Shelby Electric Co-Operative Holds Annual Meeting

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Published on June 22 2012 7:04 pm
Last Updated on July 14 2013 4:07 pm
Written by Greg Sapp

Shelby Electric Cooperative held its 74th annual member meeting June 15 at the Chautauqua Building in Forest Park, Shelbyville, where members were served a pork chop lunch, heard reports and elected members to the board of directors.

(CURRENT BOARD MEMBERS RICHARD BOGGS OF MACON AND JAMES McCOY OF BLUE MOUND ARE SEEN WITH NEWLY-ELECTED BOARD MEMBER BRENT LIVELY OF TAYLORVILLE AND PRESIDENT/C-E-O JIM COLEMAN OF SHELBYVILLE)

During the meeting members re-elected Richard Boggs of Macon and James McCoy of Blue Mound. In a contested election Brent Lively of Taylorville defeated Lawrence Oller also of Taylorville. Oller had served on the board of directors since 1976.

In his report Board Chairman Darrell Shumard of Stewardson outlined the different costs that make up each dollar in the members’ bills. He said that wholesale purchased power equals 61¢, operations and maintenance expenses is 13¢, depreciation is 7¢, administration and general expenses are 6¢, consumer billing and information expenses are 5¢, interest expense is 5¢ and taxes equal 3¢ of every dollar in the electric bill. Although rates have increased along with these expenses Shumard said the board’s goal is to have stable rates and reliable power.

“The bottom line is that we have little control over most of these expenses without affecting reliability,” said Shumard. “We only have discretionary control of less than 2¢ out of every dollar. This isn’t a lot of money out of the total, but the board looks carefully at every dollar spent on your behalf. Your directors are members too and everybody at the cooperative works very hard at using every dollar you pay to get the most value."

Duane Noland, president/CEO of the Association of Illinois Electric Cooperatives and a member of Shelby Electric Cooperative from Blue Mound, asked the members to let their elected officials and the EPA know what they think of new proposed regulations on electricity generated from Illinois coal. Noland said because the population of downstate and rural Illinois continues to decline it is even more important for rural citizens to become politically involved.

“We are seeing dramatic pressure on one of our most abundant energy resources — coal,” said Noland. “The way the U.S. EPA is heading they will eliminate coal as an alternative for new power production in the United States. But from now until June 25 the U.S. EPA is taking comments. If you want to make your voice heard on this issue you can go to a website called www.ourenergy.coop and send a message to the EPA. Let them know that you think coal should be a part of our energy future and it is good for downstate Illinois.”

Jay Bartlett, president/CEO of Prairie Power, Inc., the generation and transmission cooperative providing wholesale power to Shelby Electric, said that Illinois alone has coal reserves equal to the oil energy in Saudi Arabia and that the projected market for Illinois coal will double in the next decade. However, most of that coal will be shipped down the Mississippi River and overseas. “Our current government has taken the stance that we don’t want any more coal plants,” said Bartlett. “That is not what is happening in other countries.”

Bartlett said despite the regulatory challenges, there is good news for energy consumers in the United States that could lead to an increase in jobs from industries that depend on natural gas. “Between affordable coal and natural gas we have some tremendous advantages in the United States. We are really blessed and our cost of energy is going to be very stable.”

Bartlett said the new Prairie State coal-fired generating plant, located near Lively Grove Illinois and owned by several Midwest consumer-owned electric cooperatives and municipal utilities, will help keep rates stable. “Unit one came on line two weeks ago,” said Bartlett. “This is the cleanest and most efficient coal plant in the world. This plant generates about 40 percent less green house gasses than the older coal plant we had to shut down earlier this year. We have a long-term coal supply being mined on the same site so we will not be subjected to market based rates for coal or have transportation costs. We also, along with two other electric cooperatives, bought 40 megawatts of wind power from a wind farm near Paxton Illinois. This will also help with our power supply diversification.”

Bartlett said that natural gas has been the biggest game changer in the energy market. We are now basically the Middle East of the natural gas market. U.S. natural gas is at about $2, while in Europe it is about $9.”

He said for comparison if we could run our cars on natural gas it would be like paying 88¢ for a gallon of gasoline. “If you made the same type of comparison for the cost of coal power from the new Prairie State plant it would be half of that,” said Bartlett.

President/CEO of Shelby Electric Jim Coleman, said that new regulations are forcing the closure of older coal fired generating plants forcing a decline in the supply of generation. However, the decline in natural gas prices is keeping the short-term market prices for electricity low. Based on past market history Coleman said he didn’t think the low price of natural gas was sustainable and that the attractive rates offered by power marketers today would likely go up in the future.

On a local level, Coleman said the co-op’s rate change in January was implemented after conducting two independent cost of service studies by outside consultants. He said, “One unfortunate result of that study highlighted one class of accounts that was significantly out of alignment with the other rate classes. These accounts were for geothermal heating and cooling systems that are separately metered. This class still enjoys a lower price per kWh than the standard residential rate because the compressor can be controlled on peak. While it’s regrettable this class saw a higher percentage increase than average, it was necessary to prevent cross subsidization.”

On the positive side, Coleman said the not-for-profit cooperative has paid back over $5.8 million in capital credits to member. He said, “We only have a little over $2 million on the books to repay in the future. I believe no other co-op in Illinois has a more aggressive plan to give the members back their money.”

Treasurer Richard Boggs of Macon reported that revenue for 2011 totaled $30,941,640. However, expenses were also up and the co-op ended the year with a negative margin of $1,191,292.

Shelby Electric Cooperative is a member of Touchstone Energy — an alliance of more than 735 local, consumer-owned electric utilities around the country. Shelby Electric's mission statement is they are committed to providing superior service based on four core principles: integrity, accountability, innovation and commitment to community. The co-op serves more than 9,927 meters over 2,182 miles of line in parts of Christian, Cumberland, Effingham, Fayette, Macon, Montgomery, Moultrie, Sangamon and Shelby counties. For more information visit www.shelbyelectric.coop. Like their facebook page by visiting www.facebook.com/YourCoop.