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Commentary Fair rates for all consumers T


Chris Meyers General Manager, Oklahoma Association of Electric Cooperatives


he traditional util- ity model of large central station pow- er delivered over


transmission grids to the lo- cal distribution providers and to your home is changing in some parts of the country. The change that is occurring is a blending of significant


numbers of small distributed energy resources (DERs), like small wind turbines and solar pan- els, with traditional large central station power. It is creating some unintended cost shifting among consumers. In Oklahoma, we enjoy some of the lowest elec-


tric rates in the country. Our cost per kilowatt hour is well below the national average. Because our cost is low, we haven’t seen very many DER installa- tions. It simply doesn’t have a favorable payback. However, in states where electric rates are much higher or where states have adopted policies that provide enough cash or tax incentives to effectively lower DER costs, consumers are beginning to in- stall them. In any case, decisions to install DER come down to economics. Is it favorable to individuals and/or businesses making the decision or not? Results of this analysis depend entirely on the manner in


which a utility has developed its rates. Historically electric utilities have tried to keep electric bills simple and easy to understand by re- covering costs in only two charges. There is a basic service charge, which in theory should cover all fi xed costs like generation assets, transmission grid, poles and wires and linemen—everyone likes this part of the bill to be small and therefore it under recovers. The second charge is a price per kilowatt hour (the more you use, the more you pay) and this is where the balance of fi xed costs are being recov- ered. The problem with this approach is it places a false or artifi cially high value on the kilowatt hour by loading some fi xed costs into that charge. So when members consider installing DER they


are not getting the proper price signal. By offsetting or avoiding kilowatt hour charges through self- generation they are also avoiding many fi xed costs. Consumers who install DER still rely on the grid and distribution system. If those who install DER avoid their share of those costs, who picks them up? The answer is: the remaining consumers, as costs get shifted to the rest of the membership. Putting DER rates in place now by local co-op boards will save everyone lots of heartache later. As electric cooperatives, we are not protecting old util- ity models or profi t margins—we are interested in fairness among all members as we deliver afford- able, reliable and safe electric power.


Benefi ts of your statewide association H


Joe Harris President, Oklahoma Association of Electric Cooperatives


ave you ever won- dered who is re- sponsible for the copy of Oklahoma


Living magazine you’re hold- ing in your hands? More like- ly than not, you receive the magazine because you are a member of an Oklahoma electric cooperative. Co-op


members across the state refl ect a dynamic demo- graphic, and I thought it would be a good idea to highlight the purpose and mission of our statewide association, the Oklahoma Association of Electric Cooperatives (OAEC). Many of you probably don’t know what our statewide organization is all about and how you benefi t from it as a member- owner of your cooperative. Oklahoma cooperatives established OAEC in 1942, when it became obvious that we needed a unifi ed voice. Oklahoma Rural News, then a black and white newspaper, came to life in 1948. The un- derlying motivation and purpose for the establish- ment of OAEC was for co-ops to accomplish what was diffi cult or impossible to do as individual co- operatives. Through the years, the statewide’s ben- efi ts to the cooperative program have continued to


4 WWW.OK-LIVING.COOP


grow—from its modest beginning to now being a multi-faceted array of services directed to local co- ops and their members. As the years pass by, it’s easy to forget the chal- lenging circumstances that brought about the cre- ation of electric cooperatives. In 1937, nearly 90 percent of farms and ranches had no electric power. At that time, it was crucial to make known the po- litical and economic importance of rural areas be- coming electrifi ed. In fact, the fi rst OAEC offi ce was located in the State Capitol building—a remark- able recognition of the rural electric program. Today, OAEC publishes the largest subscription-


based publication in the state, Oklahoma Living. The statewide also provides a unifi ed voice for the 30 electric cooperatives in Oklahoma at the legisla- ture and regulatory agencies, both at the federal and state level. OAEC is the home of a credit union for co-op employees, and it administers a self-insured, workers compensation fund as well as job training and safety programs. In addition, the statewide brings the co-ops together to sponsor a vast array of life-impacting youth programs. We know the co- operative family in Oklahoma is proud of the meaningful services OAEC brings to each local co- operative and its members.


Oklahoma Association of Electric Cooperatives


Chris Meyers, General Manager Joe Harris, President


Jimmy Taylor, Vice-President Kendall Beck, Secretary Gary McCune, Treasurer


Staff


Sid Sperry, Director of PR & Communications sksperry@oaec.coop


Anna Politano, Managing Editor editor@ok-living.coop


Larry Skoch, Advertising Manager lskoch@ok-living.coop


Christy Johnson, Offi ce Manager cjohnson@oaec.coop


Kirbi Mills, Accountant/Offi ce Manager Asst. kmills@oaec.coop


Hayley Leatherwood, Multimedia Specialist hleatherwood@ok-living.coop


Editorial, Advertising and General Offi ces


P.O. Box 54309, Oklahoma City, OK 73154-1309 Phone (405) 478-1455


Oklahoma Living online: www.ok-living.coop Subscriptions


$3.12 per year for rural electric cooperative members.


$6.00 per year for non-members. Cooperative Members: Report change of


address to your local rural electric cooperative. Non-Cooperative Members: Send address


changes to Oklahoma Living, P.O. Box 54309, Oklahoma City, OK 73154-1309.


Oklahoma Living (ISSN 1064-8968),


USPS 407-040, is published monthly for consumer-members of Oklahoma’s rural electric cooperatives by the Oklahoma Association of Electric Cooperatives, 2325 E. I-44 Service Road,


P.O. Box 54309, Oklahoma City, OK 73154-1309. Circulation this issue: 316,433


Periodical postage paid at Oklahoma City, Oklahoma. The Oklahoma Association of Electric


Cooperatives is a statewide service organization for the following electric cooperatives: Alfalfa,


Arkansas Valley, Caddo, Canadian Valley, Central Rural, Choctaw, Cimarron, Cookson Hills, Cotton, East Central Oklahoma, Harmon, Indian, KAMO Power, Kay, Kiamichi, Kiwash, Lake Region,


Northeast Oklahoma, Northfork, Northwestern, Oklahoma, Ozarks, People’s, Red River Valley,


Rural, Southeastern, Southwest Rural, Tri-County, Verdigris Valley, and Western Farmers Electric Cooperative.


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