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Grayson RECC Statement Concerning PSC Rate Case

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Description generated with very high confidence

 

STATEMENT

 

March 28, 2019 - Grayson RECC is reviewing the Kentucky Public Service Commission’s recent order which includes a rate increase and a management audit of the cooperative. For 68 years, Grayson RECC has proudly served members in six counties of northeastern Kentucky.  We look forward to an independent audit of our management practices so that all parties concerned can gain a better understanding of the cost-conscious and strategic decisions by Grayson RECC to effectively serve our membership. The service territory of Grayson RECC includes particularly challenging terrain and many economically disadvantaged members. Despite any challenges, however, our practices recognize that fiscal responsibility is essential to maintain the ability to provide electricity at the best rate possible. We welcome any suggestions that will help the co-op succeed.

Since the previous PSC order in 2013, Grayson RECC has taken a number of steps to more efficiently provide our members with safe, reliable and affordable electricity, including:

  • Shifting all employees to a high-deductible health insurance plan. This action saved approximately $280,000 initially and continues to help minimize health insurance costs.
  • Reducing staff through attrition. The co-op now has 43 employees, down from 45 in 2013.
  • Through negotiations with the union that represents some employees, reducing by more than half the amount of the annual wage increase, from $1.25 per hour to $.50 per hour.
  • Strategic investments in maintenance, infrastructure and response:
    • Pole covers that lengthen the lifespan of utility poles
    • Mapping system that reduces response time and cost to members
    • Tablets for line technicians and service crews to more efficiently coordinate service calls

We regret that during the hearing with the Public Service Commission, we were not able to adequately communicate the steps that Grayson RECC has taken to reduce costs, and to address specific concerns that are cited in the order. We appreciate the opportunity to clarify and provide additional information about several of these concerns.

  • In a 1985 agreement that predates the current management and board of Grayson RECC, the attorney for the cooperative was provided health insurance by Grayson RECC. This attorney is no longer associated with Grayson RECC and the cooperative is exploring whether it can discontinue this previous agreement.
  • Contrary to the PSC’s order, at no time did Grayson RECC provide health insurance to an attorney for union members.  Grayson union employees are represented by business agents from IBEW Local 317 in Huntington, W. Va.
  • A wage and salary plan conducted by an outside specialist found that Grayson RECC wages were on level both with comparative co-ops and with skilled trades salaries in the market served by Grayson RECC.
  • Because the costs to recruit and train new employees, particularly linemen, outweighs the cost of wage increases in line with industry standards, Grayson RECC has worked to retain employees with normal pay increases within budget.
  • No current member of the Grayson RECC Board of Directors receives health insurance from the co-op. An allowance that reflects health insurance costs is included in the stipend for board members, yet the average compensation for Grayson RECC board members is below the national average.
  • Under a previous policy, one former board member receives health insurance benefits from Grayson RECC, an agreement that the co-op believes it is ethically bound to honor.

 

The 6.09 percent rate increase granted by the PSC is necessary for Grayson RECC to meet its loan obligations. We appreciate the trust and communication with our valued members and look forward to addressing any concerns or questions as we continue to review the Public Service Commission’s order and the forthcoming Management Audit. Our mission as a locally owned and operated cooperative remains, as ever, to improve the quality of life of the members we serve.

 

Carol Hall Fraley

President and CEO

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