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NEOEC members among those to be impacted by power cost adjustment


The fabric of our community N T


HE year 2012 has been designated as the International Year of Cooperatives. As a result, cooperatives everywhere are cel- ebrating our unique not-for-profit, member-owned and mem- ber-controlled business model. If you’ve read The Northeast Connection, then you know North- east Oklahoma Electric Cooperative is an electric cooperative—as a result, you and everyone else who receives electric service from us is a member, not a customer. Because you and your fellow members govern how Northeast Oklahoma Electric Cooperative operates, our top priority remains providing safe and reliable service and keeping your electric bills affordable. Local control also means we’re in the business of improving the quality of life in the communities we serve, from offering college scholarships to advice on how you can make your home or business more energy efficient. Electric co-ops are just one type of coopera- tive operating in America. Dairy coopera- tives produce nearly 90 percent of our nations’ milk. Credit unions are coopera- tives, too, with more than 8,000 across the country serving 91 million consumers. You can also find housing, hardware, and even funeral co-ops throughout the U.S. Some agricul-


tural marketing cooperatives have become household


names: Sunkist, Ocean Spray, and Blue Diamond Almonds for ex- ample. Together, all of us are a key part of our local economy. We provide good jobs to folks who live right here—your neighbors and friends. We deliver goods and services that keep our communities humming. We’re happy to lend a hand when we’re able, and we enjoy being involved with schools and community organizations. At Northeast Oklahoma Electric Cooperative we return any excess profits, called margins, to you in the form of capital credits. That money then gets reinvested locally—perhaps at a grocery store or other retail outlet, which in turn allows the owners to hire more people.


While not a new concept—Benjamin Franklin started the first cooperative, the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, in 1752 (it still operates today!)—the cooperative form of business continues as an integral part of our lives each day.


4 Northeast Connection


ORTHEAST Oklahoma Electric Cooperative received notice that its primary power supplier, the Grand


River Dam Authority, implemented a recalcu- lated power cost adjustment (PCA) for the first six months of 2012. A new rate to corre- spond to the PCA was approved by the GRDA directors at their December 2011 board meeting.


A power cost adjustment allows power suppliers the flexibility to compensate for fluctuations in the cost of fuel. When the cost of purchased power is divergent from an anticipated level, the power cost adjustment comes into effect. It is passed on to distribu- tion utilities and eventually reflected on customer bills.


Cooperative members are among those who will be impacted by the adjustment. “We work very hard to insulate our mem- bers against increases, but this is an issue being faced by utilities across the country,” said Cindy Hefner, Manager of Public Rela- tions for Northeast Oklahoma Electric Coop- erative. “It is important for every cooperative member to know that NEOEC continues to offer reliable service at reasonable rates.” GRDA Chief Executive Officer Daniel Sullivan points to a sharp increase in coal freight costs as the reason for the recalculated PCA.


“While generation from the coal-fired complex has been reliable and consistent year after year, the freight component continues to escalate with a significant increase effective January 1, 2012,” said Sullivan in a letter to GRDA customers. “Those higher costs to deliver the coal became more evident during the second half of 2011.”


Sullivan added that GRDA anticipated


ending 2011 with a $17 million under-collec- tion of power costs. “Although GRDA’s fuel costs are increas- ing, our generation resources remain very competitive,” he said. “We feel our long-term, beneficial partnerships—along with our diverse generation resources—have each of us well positioned to serve the future needs of our communities and customers.”


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