Tere are three main types of
electricity providers in the U.S. Investor-owned utilities (IOUs) serve primarily densely populated areas.
Municipal-owned utilities also serve densely populated cities from the very large, such as Los Angeles, to the very small like Robersonville, NC. And of course, there are rural electric cooperatives like Harmon Electric Association that serve very sparsely populated parts of the country. In the utility business, population matters a lot. Since the
costs to serve any given area are similar, the more customers that you have allows you to spread the costs among more people to keep rates lower. At least that is the theory. Te graphic to the right shows the national averages
of density and revenue per mile of electrical line for IOUs, municipal-owned utilities and electric co-ops. Municipal- owned utilities, which operate in cities and towns, have the greatest density – 48.3 customers per mile of line, generating an average of $113,301 of revenue. IOUs follow with 34 customers per mile of line, while generating average revenues of $75,498. Finally, electric co-ops average 7.4 members (not customers, but members) per mile of line, bringing in an average of $14,938 of revenue per mile. Harmon Electric is well below the national average for
cooperatives in both meters per mile and therefore revenue per mile. Harmon Electric serves 1.2 members per mile compared to the average for co-ops of 7.4. In 2014 Harmon Electric generated $4,543 of revenue per mile of line. Tis is about 1/3 of the national average for cooperatives. If I were to give this data to any business school in the
country and ask (based on this information) what the rates should be for each of the utilities, the answer would likely be that Harmon Electric would have a rate 25 times greater than municipal-owned utilities and 16 times higher than IOUs – but that is not the case. Why not? It has to do with the business model. IOUs are owned by
HARMON ELECTRIC ASSOCIATION, INC 114 North First Hollis, OK 73550
Operating in
Beckham, Harmon, Jackson, Kiowa and Greer Counties in Oklahoma and Hardeman and Childress Counties in Texas
Member of Western Farmers Electric Cooperative Oklahoma Association of Electric Cooperatives National Rural Electric Cooperative Association National Rural Telecommunications Cooperative Texas Electric Cooperative, Inc. Oklahoma Rural Water Association, Inc.
HARMON ELECTRIC HI-LITES Lisa Richard, Editor
The Harmon Electric Hi-Lites is the publication of your local owned and operated rural electric cooperative, organized and incorporated under the laws of Oklahoma to serve you with low-cost electric power.
Charles Paxton ......................................................................................... Manager
BOARD OF TRUSTEES Pete Lassiter..................................................................................................District 1 Jim Reeves....................................................................................................District 2 Lee Sparkman...............................................................................................District 3 Bob Allen .......................................................................................................District 4 Burk Bullington ..............................................................................................District 5 Jean Pence....................................................................................................District 6 J. R. Conley...................................................................................................District 7 Charles Horton .............................................................................................. Attorney
Monthly Board of Directors meetings held fourth Thursday of each month
IF YOUR ELECTRICITY GOES OFF, REPORT THE OUTAGE
We have a 24-hour answering service to take outage reports and dispatch service- men. Any time you have an outage to report in the Hollis or Gould exchange area, call our office at 688-3342. Any other exchange
area call toll free, 1-800-643-7769.
TO REPORT AN OUTAGE, CALL 688-3342 or 1-800-643-7769 ANYTIME
outside investors that may or may not be users of the electric utility they own. Tese companies’ stocks are traded on Wall Street, and those investors demand a return on their investment. Tis drives up the price that their customers pay. Many municipal systems charge rates that generate a “profit” for their cities to help pay for other services. Harmon Electric Association operates on a not-for-profit basis. Of course, we are a business and must generate enough revenue to cover costs (the largest being the purchase of wholesale power). But we don’t have to charge rates to pay outside stockholders. Since our members are our owners, we can provide safe,
reliable and affordable electricity to you. Tat is just another way your co-op brings you value.
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