Montana cooperatives team up to deliver better
service
 |
| Lineman Mike Wesely introduces a future
lineman to the tools of the trade at a safety fair Valley
Electric Cooperative sponsored. Although the two utilities
have no plans to do so at present, retirements may cause
Valley and Northern Electric Cooperative to merge by the
time this young member is ready to go to work. (Photo courtesy
of Valley Electric Cooperative) |
The Hollywood image of the rugged loner notwithstanding,
most big jobs, from taming a frontier to providing reliable
electricity, are easier to handle with a partner riding shotgun,
as the tale of two electric cooperatives in northeastern Montana
demonstrates.
Although Northern Electric Cooperative and Valley
Electric Cooperative have distinct characters, the utilities
share many similarities: both get their power from Western customer
Central Montana Electric Power
Cooperative; they share the same union contract and, since
2000, the same general manager. “We also have the same
attorney, auditor, outside contractor and lenders,” Joint
Manager Larry Tade pointed
out. “Valley and Northern have so much in common that
it just makes sense to work together to save money and effort.”
Teamwork offers big advantage to small
utilities
Small co-ops, in particular, have to look
for ways to conserve human and capital resources. Northern Electric
has 10 employees, 860 members and 1,200 meters, while Valley
serves 1,290 members and 1,850 meters with only nine employees.
Any plan that eliminates duplicated effort is good business
for both utilities. New technologies that allow employees to
work electronically from either office has made working together
even easier, “and cut down on a lot of paperwork,”
Tade observed.
Repair and maintenance equipment is a big
investment for any co-op, so equipment sharing has proven to
be a tremendous benefit of cooperation. For example, Northern
has an excellent underground fault locator for finding breaks
in underground electric cable. When Valley has an underground
fault, Northern sends its crew and locator to the site and quickly
finds the problem. “It’s a lot easier than having
to go it alone,” said the general manager. “Of course,
we keep track of what is being used where and cost that out
appropriately to each co-op.”
With adjacent service areas that cover a
total of 7,600 square miles, sharing vehicles and travel expenses
can be almost as significant as sharing service agreements,
personnel and equipment. The co-ops belong to many of the same
organizations, such as the Montana
Electric Cooperatives Association, and Tade often represents
both co-ops at out-of-town meetings. Trustees from both co-ops
also attend meetings together, cutting down on travel costs.
Heavy residential users and oil wells
maintain Northern’s load
Controlling operating costs is an ongoing
concern for Northern and Valley, since like so many RECs, they
serve towns and counties with shrinking populations. Farms and
ranches make up the bulk of Northern’s membership, with
80 oil wells adding a substantial commercial load. “Some
of those wells use up to 100,000 kW per month,” said Tade.
“They definitely help us to keep afloat.”
Use-per-member is also high in Northern’s
territory, averaging about 1,300 kW per month. “That’s
because the only choices out here are propane and electric,”
Tade noted. “Just about everything the farmers and ranchers
have is all-electric.”
Northern’s load may get a big boost
if the utility gets to supply power to the new intake facility
for a huge water project now under construction in northeastern
Montana. But small business is just as important to the co-op
and the community. The Lefse Shack, manufacturer of a popular
potato pancake in Opheim, Mont., was at risk of moving to Minnesota
when the owners decided to retire a few years ago. Rather than
let the jobs leave the area, Northern bought the company’s
stock. “It employs about 15 people, mostly farm wives,
for nine months a year and puts $100,000 back into the community,”
said Tade.
It’s not a huge corporation, he admitted,
but in an almost entirely rural community, that revenue makes
a big difference.
Valley looks to seasonal cabins and fish
hatchery for load growth
Valley’s membership is more diverse
than Northern’s, with a slightly different outlook, according
to Tade. “It’s like there is a magic line dividing
the two territories. To the north, people are a little more
traditional; to the south, they’re a little more progressive
and interested in new ventures to raise revenue.”
A ranch and feedlot combination is the
co-op’s biggest load right now, but vacation cabins around
Ft. Peck Lake are helping to maintain the residential base.
A 14-lot development recently filled up and another 80-lot site
is steadily selling out. A new warm-water fish hatchery being
built near Ft. Peck will add a load about half the size of Valley’s
total present load when it opens in 2005.
The tiny town of Ft. Peck itself has an
unusual relationship with Valley. The town once had a municipal
utility that bought power from Western. In 1990, Valley bought
Ft. Peck’s electric system and took over its operation.
The Western allocation transferred to the co-op as part of the
deal. “We picked up 125 meters and were able to give our
members a break on their rates,” Tate said. “We
really appreciate having that Western power.”
Having gained so much from working together,
it would seem to be a natural next step for Northern and Valley
to merge, but Tade doesn’t see that happening—not
yet, anyway. “Future retirements may drive a merger eventually,”
he said, “but the economics are not quite enticing enough
at this point.”
There are also some political advantages
to remaining independent. “Two voices have more clout
than one,” Tade acknowledged.
So, the two co-ops maintain separate boards,
separate memberships in industry organizations and separate
identities. Like old saddle pals, they go their own way. But
if one needs help, the other will be there to lend a hand, because
that’s really how the West was won.
