Minding your own business

By Michael E.C. Gery

Michael-Gery-2012If you own a business, what do you care about? You care about providing the best goods or services you can provide. You care about what it costs to run the business. You care about what resources you need to maintain the business now and in the future. You care about serving your customers or clients, how well your employees work, how technology can help, how you can benefit your community.

In fact, you do own a business. Along with the other members of your electric cooperative, you own your cooperative.

Beginning this month, Carolina Country will carry a special section each month to help you understand how your cooperative operates in today's business climate. "Between the Lines: Explaining the Business of Your Electric Cooperative" will be a series of direct, no-nonsense, easy-to-understand explanations and observations. The series will supplement similar communications that your co-op has long provided on a regular basis, in this magazine and elsewhere. Communicating so members can understand their co-op is a basic principle of member-owned cooperatives everywhere.

This month we introduce the series on pages 14–15. In the months to come, these pieces will most likely be a single page. The introductory one, "What Goes Up Stays Up" summarizes the reality of the rising cost of doing business in the electric utility industry.

Even though North Carolina's electric cooperatives work closely with one another on many facets of the business, they each operate independently, managed by a board of directors whom you elect. Management at each co-op analyzes what affects the business and responds according to best management practices. The costs of acquiring and delivering electricity in, say, the western mountains are different than those in the foothills, the piedmont and along the coast. So each cooperative manages its costs and resources, and sets its rates, according to how it can best provide your electricity. That's why your rates may be different than those in neighboring co-op service areas and in areas where electricity is provided by investor-owned or city utilities, who also are facing rising costs and raising their rates as some co-ops have done.

The business of providing electricity these days is far different than it was just 30 years ago. In 1982, the average price of a gallon of gasoline in the U.S. was $1.30, whereas today gasoline prices are about 180 percent higher. In 1982, the average cost of a kilowatt-hour of residential electricity in the U.S. was 7 cents, whereas today it's about 11.8 cents, about 68 percent higher. The business of acquiring and making gasoline has changed in 30 years, but not as much as the business has changed for electric cooperatives.

Your co-op is looking at much greater demand for services than it was 30 years ago, or even 10 years ago. We all use more things that need a reliable supply of electrical power — from mobile phones and computers to electric vehicles and new subdivisions. The industry, as always, is planning for future demand. And it costs significantly more to build a new central-station power plant these days than it did just 10 years ago. Plus, the work of finding places to build not only new generating plants, but also new transmission facilities to move the power, is far more difficult. These are some of the reasons your cooperative is serious about developing alternative energy sources, clean and efficient generating systems, and ways for us all to use electricity more efficiently. As they say, the least expensive kilowatt-hour is the one you don't need.

Check out the new section "Between the Lines." And let us know if there's something you'd like to know about how your cooperative operates.

About the Author

Michael E.C. Gery is the editor of Carolina Country.

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