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CO-OP CONVERSATIONS : CHERRYLAND SELF REGULATION

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New state law allows electric cooperative utilities to set their own electric rates without state approval.

April 2009—Cherryland board is expected to vote on a proposal from its administrators to allow the cooperative to set its own electric rates and power supply recovery charges. Formerly this authority rested with the Michigan Public Service Commission.

Cherryland is the first cooperative in Michigan to seek self-regulation.
This will save money for the co-op, which spent about $80,000 in legal and consulting costs on its last state-approved rate increase three years ago.
The co-op spends around $12,000 annually to set its power cost recovery charges through the MPSC.
Change must be approved by 2/3 majority vote of the cooperative board. Co-op members can challenge the decision with a petition signed by 5 % or 750 members, whichever is less, and then secure a 2/3 majority vote of the membership to overturn the decision. (Cherryland serves around 33,000 members in a six-county area, 95% are residential.)

The oversight boards will be responsible with their newfound authority says former state Rep. Howard Walker. “They still have to answer to their members. It’s possible that rates could be adjusted more quickly downward, as well,” Cherryland’s General Manager, Tony Anderson, expects officials will consider a rate increase this year.

Cherryland Cooperative Says		Co-op Conversations Replies
Anderson says, “It will be easier. But most importantly, it will be less expensive and that saves the public money.”		Co-op Conversations asks ... Does it? How do we know the rate increase is needed if there is no oversight or regulation? We all know what happened to the economy when government oversight was unavailable. Greed is easier to get away with when nobody is watching out for the members best interests.
ANDERSON ALSO SAID THE UTILITY HAS NO REASON TO DRAMATICALLY INCREASE RATES BECAUSE REVENUE SURPLUSES ARE RETURNED TO COOPERATIVE MEMBERS THROUGH PATRONAGE CAPITAL PAYMENTS UNDER THE COOPERATIVE’S REGULATIONS.		FACT: The last rate hike January 1, 2006, 3.6%, resulted in increased revenues of more than $990,000 a year. These revenues were produced by higher consumer rates being changed.

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