Five years ago, the consolidation of Leavenworth-Jefferson and Kaw Valley Electric Cooperatives was passed by the membership in order to keep rates stable, save money, and continue to provide rural electric cooperative members with the safest, most reliable, and affordable service. So, how has the consolidated FreeState Electric Cooperative scored?
Seven years ago, two sets of trustees came together and unanimously voted to undergo the process to move into a cooperative alliance with the possibility to consolidate because it made sense for not only current members but the future of the electric cooperative. Both cooperatives (LJEC served FreeState’s East District and Kaw Valley Electric Cooperative served FreeState’s West District) were nearly identical in how they provided service. Both cooperatives also made decisions similarly – in a way that put members first – because members were the No. 1 priority.
That has not changed, but there have been other changes in those five years.
When two successful and stable cooperatives came together the trustees wanted to maintain financial stability. A big success of the consolidation has been the achievement of that goal and the overall stability of rates.
Despite periods of lower sales, a global pandemic, and uncertainty FreeState has been able to give money back to our members through margin stabilization adjustments, and capital credits. In the past six years, FreeState has returned $11.6 million to members. $8.8 million of that amount being capital credit retirements, and $2.8 million in margin stabilizations. As a refresher, capital credits are excess margins over the cost of operating that are paid back to members over time because the cooperative is a not-for-profit organization. Why can we give money back? Because we are a cooperative and each payment you make is an investment. Your money is carefully handled by the staff and trustees. We are diligent with your investment and take great care to be responsible with every cent. This means that FreeState is financially stable and ready for the next five years.
Members have also seen no changes to basic services, but what they have seen is an investment in infrastructure and renewable energy. FreeState leads Kansas cooperatives in member-generated solar at just over 2 MW and was also instrumental in the Kansas Cooperative Sun Power Program – a partnership with Today’s Power, Inc., to provide cost-effective solar energy to 12 cooperatives across Kansas. FreeState built two large solar farms near two East District substations equal to 2 MW of power.
In addition to investing in renewables, FreeState was also able to install peak shaving generators at two additional substations in the East District.
FreeState’s commitment to saving money by managing demand reduces the cost of the energy purchased, and that benefits all members of FreeState.
“FreeState has clear financial goals, all projects have a cost-benefit analysis to determine feasibility and payback,” Foss added.
“It’s about financial savings and rate stability,” added Foss.
The cooperative has also taken steps to maintain infrastructure through a construction work plan that has included replacing poles and upgrading conductors on 106 miles of line. Line crews have completed 18 individual projects over 28.5 miles to help improve system reliability.
The size of FreeState also helps when it comes to economies of scale. As we have gone through these five years as FreeState and the previous two years as part of a cooperative alliance, we have been able to take advantage of purchasing larger quantities of inventory and procurement options. We have been able to take advantage of cost-saving efficiencies when it comes to inventory and our fleet. We were able to leverage the McLouth metering system to perform upgrades to our Topeka system that allowed us to move forward with better technology that recognized and diagnosed outages faster. We were also able to add in a full-time, in-house right-of-way crew at our Topeka location to continually work to make our system clear and more reliable.
Commitment to Members
Economies of scale not only help us financially but also provide more people power to serve our members. Our employees are specialized in their fields of expertise. With specialized employees, this allows them the opportunity to become an expert and to share that expertise with not only our members but the utility industry as a whole. Our employees serve state and national organizations that provide them the knowledge, professional development, and education they need in order to better serve FreeState and the communities we serve.
FreeState is member-owned and member-driven. That is a promise we made to our members and one we work hard to keep. In the past five years, we have worked to provide programs and services to help save money, make paying bills more convenient, and provide more information than ever.