Power to the people

June 14, 2006

Are you shocked by the rollercoaster price of gasoline?
Aren’t you glad your electric bill doesn’t change so dramatically for no apparent reason at all?
When you think about it, electricity is probably at least as important to our day-to-day living as gasoline. Maybe even more important.
Try going a couple of hours at home or work without electricity. I doubt that you’ll enjoy the experience. Sure, you could probably live without the TV, at least for a couple of hours. But what about your refrigerator? The lights? How many other gadgets in your home require electricity to operate?
Expanding on this, how would our schools, hospitals and government services operate if electricity weren’t affordable and reliable? One of the greatest modern marvels, the internet, wouldn’t be possible without reliable and affordable electricity.
In Northern Michigan, there are over 200,000 of us who get our electricity from a member-owned electric cooperative. In the Traverse City area, chances are you get your electricity from either Cherryland Electric or Great Lakes Energy.
Both of these organizations are different from most nameless corporate utilities. The beauty of this type of organization is that the “owners” of the utility are the customers, working to serve the needs of the community – not investors on Wall Street.
Each year, the cooperative “owners” elect a board of directors. The cooperative board fulfills an important role – making sure that the cooperative serves the “owners” in the community. The board of directors acts very much like our local school boards or county commissioners. It oversees the delivery of an essential service to our community – electricity.
The board of directors is responsible to make sure that electric rates are fairly set, services are reliable, and that any special needs are met in an equitable fashion. It makes sure that the management of the cooperative is focused on serving the needs of the “owners.”
For most of us in Northern Michigan, we have no choice when it comes to where we get our electric service. If we don’t like our natural gas or telephone services, most of us have alternatives. However, if we don’t like the electric service we’re getting from our electric cooperative, we’re stuck.
This is why it is so important for the “owners” of an electric cooperative to participate in the oversight of their electric utility. The best and easiest way to do this is to vote in your annual board of directors election.
Beyond just getting the cost and service levels right, the board decides how to invest the “owners’” money. Big commitments of “owner” money are required to secure future electric power supplies. Right now, the Cherryland Board of Directors is contemplating very large financial commitments that will drive electricity rates for cooperative “owners” for the next 30 years or longer.
The last time the Cherryland Board of Directors was faced with major supply decisions like this it invested in nuclear power. That investment failed miserably and ended up costing cooperative “owners” well over $150 million dollars over 10 years. Ouch!
The board of directors also can invest the “owners’” money in non-utility activities. At Cherryland, the board invested over $4 million in a cellular telephone business, an internet service provider and alternative heating and cooling ventures. Virtually all of this “owner” money was lost and written off. Ouch!
Getting back to the core mission of the electric cooperative, did you know that residential electric cooperative “owners” in Northern Michigan pay the highest rates for electricity in Michigan? If you have a neighbor who is served by either Traverse City Light & Power or Consumers Energy, compare your electric bills. You’ll notice quite a difference in the cost of electricity. Ouch!
To add insult to injury, did you know that your cooperative board members compensate themselves far more than other cooperatives? Compared to national averages, Northern Michigan directors reward themselves much more than other cooperative Boards around the county. Ouch! (Source data from 2004)
Some board members even voted themselves a special deferred compensation scheme that will reward them for years, even after they are no longer members of the board. Ouch!
Yes, just as in private industry (think of Enron or WorldCom), when an organization’s board isn’t doing its job, the “owners” pay the price.
Sadly, at Cherryland, only about 2% of the “owners” get involved in the election of their board of directors. At Great Lakes Energy, the turnout is even lower. Think about how well our school boards or county commissions would run if only 1% of the “owners” came out to elect leaders. Almost certainly things would be run by a small group of “insiders” who cannot be relied upon to represent the needs of the “owners.” Ouch!
Are you interested in “green power”? Do you want to see your local utility improve service? Do you think that regional power supply solutions could benefit our region? As an “owner” of your local electric cooperative, you can get involved to promote your interests. You can start by voting in your cooperative board of directors elections each year.
Cherryland Electric’s election will be held this year on Thursday, June 15 at 5:30 p.m. at the “owners’” offices in Grawn. Along with having a chance to meet the great folks who work at Cherryland, you’ll be served a nice BBQ dinner. You can meet the board candidates at the meeting and let them know what you want to see happen at your cooperative.
You can also vote by mail-in ballot. Ballots have been distributed in the May edition of Country Lines, the monthly magazine sent to all cooperative “owners.”
For more information on your cooperative, call Cherryland Electric at 231.486.9200 or Great Lakes Energy at 1.888.485.2537.
Think about how important electricity is in your life. Please take a minute to get involved. It’s your cooperative and you don’t want to be shocked!

A resident of Solon Township, John Murray is running for a seat on the Cherryland Electric Board of Directors.