June 23, 2010

Growth brings challenges and opportunities for cooperative

By Tina Foreman
Farmer Staff Writer

For some, birthdays are a big deal. For others, they are just a way to mark time. For McKenzie Electric Cooperative, (MEC) its 65th Annual Meeting not only served as a birthday party for the Cooperative, it was also an opportunity for members to hear everything that is going on within the Cooperative. And there is a lot going on.
“This year’s meeting focused a lot on growth and what it means for our members,” says John Skurupey, McKenzie Electric Cooperative general manager/CEO. “This is a time of fun, excitement and challenges. This time of growth is good for the Cooperative and its members.”
It’s because of the Cooperative’s growth that members went for 20 years without a single rate increase. However, beginning in May, members received a retail rate increase of 12.28 percent, the first increase since 1990.
“The rate increase was largely due to an increase from our power suppliers,” adds Skurupey. “Even though our power suppliers have done a phenomenal job of keeping our costs down, the time finally came that we had to pass on some increases to the members.”
According to Skurupey, Since Jan. 1, 2007, MEC’s wholesale rates have increased 27.4 percent, pushing the board of directors to commission a cost-of-service study to allocate costs appropriately among the rate classes.
“When you compare MEC to other cooperatives in the state, you will find that our rates are among the lowest,” says Skurupey. “Part of that is due to our power suppliers and the rest is due to the growth we are seeing in this area.”
The growth, according to Skurupey, has been a good thing for the oil industry, but also for residential and other business customers.
“The growth has made MEC a more reliable power source for all of our customers,” states Skurupey. “This is because when we add new lines, we are also replacing old worn lines, making everything run smoother.”
It’s no secret that with growth comes growing pains, and MEC has not been without its share.
“One thing that tends to be adversely affected during a time of significant growth is landowners willingness to grant easements or right-of-way,” says Skurupey. “Oftentimes, we hear from landowners that line extensions are being made across property for the sole purpose of serving oil, and because they aren’t getting anything from the oil development, they don’t want to allow the easement.”
So far, MEC has been able to work through its growing pains including finding workers to complete all of their projects while they continue to offer reliable service to their residential and business customers.
“During the last boom, MEC hired workers to help with the increase and growth,” says Skurupey. “However, when things slowed down, the Cooperative was forced to lay off many workers. That is something we don’t want to do this time around, so we are using contract labor instead of hiring new workers.”
For 65 years, MEC has existed for one reason – to provide rural farm, ranch, business and residences with access to low-cost, reliable electricity.
“The fact that MEC serves fewer consumers with more facilities and does it at comparable rates to those cooperatives that serve towns and cities, is in my opinion, truly amazing,” adds Skurupey. “MEC is in great shape at 65.”