Lake Region Electric Cooperative
Cooperatives Build
Cooperatives touch our lives in many ways — there are agricultural, health care, and housing cooperatives. There are also credit unions, farm credit, and mutual insurance companies that operate under the cooperative business model. You may be familiar with farm supply, telecommunication, and fuel cooperatives. Besides being a member-owner of Lake Region Electric Cooperative, chances are you are also a member of or have used the products and services provided by a cooperative. In fact, Minnesota is home to the largest number of cooperatives in the nation, including three Fortune 500 companies and eight of the largest 100 cooperatives in the United States. More than 800 Minnesota-based cooperatives provide services to 3.4 million members who are also the owners of these cooperatives.
Cooperative Month is an annual recognition of the vision and accomplishments of our nation’s more than 29,000 cooperatives. The 2016 observance of October as Cooperative Month highlights a theme of “Co-ops Build” — they build trust, community, opportunity, jobs, a better world, and so much more. You fill in the blank; there are numerous words that could be inserted after this theme.
While cooperatives are involved in such a wide range of business activities and industries, they all share foundations based on the basic seven cooperative principles. Cooperatives are an important force in our nation’s economy. Perhaps the most important point is that cooperatives are engaged in all of these activities because the cooperative focus is always providing products and services that are in the best interests and meet the needs of their member-owners.
Case in point: Electric distribution cooperatives, along with generation and transmission (G&T) cooperatives, are an integral part of the $370 billion U.S. electric utility industry and play a critical role in our nation’s economy and in local communities. More than 12 percent of the nation’s electric meters are served by electric cooperatives. Electric cooperatives own and maintain 2.5 million miles, or 42 percent, of the nation’s electric distribution lines, covering three quarters of the nation’s landmass. Electric cooperatives serve an estimated 42 million people in 47 states.
Convenient Prepay Option, PAY-AS-YOU-GO, Launching this Month
Our investments in metering technology have now made it cost-feasible to offer a prepay billing option.
The customer-friendly prepay option helps members control their electric usage and match it to their household budget. This is the perfect option for those members who prefer to pay for energy as it is used, rather than by a traditional monthly bill. Our Automated Metering Infrastructure (AMI) takes daily and interval kWh readings which allows prorated bill calculation to reduce the member’s credit balance based on the actual metered kWh usage for each day.
Pay-As-You-Go is a great option for members with seasonal homes, renters, or households that want more flexibility in paying their electric bill. The Pay-As-You-Go option is convenient because prepayment can be made by check or credit card at any time through LREC’s secure automated system, available 24 hours a day. The prepay amount and timing of the payment is directly under the member’s control.
The prepay option can also make it easier for members to catch up on a prior delinquent bill by assigning a percentage of the prepaid amount to go toward the prior amount owed.
Pay-As-You-Go is a win-win, with direct benefits accruing to Lake Region members and the cooperative business itself. Key benefits on the utility side are a reduction in disconnect / reconnect trips (with the associated extra expenses and fees) and also less time spent on attempting to collect past due accounts.
Case studies of other utilities that offer a prepay option found increased satisfaction for members enrolled in the program compared to the traditional billing approach. At the same time, the utility benefited from a significant reduction in write-offs, which boosted its overall financial health. In the case of an electric cooperative, that’s a positive result for all member-owners!
Pay-As-You-Go becomes available this October. Lake Region will continue to offer traditional monthly billing, along with several other payment options — pay by mail, by phone, online or with a smart phone using SmartHub, or by automatic monthly deduction from your bank account or credit card.
PAY-AS-YOU-GO—another innovative way that Lake Region is working to serve you!
See our Pay-As-You-Go page for more information.
Cost of Service Study
Since our last newsletter, I’ve had an opportunity to visit with some members and answer their questions regarding the Cost of Service Study currently underway. The study is done as a thorough breakdown and analysis of all expenses and their recovery through our rate structure.
The goal of the study is to determine fair and equitable rates that will support Lake Region’s financial health to the benefit of all member-owners.
At the time of this writing, the study is ongoing. We are planning to use the analysis to finalize plans for 2017 rates within the next month or so. We will keep you informed as this exhaustive process is completed and your local board of directors determines future retail rates.
Tim Thompson, CEO
