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Click HERE to view video of Alan Wattles, C.E.O., discuss causes of increase
MCEC has finally gotten the information needed from its power supplier, Southern Illinois Power Cooperative, (SIPC), on the amount of rate increases for the next few years. Power costs are going up and for MCEC it is approximately 21% for 2012 and then slightly lower for 2013. What does this mean for you the member/consumer? If MCEC can install the rate increase needed over the next year and be at the rates needed for the lower power cost in 2013, estimates are around 12 – 15%. The current plan is to implement the increase in stages over the 2012 year and when January 1, 2013 is upon us, MCEC will have rates to carry us through for the next few years.
As stated at our past few annual meetings, power costs were going to go up and the time is upon us. SIPC will start receiving power from Prairie State Energy Campus in 2012 and once that occurs, the repayment of debt associated with the building of the plant will take place. The final cost of the plant will be around 480 million dollars and this will be paid over the next 30 years. SIPC will have sufficient generation to cover our needs for the foreseeable future.
How we implement the rate increase is still yet to be determined. We have just received our first run of our Cost of Service study (COS) to look at where we need to have rates to cover our expenses. Once the Board of Directors and staff come to agreement on the COS data, we will start to perform a retail rate study and develop rates that provide enough revenue for our mortgage requirements on our debt and also meet the financial ratios as needed by our lenders. Our goal is to have the information on the new rates by November of this year to be published and to prepare you, the member, for the upcoming increase to your monthly bill.
What are the components of your monthly bill? Basically, a facility charge, energy used and a state tax. The facility charge (FAC) is the component of fixed cost that MCEC needs to run and operate the cooperative on a day-to-day basis. The FAC helps cover most of the cost of salaries, materials, and principal and interest payments for our debt. We don’t recover all of our cost in this line but a majority of it; the rest is captured in our energy charge per kWh sold to you, the member. We are discussing the concept of having our facility charge unbundled on the bill and also to raise it to the amount needed out of the COS. This would mean that the kWh or energy charge would be a flat rate and near the cost of power we are currently purchasing from SIPC. Again, let me state that this is one option we are considering for now. More information will be given when we determine our course of action. Our other option is to have the increase in power costs be spread over both line items, the facility charge and energy charge, and have your bill remain looking relatively the same as always.
MCEC will always strive to contain costs here on the distribution side and to continue to provide quality service and reliable electric to our membership. We see costs from all areas rising with such things as material, fuel, medical and pension costs. We always put great effort into maximizing our dollars that are paid to us by you, the member, to run this cooperative. We are working diligently to run more efficiently and yet, still give you what you want as services from the cooperative.Please keep watching for future updates on the rate increase as we will be using bill stuffers, the MCEC website (www.mcec.org) as well as our Illinois Country Living insert and the Monroe County Echoes for getting you the information you need.
The Power to Pick Electric Service
Several members of Monroe County Electric Co-Operative (MCEC) and other electric cooperatives statewide are receiving telephone calls and letters encouraging them to switch their power generators (not power distributors), promising savings. The message is intended for investor-owned utility customers (Ameren, ComEd and others), not co-op members or municipal utility customers. We are unsure why cooperative members are receiving phone calls and are included in the mailings. MCEC members should disregard the telephone calls and letters.
The Illinois deregulation/customer choice issue was debated nearly a decade ago. Legislation was passed that allows investor-owned utility customers to choose who their power is generated by. It does not change who distributes the electricity to the consumer. Deregulation was driven by and mainly benefited larger industrial loads. In general, the savings for residential consumers and small industrial loads have been dismal or non-existent.
Power generators and the electric utility industry are facing unprecedented levels of risk and uncertainty in today’s environment. Decisions made today could be the wrong decision for the future. Marketers make choice sound wonderful, but the risks for consumers can be high.
The legislation recognized that Cooperatives are different and should have the right to make a local decision on whether or not to enter the deregulated market. A few did. Most Cooperatives have not. Locally elected co-op board members can always decide to enter the deregulated market if circumstances change and it would benefit the co-op membership.
Illinois Electric Cooperatives To Purchase 40 MW of Wind Power
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For a Copy of the Press Release Click Here.FOR IMMEDIATE RELEASE
Friday, June 24, 2011PAXTON – Today, three generation and transmission (G&T) cooperatives, serving 21 Illinois electric cooperatives and their 540,000 members, announced that they will be purchasing 40 megawatts of wind energy from the Pioneer Trail Wind Farm.
The wind farm is being developed east of Paxton, Ill. The three member-owned G&Ts, Prairie Power, Inc., Southern Illinois Power Cooperative and Wabash Valley Power Association are entering into an 18-year power purchase agreement with Pioneer Trail Wind Farm, LLC, an affiliate of E.ON Climate & Renewables North America (EC&RNA). The agreement was coordinated through the National Renewables Cooperative Organization, which was formed to promote and facilitate the development of economically viable renewable energy resources for its member cooperatives across the United States.
Duane Noland, president/CEO of the Association of Illinois Electric Cooperatives, said the purchase agreement illustrates the ongoing effort of Illinois electric co-ops to provide affordable and reliable energy to electric co-op members, and support innovative energy efficiency and clean renewable energy projects such as the Pioneer Trail Wind Farm. Noland said the agreement also helps the 21 electric distribution co-ops across the state that receive wholesale power from the three G&Ts by keeping rates affordable and diversifying the power supply. “Cooperatives also live by a principle of commitment to community and we know that this project will produce not only affordable energy, but also jobs and new revenue for the area.”
