Welcome to FreeState Electric Cooperative
Leavenworth-Jefferson Electric Cooperative (LJEC) and Kaw Valley Electric Cooperative (KVEC) have announced a new name and logo for the future consolidated cooperative.
FreeState Electric Cooperative, Inc., will be the name of the newly formed cooperative that will be official on January 1, 2017, provided the membership of both LJEC and KVEC vote to accept the proposed Articles of Consolidation and Consolidation Agreement during both cooperative’s annual meetings on April 19, 2016.
At the current time, both cooperatives are operating under a cooperative alliance that has seen a significant reduction in costs. The new cooperative is forecasted to save $20 million over the next 10 years.
“The backbone of this cooperative alliance and bringing these cooperatives together is savings for the membership over the next 10 years,” said Chris Parr, assistant general manager of LJEC and part of the alliance’s senior leadership team. “When we break that large total down per member, we see avoided costs of doing business averaging about $137 per year per member, overall.”
“Members will not see rates decrease,” added Parr. “However, rates will remain stable, and we will be able to delay rate increases for possibly the next three to five years.”
The last rate increase for LJEC was 2010 with a projected increase in 2015, and the last rate increase for KVEC was 2012 with a projected increase in 2017.
“Both cooperatives have done all we can do to avoid increasing rates,” Parr said. “The typical cycle for rural electric rates is to see increases or some adjustment every three to four years, and we were just outside that target as we looked forward. Without coming together, rate stabilization is just not possible.”
“We have seen efficiencies across the board, and we are seeing numbers exceeding those forecast in regards to savings,” said Parr. “We have been able to share equipment and resources, and reduce duplication of products and services. Eight retirements in the last 15 months have allowed us to adjust the roles of current employees, as well as hire 10 new employees to keep both facilities operating at the same level our members expect and deserve.”
One current transition is KVEC General Manager, Jerry Manning, who will be moving into a different role for the cooperatives. He announced that both Boards of Trustees had named current LJEC General Manager, Steve Foss, CEO of FreeState Electric Inc., and will lead both cooperatives as the membership approaches the vote in April, and January 1, 2017, implementation of the new cooperative.
“It was an easy decision knowing that the employees and this new cooperative are in capable hands,” said Manning. “Steve has a unique opportunity ahead of him, and I feel that the timing is right to begin the transition.”
Manning added, “I went to the board and asked them to consider moving in this direction now, rather than later because I feel it’s important to establish the leadership team and direction as we move forward. I will still be working for our members, and I will continue to be a part of the move toward FreeState Electric Cooperative.”
Foss has been with LJEC for the past eight years and has 32 years of electric cooperative experience.
“I’m grateful for the opportunity to lead the alliance and blend these two cooperatives into one,” said Foss. “We have a talented group of employees who work hard for our membership.”
“We have already begun to transition in several areas on the business side and day-to-day operations,” Foss added. “Both offices in Topeka and McLouth will remain open, and no employees will lose their job throughout this process. The joining of these two cooperatives will be beneficial to not only our members and employees but the communities we serve.”
One benefit to the community of McLouth is moving the billing functions to the McLouth office.
“We felt it was vital to our small community to take a look at the functions of the consolidated cooperative and identify what would benefit this community,” Foss said. “Moving our financial accounts, and billing functions will not only help The Bank of McLouth, but it will help our Post Office, as well.”
The office in Topeka will take over the calling center, and other functions to balance moving billing functions to McLouth. The timeline for moving functions is throughout 2016 with completion slated for January 1, 2017.
FreeState Electric Cooperative will be the largest rural electric cooperative in eastern Kansas, and will become the fourth largest rural electric cooperative membership in the state of Kansas at 14,691 member-owners.