The Enlightener
March 2002
Wholesale Power Costs, Transmission Needs Lead to Increases
Increasing wholesale power costs from our power supplier, North Carolina Electric Membership Corporation, (NCEMC), have made it necessary to increase the wholesale power cost adjustment (WPCA) charge listed on members’ monthly bills.
This charge will go directly to recover over $4 million in cost increases for wholesale power the cooperative will purchase from NCEMC this year to distribute to members. For an average residential household using 800 kilowatt hours each month, this means a monthly WPCA charge of an estimated $5, beginning with bills printed in April.
The WPCA charge was implemented last fall, when Blue Ridge Electric learned that NCEMC would increase the cooperative’s wholesale power costs. WPCA charges have risen over the past few months as information from NCEMC indicated these costs would be significantly higher than first projected.
Blue Ridge Electric is one of 26 electric cooperatives in the state who come under the NCEMC umbrella for joint power purchases.
While deregulation of the wholesale power marketplace led to some decreases in wholesale power prices in the late 1990s, these prices are now beginning to increase. Member cooperatives began feeling the effect last year as NCEMC renegotiated long-term power contracts. The new contracts came in at higher prices than the ones they replaced, even though NCEMC got the best available prices in the wholesale power market at that time.
Transmission Needs for Power Reliability
At the same time Blue Ridge Electric is facing rising power cost pressures, the cooperative also must fund nearly $40 million over the next five years in transmission and system reliability improvements. The annual cost increase needed from members to cover these investments is $1.5 million. These improvements are necessary to continue meeting growth and reliability needs of the cooperative’s nearly 64,000 consumers.
A cost of services study has indicated that the cooperative must implement the first rate adjustment in nine years in order to pay for these investments.
Beginning with bills printed after April 9, the increase will show up in the monthly service charge, which will go from $9.55 to $12.50 for residential accounts. For the average residential member, that is about a four percent increase on their total bill.
Blue Ridge Taking Cost Control Measures
None of us likes to see energy costs increase, and you can be assured that we are working hard to contain costs for your cooperative. We look for ways to operate more efficiently before we make any changes to the rates. For example, we are making budget cuts this year in areas where purchases can be delayed or eliminated without affecting the reliability of your electricity or quality of customer service.
As a not-for-profit cooperative, we all share in the cost of operating our utility—which is more expensive in a rural, mountainous area with fewer customers per mile of line than a utility serving a more populated area.
One of the benefits of electric cooperatives is that we can also share the good times with members when economic conditions are favorable. For example, over the past eight years, Blue Ridge Electric has refunded $3.5 million to members in the form of a special adjustment on electric service bills when energy costs decreased in the late 1990's. And over the past decade, the cooperative returned nearly $9 million to members in the form of capital credits. These come from operating margins left over after all necessary maintenance and obligations are covered.
Our first priority is to provide the members of this cooperative with the most reliable and affordable electricity possible. We remain committed to this mission and we appreciate your understanding and support.
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Members Only News
-For Members of Blue Ridge Electric
New Officers Elected
The Board of Directors of Blue Ridge Electric Membership Corporation has announced newly elected officers of the Board. An election of new officers was necessary after the death of Johnnie Austin, who had served as president for 21 of his 31 years on the cooperative’s Board of Directors.
Elected as the new president was John Woodruff of Alleghany District, who has served on the Board since 1968 and formerly served as vice president.
Kenneth Greene of Ashe District, was elected vice president. Greene, former secretary-treasurer, has been a Board member since 1988. G.C. Norris, of Watauga District, was elected secretary-treasurer. On the board since 1981, Norris formerly served as assistant secretary-treasurer. Jeff Joines, of Caldwell District and a board member since 1998, was elected assistant Secretary-treasurer.
The Board has also selected an ad hoc committee to appoint a Watauga District director to fill Johnnie Austin’s term, which expires at the cooperative’s 2004 Annual Membership Meeting. The new director will join Watauga District directors G.C. Norris and Joy Coffey.
For more information on director elections or appointments, contact Beverly Finney, Senior Vice President, Public and Employee Relations.
Mark your calendar and make plans to attend the 2002 Annual Membership Meeting scheduled for June 8
At Watauga High School
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The Perspective
An Editorial by Chief Executive Officer Doug Johnson
Cooperative Legacy: Johnnie Austin
Throughout my lifetime, I’ve had a number of friends and business associates who have had a positive influence on me. Some impacted my life in small ways and others in quite significant ways. With the recent loss of Johnnie Austin, I lost a friend who was at the top of my list of people whom I cared deeply about and whom I knew cared deeply about me.
When Johnnie unexpectedly passed away January 19, Blue Ridge Electric lost one of the most notable presidents in the history of our cooperative.
Serving on our board of directors for 31 years, Johnnie led with integrity and strength. He was also a compassionate individual who left his imprint in the hearts of all who knew him. As I’ve reflected over the past few weeks about Johnnie’s life and his friendship with me, I realize there is a void in my life where he once stood. I’ve also decided the best way to fill this void and pay tribute to my friend is to live out the values and principles that caused Johnnie and me to have such a strong bond of friendship.
While there are many attributes that I could share about Johnnie, there are a few that best capture his personality. He was an incredible “people person” and caregiver, and he invested a lot of time helping people when they needed him. He also loved Blue Ridge Electric and the cooperative way of doing business. His love of people made his role at Blue Ridge Electric a natural fit for what he wanted to accomplish with his life.
Johnnie was an ideal cooperative board president. He fully understood his role as president of a member-elected board. He worked to benefit the members and do what was best for our communities. He was engaging but not overbearing, informed but appropriately trusting of delegation to management. He was a studied leader but always open to suggestions. He inspired us all to aim high and accomplish goals to benefit our members.
As we look forward and welcome a new, equally capable president, I want to take this opportunity to say I’m thankful I had the opportunity to work so closely with Johnnie Austin. The impact he had on me and on this cooperative is immeasurable and his work will benefit the members of Blue Ridge Electric forever.
Published monthly by Blue Ridge Electric Membership Corporation for its 51,455 members.
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