Reality Check: Rates, Regulation and the Body Politic Mike Birkeland, Director – Member Service & Community Relations Sometimes …Reality Bites Reality Check: Rate Regulation The PERFECT STORM REALITY Bites PLATFORM Building The CAMPAIGN Key ELEMENTS Perfect Storm: Growing Pains „97 Consolidation Promise: Lower Rates 22% rate increase: 1999 Diversification Headquarters Member Revolt: Board Turnover Management changes MP Factor The Perfect Storm: Co-op power bill (2000): $16.6 million Co-op power bill (2009): $30.9 million Power Supply Contract * General service rates only – excludes Energy Wise & municipal purchase The Perfect Storm: Timing – $urprise & $ize 2008 rate increase • Introduction of local PCR (power cost rider) • General Service increase of 2.3 cents/kWh in less than 12 months THE Reality Bites “ABOUT 50 PEOPLE ATTENDED A MEETING TONIGHT IN GRAND RAPIDS. MEMBERS ARE CONCERNED ABOUT THEIR UTILITY BILLS …” Dec. 4, 2009 – WDIO-TV, Duluth Grassroots group heats up effort to lower energy bills – Grand Rapids Herald Review - Dec. 2009 ETC … Reality Bites: There is much room for improvement – Jan. 6, 2010 Platform Builders Platform Builders Meeting Themes: 1. Power Supply Contract - GRE 2. Co-op OUT OF CONTROL 3. Registration form - petition “Hopefully, the co-op will get regulated.” Regulation is the “only legal remedy” Platform Builders The The Campaign Plan Plan the work “Work the Plan” Keep messages simple Campaign Objectives Communicate the privilege of voting Inform members of facts, financial impact of regulation Minimize misinformation and maintain the integrity of the co-op Help members make an informed decision Campaign Basics In a co-op: It‟s the right and privilege of members to vote on an issue like regulation Our Role: Provide facts for an informed member vote Campaign Opportunities PUC Mission: “…maintain a regulatory environment that ensures safe, reliable and efficient utility services at fair and reasonable rates.” LCP Mission: “Provide safe, reliable and affordable electric service …” Campaign Messages The “Cost” of regulation Duplication: Members pay twice Loss of local regulation by member-elected board Regulation means: More paper More government More consultants More lawyers More costs for members Campaign Concerns ? $810,000 in grants since 2004 Competitive ? consumer option 2009: $10.5 million wholesale power cost savings ? More Employees Capital Credits Campaign Examples Fuel Oil – 2050% Home – 1880% Bread – 1268% Car – 1075% Gas – 1000% Beef – 886% Wages – 762% LCP Electricity – 297% Average electricity increase: 1.5% per year over last 28 years Campaign Tactics Grassroots Employees Members/Allies Media Campaign Tactics Newsletter Web site “ballot box” 2010 Annual Meeting – Panel Discussion Organizers vs. former PUC Commissioner Leroy Koppendrayer Campaign Tactics Special Mailing – “Equal Time” Board Position Statement Petitioners‟ Statement Face-to-Face member meetings 40-plus meetings over 2 years 2010 meetings: “Core Group” Equal Time Chair Koppendrayer clips Campaign Tactics Campaign Tactics Key Elements Office of Energy Security MSRPO Association (Seasonals) Social Media Supportive members entered the fray Other co-op support Former PUC Chair: Credibility Do You Believe in Miracles? 18,355 ballots returned 63% of those voting voted No Going Forward Maintain message harmony Reduce target opportunties Reduce target size Questions Our Mission: Strive to exceed the expectations of our members with rates that balance safety, reliability, service quality and the financial strength of the Cooperative.