“Our Pioneer Trail Wind Farm is expected to provide clean power to approximately 45,000 households in the central Illinois region using North American made turbines, blades and towers,” said Steve Trenholm, CEO, EC&RNA. “Locally, this project projects to spend more than $29 million dollars in local taxes, paying $8 million in local salaries and more than $50 million to landowners. We expect to employ about 200 people during construction and also expect to establish 8 to 10 permanent positions for the life of the wind farm.”
David Champion, Jr., president/CEO of Eastern Illini Electric Cooperative headquartered in Paxton, said that this purchase agreement demonstrates that the Illinois electric co-ops are not only working to keep bills affordable through innovative energy efficiency programs, but also looking for affordable power supply options. Champion said, “Our power supplier, Prairie Power Inc, has been searching for commercially available, viable, renewable projects as a potential resource for some time. They had found that most of the alternatives were priced higher than our current and projected cost of power. By remaining diligent in the search, they found a project that is both good for the environment and cost effective for our members. Our participation in this project is made possible by the competitive pricing in this new contract.”
Jay Bartlett, president/CEO of Prairie Power, said the state’s cooperatives have taken a conservative but long term approach to renewable energy. He said, “The cooperatives are purchasing both the energy and renewable energy credits (RECs) produced by this project over a long period of time. This provides renewable energy system developers like E.ON with a steady source of revenue to finance the construction of additional renewable energy projects in Illinois. We believe this is very good for our co-op members, the environment, and wind energy development in Illinois. We are looking for cost effective projects, like the Pioneer Trail Wind Farm, that ensure positive long term environmental and economic benefits, and assist us in maintaining affordable and stable rates.”
Scott Ramsey, president/CEO of Southern Illinois Power Cooperative, said the G&T was one of the founding members of the National Renewables Cooperative Organization and has been looking for several years for the right partner and the right renewable energy contract. “E.ON is a solid and reputable company that has global wind energy development and operational experience. They were in a position to offer us a competitively priced renewable energy contract. After doing the necessary due diligence we determined that now is the time and this is the contract that we have been looking for.”
###About the Association of Illinois Electric Cooperatives
Based in Springfield, the AIEC provides legal, engineering, communications, safety training, legislative and other services to 25 electric distribution cooperatives and four generation and transmission cooperatives. AIEC member cooperatives serve more than 279,334 farms, homes and businesses in 90 counties, with 55,592 miles of line. Contact: Duane Noland, 217-529-5561, dnoland@aiec.coop. www.aiec.coopAbout Eastern Illini Electric Cooperative
Eastern Illini Electric Cooperative is a member-owned rural electric cooperative based in Paxton, Ill. that supplies electricity to approximately 13,731 meters over 4,522 miles of line in parts of Champaign, Douglas, Edgar, Ford, Iroquois, Livingston, McLain, Moultrie, Piatt and Vermilion Counties. Eastern Illini Electric is a member of Touchstone Energy®— an alliance of more than 720 local, consumer-owned electric utilities around the country.
Contact: Mike Wilson, 217-379-2131, mikew@eiec.coop. www.eiec.coopAbout Prairie Power, Inc.
Prairie Power, Inc. (PPI) is a member-owned, not-for-profit electric generation and transmission cooperative, which produces and supplies wholesale electricity to 10 electric distribution cooperatives in central Illinois. PPI’s distribution cooperatives provide retail electric service to approximately 78,000 homes, farms, businesses and industries within their local service territories.
Contact Jay Bartlett, 217-245-6161, jbartlett@ppi.coop. www.ppi.coopAbout Southern Illinois Power Cooperative
Southern Illinois Power Cooperative (SIPC) is a member-owned, not-for-profit electric generation and transmission cooperative serving seven distribution cooperatives and two municipals in southern Illinois. SIPC’s distribution cooperatives provide retail electric service to approximately 82,000 homes, farms, businesses and industries in 29 counties.
Contact: Scott Ramsey, 618-964-1448, sramsey@sipower.org, www.sipower.orgAbout Wabash Valley Power Association
Wabash Valley Power Association (WVPA) is a generation and transmission (G&T) cooperative based in Indianapolis. The G&T provides wholesale electricity to 28 distribution systems in Indiana, Illinois, Michigan, Missouri and Ohio. Collectively, these distribution cooperatives supply electricity to more than 380,000 homes, farms, businesses and industries.
Contact: Sabrina Kapp, 317-481-2800, sabrinak@wvpa.com, www.wvpa.comAbout the National Renewables Cooperative Organization
Cooperatives across the country formed the National Renewables Cooperative Organization (NRCO) to promote and facilitate the development of renewable energy resources for its members. NRCO’s main purposes are to facilitate the cost-effective, joint development of renewable resources nationwide for its cooperative owners.
Contact: Katie Shults, 317-344-7906, katie.shults@nrco.coop, www.nrco.coop.About EC&R
E.ON Climate & Renewables (EC&R) is responsible for the E.ON group’s renewable energy and environmental protection activities around the world. Tapping renewable energy sources offers enormous alternatives, both from a business perspective and for the environment. E.ON Climate & Renewables will be investing €4 billion in renewable energy and environmental protection projects from 2010 - 2013 to expand the share of renewable energy in E.ON’s portfolio for the long term. E.ON has thus taken a leading role in developing renewable energy sources worldwide.E.ON Climate & Renewables North America is one of EC&R’s six regional business units and is headquartered in Chicago, Ill. E.ON AG is one of the world’s largest energy companies and the largest investor owned utility in the world. For more information, please visit www.eon.com/renewables.
Contact: Matt Tulis, 512-482-4026, www.eoncrna.com.
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We are making these devices available to our membership so that they can monitor power consumption on any 120V appliance. For more information contact Allan Masterson at mcec@htc.net or 939-7171.
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