling $465,468 to Farmers Electric.
CIPCO was created for one reason: to serve its Member-owner cooperatives. Its transmission system remains reliable, and its growing power supply resources enhance the value of membership. We are proud of our accomplishments and remain confident that the path ahead will bring continued reliability and opportunities for your local electric cooperative.