A large crowd attended the annual meeting of North Arkansas Electric Cooperative (NAEC) June 4 at the fairgrounds in Salem to enjoy the food, entertainment and to take home a few gifts and prizes.
Jerry Estes of NAEC, presented Tina and Jackie Stone of Mountain Home the keys to a retired 2001 Chevy Silverado 4x4 service truck.
CEO Mel Coleman gave an update to members on a year of major events in the area. He also had some good news to tell members about -- a decrease in their monthly bills.
Thanks largely to a decrease in energy prices, NAEC member bills should be down this year an average of 6.87 percent or about $7.12 on the average 1,000 kWh monthly bill, according to a press release from NAEC. The power cost adjustment on member bills is significantly lower than in previous years, which accounts for the decrease. There projections are based on the wholesale price of electric generating fuels like natural gas and coal.
Coleman said, "While the falling trend looks very promising, in today's economic times and considering the volatility of energy prices, the situation could change. But for now, we are extremely pleased our members will get some relief on their electric bills and hope the trend holds on for the long term."
Coleman also said NAEC is in the process of filing necessary documentation with the Federal Emergency Management Agency (FEMA) for damages from January's ice storm. Damages are expected to exceed $30 million and the cooperative is applying for reimbursement of as much as 75 percent of incurred damages through FEMA. The state of Arkansas could then pick up an additional 12.5 percent. Estimates are the cooperative could be responsible for as much as $5 to $8 million of the damages. In addition to the damages listed above, the cooperative experienced lost revenue in the amount of $500,000, he said.
As a non-profit, at-cost organization, recovery of $8 million will be a daunting task, Coleman said. "First and foremost the cooperative is committed to keeping the lights on and the rates down. The Arkansas Public Service Commission has established a mechanism for affected utilities to recover storm damages through rates. NAEC will not be filing for this special recovery of damages," Coleman said. "Most storm damages will eventually be funded through long term debt, which will increase interest costs to members and decrease equity. For those reasons the cooperative has eliminated close to $1 million dollars in its maintenance expense budget and another $1 million from its capital budget. Additionally, for the first time since 1990, the cooperative will not retire patronage this year. Next year, the cooperative expects to return to a normal maintenance expense budget and plans to also consider retiring patronage capital as they have done in the past."
According to Coleman, NAEC has not filed for a retail increase in rates since 2005. Plans prior to the ice storm were to enter into 2010 and consider a small increase effective in 2011. "That would have been six years since the last NAEC rate increase," Coleman said. "However, by absorbing its share of the ice storm costs, the board and management of NAEC have indicated they could be moving that time frame forward. The cooperative will monitor its financial situation and will have a decision by midsummer."
In addition to the expense of the ice storm, several members have been commenting on the debris and material that still resides in the right-of-ways, Coleman said. "The cooperative is currently working through the 4,000 square miles of the system with limited personnel," Coleman said. "NAEC's first priority during the storm was to restore power as quickly and safely as possible; however, with approximately 3,000 broken poles, the cooperative is under a lot of pressure to complete this effort." Coleman said he understands this is burdensome because of its unsightly nature, the fast approaching hay season and summer activities in general. NAEC anticipates the clean-up effort will take most of the year.
"The members of this cooperative have had a very trying past year with tornadoes, floods, hurricanes and ice." Coleman said. "While Mother Nature can be challenging at times, we want to remind our members that our commitment to keeping the lights on has been and will remain the number one goal of this cooperative."
North Arkansas Electric Cooperative serves approximately 36,000 member accounts in six different counties in Northern Arkansas. It is one of 17 electric distribution cooperatives in Arkansas that provides electricity to over 465,000 cooperative members in Arkansas and surrounding states.