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Turning the Page on 2017

Turning the Page on 2017

By Timothy J. Power, CEO

I can’t believe it’s already been a year since I wrote a recap of events for 2016!  From a mild winter to a hot and dry summer (at least for us in Solomon), it was busy as usual.  Here is a short recap of DS&O events in 2017.

Peak Generator – This past summer we leased a second generator to help us shave our peak demand.  We installed the 600 kW unit at our I-135 substation just NW of Salina and ran it in July and early August.  The unit was running when we hit our peaks in July and August.  Combined with our 1 MW peak generator in Solomon, we were able to net a savings of over $200,000 in power costs.

Fort Riley – We found out in late September that our bid to own and operate the electric system at Fort Riley was unsuccessful.  This brought to a close a long process DS&O (and two neighboring cooperatives) has been involved in twice in the past decade.  The winning bidder was a company that already owned and operated three military installations across the country.  And not only did this company win the bid for Fort Riley, it was also awarded contracts to own and operate three additional facilities in the United States.

Safety Demonstrations – Our linemen put on nearly a dozen safety demonstrations this past year all across our service territory.  Using our high voltage demonstration trailer, the linemen have provided demonstrations to schools, fire and police departments, agriculture groups, and more.  If you would like more information on a safety demonstration, please give us a call.

Residential Peak Reduction Pilot Program – This past summer we offered over 1,000 of our residential members the opportunity to participate in a pilot program.  These were members that had electricity usage high enough to justify their inclusion and, more importantly, already had a certain type of meter equipment installed to allow us to remotely disconnect the meter from our office.  Surprisingly, only 22 members participated.

The pilot program did away with the Red Zone in exchange for the members permission to shut off their power for an hour or so on the hottest days, usually between 5:00 and 6:00 PM.  The program’s largest benefit to the participating members was a lower electric rate (compared to the Red Zone rate).  For example, a Rural-Residential participating member paid $.094/kWh instead of the normal Red Zone rate of $.2248/kWh.  In total, this lower rate saved the average participant about $35.00 on their July and August electric bills ($70.00 combined).  The other benefit participating members received was a $5.00 credit each time we shut off their power, which was a total of six times.  Combined, the average savings was about $100.00 for each member!

A follow-up survey with the participants showed that the program was well-received and most, if not all, would like to participate again next year.  And we do plan to offer a similar program next summer.  Stay tuned to our web site, Facebook page, and Kansas Country Living in the months ahead for more details.

Legislation – This past year was also eventful at the statehouse in Topeka.  With budget shortfalls serving as a backdrop, legislation was proposed to eliminate the tax exemption for utility bills.  We fought against this, mainly because the bills required only certain types of utilities to pay the tax (or fee) and others would continue to be exempt.  Ultimately, the bills did not pass, but personal income taxes were raised for everyone.

Another piece of legislation (bill unbundling) was proposed that would have required DS&O to line-item nearly all its charges on its bills.  The supposed purpose was to be transparent, but the real reason was to show our costs for various items/services that we don’t explicitly charge for.  By doing this, large companies with a national and international presence can come in and say they can get that particular item/service cheaper somewhere else.  An example of this is transmission costs.  We don’t explicitly charge for such costs on our bill.  They are included in the charges and rates you pay, as are all costs we incur (garbage collection, water bill, insurance, etc.).  The large companies want us to show what we charge for transmission so they can argue that they can get transmission cheaper from another company.  This would ultimately lead to “retail choice.”  It’s an idea that sounds good, but is not easy to implement and ends up costing a lot of money to reprogram computer systems and manage accounts.  It would also basically force the state regulatory agency (KCC) to regulate all utilities in the state.  Electric cooperatives are rate-regulated by our member-elected board of directors, but that power would likely be taken away since retail choice would require DS&O to charge “wheeling” fees to other utilities that use our lines to sell power.  Another reason we opposed it was because it only targets select services (like electricity).  If electric companies have to be “transparent” on its bills and break everything out, then why not every other good and service you buy?  Why not require water utilities to show all costs for each gallon of water sold?  Why not show the cost to dig the well, lay the pipes, maintain the pipes, insure the pipes, pumping costs, etc.?  Where does this stop?  The only reason this particular unbundling bill was proposed was to further some other interest, i.e. finding lower transmission costs for certain large companies.  Fortunately, the legislation did not pass.  Unfortunately, it may be back next session.

There were many more events that I am not mentioning here, but this summary at least gives you a glimpse of some of what we were working on in 2017.  Next month I will go over our outlook for 2018.

Merry Christmas and Happy New Year from all of us at DS&O!

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