2017 meeting recap and audio
Images courtesy of AIEC
CARLINVILLE – MJM Electric Cooperative held its 78th annual meeting on Saturday, March 25 at the Carlinville High School. Co-op members heard board and management reports, and re-elected three board members. They were Robert Lehmann of Girard, Louis Johnson of Shipman and James Niemann of Litchfield. Members also voted to approve changes to the cooperative’s bylaws last updated 17 years ago.
Chairman Robert Lehmann in his report said the rate of change within the industry has been extraordinary. He credited the local distribution cooperative’s generation and transmission cooperative Wabash Valley Power Association for keeping wholesale rates stable. “Wabash’s on-going risk-management strategy has paid off,” he said. “Their energy hedge plan has positioned us to ride out high prices with minimal impact on costs”.
“Multiple supply sources, fuel types, risk sharing in joint ventures and a blended portfolio of owned assets, now including solar has provided balance and flexibility for meeting co-op member needs”, said Lehmann. He added more information about the new program called “Co-op Solar” would be coming to members through the co-op’s website, newsletter and Facebook page. Also encouraging energy saving projects through the Wabash Power Moves program, MJM Electric members received $73,760 in energy efficiency project rebates in 2016.
Treasurer W. Kay Schultz in the 2016 financial report said that with system growth the co-op’s value had grown by $15 million since 2008. But with lower interest rates debt has remained stable. Equity has also grown by 10 percent and because it is above 40 percent now the co-op receives discounts that also help keep debt stable.
Schultz said, “Because our equity remains strong the board is looking to retire another $400,000 in member capital credit accounts again this year and this will cause little impact to our equity level.”
President/CEO Laura Cutler in her report said the co-op is adopting new technology, filling new skilled jobs positions, adding new infrastructure to meet growth in the Brighton and Jerseyville areas, adding solar energy, and recommending a change in rates.
Cutler said the general direction for rate changes has been to recover fixed costs of distributing electricity in a fixed monthly service fee instead of in a variable kWh charge. She said, “MJM’s fixed costs are incurred regardless of whether a member uses only 1 kWh or 1,000 kWh. MJM’s current rate is not sufficient in collecting fixed costs through kWh sales.”
Concentrating on the 86% of MJM residential members, a cost of service study showed that including all fixed costs should mean that a service charge of $70 would be needed. Cutler, however, said that was unrealistic and a simpler three components, stepped approach had been recommended for the board’s consideration.
The three billing components recommended were a $40 service charge, pure pass through of wholesale power costs currently set at $0.08503 per kWh, and a distribution energy charge of $0.03242 per kWh. The net effect would be $0 for a member using the average amount of 1,000 kWh a month. “Generally, (residential) members using less than 1,000 kWh will receive an increase and accounts consuming more than 1,000 kWh will receive a decrease,” said Cutler.
The board of directors has not made a final decision on new rates. When a decision is made, Cutler said district meetings will be held and members will also be updated through the co-op’s monthly newsletter, bill stuffers, Facebook page and website. “I do not foresee any changes taking place for six to eight months once the board decision is made,” said Cutler. She added that plans have been made for a Member Advocate Committee. The knowledge and skills of this group will hopefully complement the board of directors. “We want a structure in place that leads to a super-knowledgeable membership and we will keep that in mind as we form the mission and objectives for this committee,” said Cutler.
For many years the co-op has struggled to meet the growth of the cooperative with inadequate office and warehouse space in a residential part of Carlinville. This arrangement has not only created inefficiency and cramped space but also safety problems. Management of the co-op has recommended the purchase of land that adjoins the city limits of Carlinville for a new office and warehouse facility. The board has not made a final decision, but the move would be justified by improved security, safety, efficiency, lower insurance rates and tax considerations.
Cutler said, “Your board wants to do the right thing by the membership and we are looking to the future and what we need to do to serve our members for another 75 plus years. A temporary fix doesn’t appear to be the answer.”
The co-op is already doing what it can to improve efficiency by moving away from old work practices. For example, they’ve moved from paper maps to digital mapping improving accuracy, efficiency and costs. Linemen can view current and up-to-date maps through iPads in their trucks. New outage management software can be integrated with the digital maps to improve outage information for both dispatchers and members. This has helped to make a real-time outage map possible on the co-op’s website https://ebill.mjmec.coop/oms/outageMap.
After a few decades, it has become necessary for a long-range work plan to be completed to provide a construction needs roadmap. For example, a new substation may soon be needed to cover load growth in the Brighton/Jerseyville area. The co-op will also continue its pole replacement program following up the work done in 2016 when 5,080 poles were tested and 543 poles were replaced.
An aggressive right-of-way vegetation management has also helped improve outage times and another $1 million will be invested in 2017 to clear 345 miles of right-of-way and spray 375 miles. The maintenance investment is paying off and Cutler reported in 2016 the co-op had the lowest outage times in four years.
To keep up with the changes, Cutler said three additional employees were hired: IT Administrator Chris Franzen, Level 1 Engineer Gage Gwillim and Apprentice Lineman, Matthew Waters. Cyber security is a new threat to all businesses and Cutler added that Franzen, along with Wabash Valley Power employees, have performed cyber security audits and are constantly working to lower the new threat by updating hardware and software, applying updates and patches, and training employees to help prevent and mitigate cyber threats.
MJM Electric Cooperative is a member of Touchstone Energy — an alliance of 750 local, consumer-owned electric utilities around the country. MJM Electric is committed to providing superior service based on four core principles: integrity, accountability, innovation and commitment to community. The co-op serves more than 9,275 meters over 2,127 miles of line in Macoupin, Jersey, Montgomery, Bond, Fayette, Greene and Madison counties. For more information visit www.mjmec.coop. MJM Electric Cooperative is an equal opportunity provider and employer.