President recounts history of cooperative
by MAC OVERTON
Apr 11, 2013 | 920 views | 0 0 comments | 2 2 recommendations | email to a friend | print

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Upshur Rural Electric Cooperative President Frankie B. King told the 300-plus members who assembled at the co-op auditorium for the co-op’s 76th annual membership meeting Thursday that “Upshur Rural has grown from a few hundred members, 28 miles of electrical lines, and less that $200,000 in assets to an organization of over 44,000 meters, 6,500 miles of lines, with assets approaching $150 million.”

King said that “Upshur Rural is big business, and as such, deserves the attention, concern and sense of responsibility from its members as you are demonstrating you have by your presence here today.”

For those who might have been attending their first meeting of co-op members, he gave a brief history of the Rural Electric Association (REA) and how it brought electric power and the modern age to homes in rural areas across America.

“I do that over and over, because I think it is important for those of us who enjoy the benefits, comforts and efficiencies that electricity brings to our homes and farms to know and understand that if it were not for a small group of men in many towns across the nation, like Gilmer, Texas, none of this would be possible.”

He said that our forefathers begged investor-owned utilities to bring power to rural areas, but it fell on deaf ears, because the cost would be such that it would not return a profit to stockholders.

“Homes were too far apart and the usage would be too small,” he said. “So when doors were shut, true to the grit of the rural people in communities across this great country, they took matters into their own hands and did what needed to be done to improve their lifestyle and put their standard of living on the same level as their city cousins and friends.”

Those who took the step of joining the original co-op knew that the $5 membership fee would buy enough kerosene to last almost a year, he said, but they took the chance and persuaded friends and neighbors to give the co-ops an easement so lines could continue to the next farm.

“And they were successful, and what we have today is the result of their hard work, determination, and never-give-up attitude.”

King said that a lot of changes have occurred in the past 76 years. Then, fewer than 100 kilowatt hours were used each month by the first members, compared to 1,800 today.

They’ve grown from 28 miles of line to more than 6,500. Equity has increased from less than 1 percent to 69 percent. Upshur Rural is no longer a borrower of U.S. government funds.

“And another change, but not one we welcome, is that your electric bill has gone up,” King said.

He said that originally, the co-op, like others, was allowed to set up substations next to investor-owned utility (IOU) substations and buy power directly, then add on the co-op’s operating costs to deliver the power to the members’ homes.

The flaw in this system was that the IOU could increasethe price it charged an any time.

In the early 1970s, co-ops across the country began to devise a remedy for this, and found the answer again in “the cooperative way.”

Upshur Rural and five other East Texas co-ops formed a larger co-op known as a “generation and transmission co-op (G&T).”

At first, they combined negotiations in purchasing power. Then they partnered with others to build generating plants, so that now, the co-op contracts for only about 20 percent of its needs.

Eighty percent comes from membership in the G&T. He said this has led to some increase in electric bills because of the capital investment required. As old plants wear out, operating cost also increases.

As demand grows and new plants are built, costs of the new plants are always higher than the old ones.

King also related the start-ling information that new air pollution upgrades ordered by the federal Environmental Protection Agency (EPA) “sometimes costs more than the original cost of the plant.”

He said the fuel cost, whether “from the well head or the mine mouth,” has increased, whether they own the generation or buy it under contract.

But he said that if they had not joined in the G&T, costs would be higher than they are today.

He said that increasing costs are of much concern to the co-opo’s board, and they have worked to keep it as low as possible. The operational cost, the difference between cost of generation and delivery, (also known as the “margin”) has remained constant at less than 1 percent per KWH for the last 20 years.

“We have managed to do this by finding efficiencies, doing more with less, squeezing the dollar, and all the while returning to our membership more than $3 million in capital credits last year.”

He said that the co-op is operated day-to-day “by some of the finest men and women you can find,” they are constantly striving to improve reliability and efficiency.

He said that Upshur Rural spends mroe than $1 million annually in clearing rights-of- way and vegetation control.

Recently, they’ve embarked on system-wide pole inspection and replacement.

Their 5-year capital budget calls for them to spend several million dollars for transmission and substation upgrades.

King said that when their system gets “hammered,” as it did on Easter weekend before the annual meeting, they have two major goals: Get power restored as quickly as possible, and assure safety of employees who are working to do that. That safety includes not having men who are exhausted continuing to work around deadly high voltage.

General Manager Rob Walker’s report on 2012 operations appeared in the Saturday, April 6, edition of The Gilmer Mirror.
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