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October 2020
Important Notice
FreeState will be holding a special open board meeting where trustees will vote on a proposed electric service charge on Wednesday, October 28.

The process begins with open commenting available to members starting Oct. 1. All comments received by Oct. 23 will be gathered and presented to board members.
Hello!
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Your Voice Matters. Give Your Input.

The Board of Trustees will vote on the proposed electric service charge adjustment in front of them.

FreeState trustees have a proposed electric service charge adjustment in front of them.

The trustees understand that there is never a good time to make adjustments, but the pandemic puts things into perspective. We modified and adapted. We kept the lights on. We rode a wave of reduced revenue, we absorbed costs when revenue steeply fell as our neighbors were out of work and businesses closed their doors. We have begun to bounce back and we hope better days continue.

We’ve been talking about this adjustment since March, and then the pandemic took over, and any talk of adjustments took a back seat to respond to members and keeping employees safe. 
 
But other factors have been outside of FreeState’s control. The most significant of those factors is basic operating expenses. Costs that have increased are environmental regulation costs, property taxes, materials, labor and transportation.

The co-op has absorbed these costs to take the burden off our members for the past four years. We’ve delayed or diverted cost of service studies or other costly changes. However, it has come to the point where it will be difficult to continue to absorb these costs. We need to be more proactive, especially when weather patterns have slowed sales, margins have slimmed, and costs continue to rise.

The trustees have decided that the time to be proactive is now. We are proposing a small incremental adjustment rather than a more significant alteration later. We understand it may not be the best time, but we also know slight modifications will be better for our members.

There will be a time for member comments, feedback and input. So that all members have the opportunity to participate in this process, we will live broadcast the Oct. 28 special meeting where the board will take action on the proposal.

The adjustment will go into effect on the February 2021 billing statement. Members will see a $3 adjustment each month in 2021. A $1 adjustment per month is also proposed for 2022, 2023 and 2024. The proposed adjustment of $6 over the next four years is across the board and equal for all rates on FreeState’s system.

We invite and encourage all of our members to provide feedback.

To make comments, please visit www.freestate.coop/adjustment where you will find an online form to provide input and other information about the proposed adjustment. The board will review all feedback before the vote, which will take place on Oct. 28.




“One thing we do want to point out is that there have been no changes since consolidation, and that’s all due to the realized savings of bringing two stable cooperatives together,”

“For FreeState to maintain the quality, reliability, and stability of the services we provide, we must take a comprehensive look at our revenue requirements and 10-year financial forecast. Our revenue requirement study (RRS) provided a comprehensive road map for the board and management.”

-Jill Taggart
Finance Manager
Members will see the first adjustment on the February 2021 bill. The adjustment will be $3 each month or $36 per year. In February 2022, 2023, and 2024 an adjustment of $1 will be made.
Board Will Vote On Adjustment

Trustees will vote on a proposed $3 per month adjustment starting in January 2021 on Oct. 28 during special open board meeting. Members have a chance to provide input on decision.

For the past decade, members have not seen any adjustment to service charges. The last adjustments were in 2010 (East District, previously LJEC) and 2012 (West District, previously Kaw Valley). They key to consistency was the consolidation in 2017. True dollar savings paired with avoided costs put the cooperative on the right track, but revenue has been on the decline and expenses keep rising. A trend that is not changing.

“The cooperative’s operating costs increased by 10% from 2015 to 2019,” said Jill Taggart, FreeState’s finance manager. “A very mild 2020 means the co-op’s revenue energy sales has fallen 5% below our projections and this put added pressure on our finances as operating costs continue to rise because those operating margins shrink when sales are down.”

Not only have costs risen and temperatures evened, growth has stalled overall as an economic downturn has begun.

“We connected 242 new services in 2018 compared to just 160 in 2019,” said Steve Foss, FreeState’s CEO. “Slow growth paired with advanced technology has driven efficiencies across the territory resulting in lower revenue. We expect this trend to continue.

Foss added that energy efficiencies are a positive for members, but when it can make an impact to the co-op’s bottom line.

“It’s not only energy efficiencies,” Foss said. “FreeState leads Kansas cooperatives when it comes to member-generated power.”

“It’s something we’re happy about, and something we’ll continue to invest in to keep costs down for our members, but when we do these types of investments something gives on the other side,” added Foss. “We currently have just shy of 1.4 megawatts installed by our members.”

Foss says no changes in a decade is significant when compared to the investor owned utility that has raised rates 39 times during the same decade.  

Consolidation savings have allowed the cooperative to absorb most of the increases.

“One thing we do want to point out is that there have been no changes since consolidation, and that’s all due to the realized savings of bringing two stable cooperatives together,” added Taggart.

“For FreeState to maintain the quality, reliability, and stability of the services we provide, we must take a comprehensive look at our revenue requirements and 10-year financial forecast,” Taggart said. “Our revenue requirement study (RRS) provided a comprehensive road map for management and the board.”

Members can forget that FreeState does not make a profit and there are no shareholders.

 “We return any overages to members in the form of capital credits,” said Foss.

Since 2017, FreeState has returned over $1.5 million in capital credits and also returned $900,000 in margin stabilization to our East District members, including a consolidation credit of $800,000. However, 2020 saw capital credits delayed as a proactive measure.

“We want to make certain we are in a financial spot to retire those credits and we hope we are able to do that, but the pandemic proved otherwise,” Foss said.

