The Enlightener

December 2002

Capital Credits Retired

Capital credits are one of the many benefits of being served by an electric cooperative like Blue Ridge Electric. As a not-for-profit business, cooperatives return to their member-owners any money left over at the end of the year after all the cooperative’s bills have been paid.

This year Blue Ridge Electric is retiring nearly $1,100,000 in capital credits to members, with $434,886 of that amount coming to members during the December billing cycles. The amount retired includes $665,114 in capital credits the cooperative has already paid throughout the year to estates of members who passed away.

This retirement represents approximately 31 percent of the cooperative’s margins from 2001. Capital credits, also known as operating margins, accumulate over time. All the funds aren’t immediately retired because they’re used to finance necessary maintenance, improvements, and additions to the electric system. This allows your cooperative to operate more efficiently for its members by avoiding paying interest on loans, which would otherwise be needed. Any loan interest must be factored into the member’s rate schedule, so this practice helps keep electric rates down.

Your portion of the capital credits retirement is based on your length of membership and usage. Members due a capital credit retirement of less than $15 will receive a credit listed on their December bill. If the amount is $15 or more, you will receive a check mailed separately from your December electric bill.

Please Note: When a member dies, the administrator of the estate should inform Blue Ridge Electric in order to claim the balance of the member's capital credits account. The administrator must present the cooperative with a death certificate as well as complete necessary paperwork, and Blue Ridge Electric can then issue a capital credits check to the estate. Members should also inform the cooperative if their address changes.

Members Only News
-For Members of Blue Ridge Electric

Wholesale Power Cost Adjustment to Increase

Beginning in January, members will see a slight increase on their bills under the line item titled “Wholesale Power Cost ADJ.” This line item reflects each member’s portion of the increase in wholesale power costs which your cooperative is incurring from its wholesale power provider North Carolina Electric Membership Corporation (NCEMC).

Residential members will see their wholesale power cost adjustment increase from $6.25 per 1,000 kilowatt hours (kWh) used, to $6.40 per 1,000 kWh. The average residential member uses approximately 800 kilowatt hours of electricity monthly. Members who have accounts other than residential will receive separate notification of their change in wholesale power cost adjustment.

Blue Ridge is experiencing more than a 15 percent cost increase – or $7 million – for wholesale power from NCEMC, the supplier to the state’s electric co-ops. The increase is primarily a result of a wholesale rate restructuring plan implemented by NCEMC in 2001.

The restructuring was a result of the nation’s deregulation of the wholesale side of the power business. The new rate structure increased the price of wholesale power for winter-peaking systems like Blue Ridge Electric that utilize more electricity in the winter months.

Prior to deregulation, more favorable rates were given to winter-peaking systems because they equalized the annual demand for power in our summer-peaking market, but that is not a benefit recognized under deregulation.

In addition to cutting costs wherever possible without sacrificing customer service or power reliability, Blue Ridge Electric is in the process of conducting an in-depth study of ways to reduce wholesale power costs.

Photo_CEO Johnson The Perspective

An Editorial by Chief Executive Officer Doug Johnson
Blue Ridge Energies

As a member-owner of Blue Ridge Electric, you also are an owner of its subsidiary, Blue Ridge Energies, a provider of propane, heating fuels, hearth products and commercial gasoline. For this reason, I believe it’s important to give periodic updates on Blue Ridge Energies.

With the onset of winter, we are very busy at Blue Ridge Energies. This is especially true after experiencing a 42 percent increase in propane customers served during 2002. As of September 30, 2002, our energies subsidiary is serving a total of nearly 11,000 customers in Caldwell, Watauga, Ashe, Catawba, and Alleghany counties.

One of Blue Ridge Energies’ accomplishments of which I’m most proud is our high customer satisfaction rating. Serving people is the heart of our business, so I’m pleased customers rated us a 9.44 on a ten-point scale. This is a phenomenal rating for the fuels industry, but it’s exactly what you’d expect from a cooperatively-owned business.

In striving to meet customer needs, Blue Ridge Energies recently implemented new programs this year such as budget billing, which lets customers spread their fuel costs evenly over the year. Also implemented was “Refer A Friend,” a limited-time program that gives Blue Ridge Energies customers a $50 credit when they lead a new customer to the subsidiary.

While the fuels industry has experienced a challenging business environment, due in part to mild winter weather and economic conditions for several years, we are now seeing signs of improvement for the industry and the future looks bright for Blue Ridge Energies. We have made great strides in the past year and are looking forward to a strong financial performance in 2003.

For more information on your subsidiary, you can visit www.BlueRidgeEnergies.com or contact us at 1-800-451-5474. Many of you have asked us for fuel services and we hope you are utilizing Blue Ridge Energies. After all, as a member of Blue Ridge Electric, you have the extra benefit of doing business with your own company when you use Blue Ridge Energies.

Downed Power Lines Could be Deadly!

Power lines that have been damaged or brought down by high winds, ice, snow, or falling trees can still be energized – which means contact with them could be deadly or produce a serious injury.

If you see a downed power line, stay away! Contact Blue Ridge Electric immediately, and if possible, have someone warn others to stay away from the downed lines. A call to Blue Ridge Electric will help expedite repair of the line, restore any lost power, and help ensure safety.

How to Report an Outage

PowerLine is your automated outage and account information connection. Call 1-800-448-2383 to use PowerLine any time, day or night. Or you can call your local Blue Ridge Electric district office.

Published monthly by Blue Ridge Electric Membership Corporation for its 51,988 members.

Statement of Nondiscrimination

Blue Ridge Electric Membership Corporation is the recipient of Federal financial assistance from the Rural Utilities Service, an agency of the U. S. Department of Agriculture, and is subject to the provisions of Title VI of the Civil Rights Act of 1964, as amended, Section 504 of the Rehabilitation Act of 1973, as amended, the Age Discrimination Act of 1975, as amended, and the rules and regulations of the U. S. Department of Agriculture which provide that no person in the United States on the basis of race, religion, color, national origin, age, sex, or disability shall be excluded from participation in, admission or access to, denied the benefits of, or otherwise be subjected to discrimination under any of this organization’s programs or activities.

The person responsible for coordinating this organization’s nondiscrimination compliance efforts is Charles W. Troutman, Director of Employee Development. Any individual, or specific class of individuals, who feels that this organization has subjected them to discrimination may obtain further information about the statutes and regulations listed above from and/or file a written complaint with this organization; or the Secretary, U. S. Department of Agriculture, Washington, D. C. 20250; or the Administrator, Rural Utilities Service, Washington, D. C. 20250. Complaints must be filed within 180 days after the alleged discrimination. Confidentiality will be maintained to the extent possible.