“More than 80% of the cooperative’s expenses are not controlled by the cooperative,” Foss said. “We do not control the cost of environmental regulations, property taxes, materials, labor and transportation, the list of costs is lengthy.”


The Small Adjustment Will Be Adequate
Trustees were given a suggested service charge amount near $40 10 years ago but made the decision to keep the charge lower.

“We aren’t even close to that suggested amount,” said Foss.

Members will see the first adjustment on the February 2021 bill. The adjustment will be $3 each month or $36 per year. In February 2022, 2023, and 2024 an adjustment of $1 will be made.

“Even with a minimal adjustment we will still be well below the previously suggested amount and we intend to keep it there as long as possible,” added Foss.

Members Can Provide Feedback
Trustees will vote in a special open board meeting on Wednesday, Oct. 28.

The meeting will be held both in-person (McLouth warehouse due to COVID-19 restrictions) and virtually to offer a safe alternative for participating. The cooperative will also be giving members the opportunity to provide feedback from Oct. 1 through 23.

“We are streaming our meeting on our website, and there is a form there where members can provide feedback directly to us,” Foss said. “All comments will be delivered for the board to review before they take action on the proposed adjustment.”

“The board will be provided comments collected,” Foss added “We want our members to engage and be part of the process.”
How To Provide Feedback
All information regarding the adjustment, including the live broadcast of the special board meeting will be streamed at www.freestate.coop/adjustment.

The meeting will be held both in-person (McLouth warehouse due to COVID-19 restrictions) and virtually to offer a safe alternative to participate. FreeState will be giving members the opportunity to provide feedback and participate from Oct. 1 through Oct. 23.

Members are encouraged to provide feedback to the board members about the adjustment prior to the Oct. 28 meeting.

There are multiple ways to do so.

  • Online – visit www.freestate.coop/adjustment to find more information about the proposal and to submit member feedback directly to the cooperative.

  • Email – send your comments to customerservice@freestate.coop with ESC Adjustment Feedback in the subject line.

  • In-Person – members are welcome to attend the public meeting from 5-6 p.m. on Wednesday, Oct. 28. Social distancing will be practiced. All visitors will be dismissed at 6 p.m. Face coverings or masks and health screenings will be required to enter the McLouth warehouse. There will be no refreshments served due to COVID-19 safety restrictions.
Energy Use Coordinator Matt Lambert will answer questions about energy efficiency, renewables, co-op programs, and everything in between.
Electric Bills Can Be Spooky.

Phantom loads and energy vampires can be scary all year round.

Energy vampires are devices that are plugged in and continually use electricity even when not in use. Phantom load is a term that we use to describe the energy used by the energy vampires (or devices). Together, these two haunt electricity bills all year round.

Don’t be too scared, though. In most homes the cost of these energy vampires is not enough to make a significant impact, but when you look at the entire year these small energy sucks can add up. According to Cornell University, phantom load in the average American home can be $200 per year!

The good news is that we have ways to defeat these scary sounding creatures. The first step is understanding the concept, and the second is identifying the sources.

For example, televisions have evolved greatly over the past three decades. Back in the day the television tube was either on or off. If it wasn’t on, it wasn’t using electricity. However, today, televisions use electricity whether they are on or off due to standby mode and often times being connected to wireless networks. Standby mode does consume a smaller amount of energy while off, but there is still energy being consumed. There are more devices than just televisions that work that way. Devices that maintain temperatures, timers, charging or continuous displays can all use energy even when in the off position.

Take a look around your home and identify devices that use standby or are connected to your wireless network. Satellite or cable boxes can be the biggest offenders, but game consoles, audio components, and computers can also sneak up on you. These types of energy vampires can range from $20 to $40 per year even if they are turned off — but still plugged in.

Other vampires you may identify are your network’s modem, garage door opener, and power tools being charged. They can all add $5 to $10 per year to your bill. And, night lights, surge protectors, phone chargers and clocks can add another $1 to $3 per year. Separately, it may seem like no big deal, but when you add up multiple devices it may be a bigger scare than you anticipated!

When you have identified the phantoms and vampires in your home, plan to exercise the unwanted ones that can be unplugged. If you can group computers or home entertainment devices onto one power strip that can be shut off at one time when you are away for longer periods of time, that may help those energy suckers disappear. Granted, televisions or satellite and cable boxes aren’t meant to be unplugged, but if you will be gone for more than just a few days consider unplugging them.

In short, if it doesn’t need to be plugged in, just unplug it when you aren’t using it. It’s up to each family to decide what’s best for their needs. And, if you need to replace an appliance, always look for the Energy-Star logo. These appliances and devices have been rated to consume less energy.

Understanding how your habits impact your bill, and ways you can combat these phantoms and vampires ensures they won’t be haunting your bill this October.
FreeState Electric Cooperative, Inc., is not subject to the jurisdiction, regulation, supervision and control of the Kansas Corporation Commission, except as specified in K.S.A. 66-104d(f). 
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FreeState is a consumer-owned and consumer-controlled electric cooperative. FreeState operates on a not-for-profit basis for the benefit of its member-consumers. Accordingly, the Board has adopted this Policy on Privacy of Member-Consumer Information to establish fair information principles for FreeState in carrying out its responsibility to respect the privacy of personally identifiable information about member-consumers.

Notice: FreeState publicly discloses its policies and practices for the collection, maintenance, use, and disclosure of personally identifiable information about member-consumers.   
         
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