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Member Regulation Makes Sense

Dan Dasho, CEO, September 2015 MCL

Cloverland Electric is a member-owned, not for profit, electric cooperative established in 1938 by local residents in the EUP, which for the first 30 years had its rates and tariffs regulated by the board of directors. That changed in the 1960’s and since then, we’ve been regulated by the Michigan Public Service Commission (MPSC), a governmental agency with commissioners appointed by the governor.

Your coop’s board of directors consists of members whom you elect to set the policies that guide our operations. At present, decisions on rates and billing charges are not controlled by your elected board, but by the MPSC in Lansing.

Member regulation would allow your board to set rates, tariffs and billing rules for Cloverland. In June, your board decided to move towards becoming member-regulated. Cloverland would join seven of the nine Michigan electric co-ops as well as a majority of the electric cooperatives across the country, who are member regulated. Member regulation is not total deregulation. The MPSC would continue regulating business matters related to safety, interconnection, codes of conduct, territorial issues, distribution performance standards, and quality of service.

Why does this make more sense?

One reason is that being member-regulated allows your democratically elected board to be your direct contact for our rates and service rules. Directors have the knowledge and experience to make decisions with the perspective and concern that only a local co-op member can bring, and no motivation to generate profits for stockholders. You should not have to use attorneys with associated legal fees to get your message heard regarding rates and tariffs.

By being member regulated, we would save close to $140,000 per year in assessments and other fees that we currently pay to the MPSC. A typical rate case before the MPSC easily costs us $50,000 in legal fees. It also allows us to be more flexible in establishing fair and appropriate rates quickly. A request to the MPSC can take six to eight months, depending on the MPSC’s schedule..

Member regulation does not affect the basis for rate-making.

Our rates will continue to meet the following guidelines:

1. Rates and charges shall reasonably reflect the cost of providing service.

2. Rates shall be uniform within the classes of service provided by the cooperative.

3. Members will be notified before any rate or rule changes take effect.

4. Members will be notified and allowed to address the board about any rate increase or rule change.

What is the next step?

Cloverland will be holding public meetings in your area to fully explain this proposal. Members will be given time to express comments and ask questions. Following those meetings, your board of directors will meet Oct. 15 to consider a proposal (see notice below) that would make Cloverland Electric the eighth member-regulated electric cooperative, effective Jan. 2016. The meeting will be open to all members wishing to provide input about member regulation. If the board approves member regulation by the required two-thirds vote, the next step would be to notify the MPSC.

How do I provide my comments?

We would like to hear your comments and are providing many ways for you to do so.

1. By sending an email. A special email address has been set up to receive your comments at memberreg@cloverland.com. Our staff will receive these comments that will be forwarded to the board.

2. By postal mail. Send to 725 E. Portage Ave, Sault Ste. Marie, MI 49783, attn: Member Regulation.

3. By telephone. Call 906-635-6808 to leave a message that will be shared with the board. Or, please feel free to call your director at thephone number listed on page 4.

4. In person. We have scheduled six Community Outreach events throughout our service area for late Sept. and early Oct. The schedule is listed on the back cover of this magazine.

5. At the special open meeting on Thursday, Oct. 15, set for 9 a.m. at the Dafter Town Hall.

Any comments made through these opportunities will be provided for your board of directors to review before considering the proposal to become member-regulated.

This is a positive step forward in bringing decisions to the local board table rather than a hearing room in Lansing. It’s part of the cooperative difference and we hope to hear from you as member-owners of Cloverland Electric Cooperative.

Meet Michigan’s First Lady of Energy

MECA – June 1, 2015 MCLValerie

Often referred to as Michigan’s “Energy Czar,” Valerie Brader chuckles at that moniker. She appreciates the respect, but prefers the title that Gov. Rick Snyder gave her, executive director of the Michigan Agency for Energy.

Brader, 38, is the first boss of a brand-new agency—an acknowledgment by Snyder that keeping the lights on for Michiganians deserves the undivided attention of a high-powered executive. Brader will spearhead, among other things, the effort to keep the juice flowing while Michigan, facing federal mandates on emissions standards, finds cleaner energy sources than its coal-fired power plants.

“That’s our first big challenge,” Brader says. “That’s the issue that will have the greatest impact.”

Because of EPA air-quality requirements and the aging of conventional facilities, the state must close 10 coal-fired plants (nine in the Lower Peninsula and one in the Upper Peninsula) within the next few years. Combined, these plants currently supply electricity to more than 1 million customers. Snyder plans to wean Michigan’s electric plants off coal and onto cleaner fuels, such as natural gas.

Meanwhile, the state’s two largest energy suppliers—Consumers Energy and DTE Energy—see a looming crisis. They predict that, absent proper management of the transition and careful attention to other energy challenges, rolling blackouts and electrical shortages could become a routine part of life in the state.

Averting that crisis, Brader says, will require a multi-pronged approach involving reducing energy waste, finding the right place for renewable energy in the mix, and balancing the pros and cons of utility regulation versus commercial customer choice.

Brader has been with the Snyder administration since 2011, most recently as a deputy legal counsel and senior policy adviser. Before that, she was the chief energy policy officer at the Michigan Economic Development Corporation. Brader also practiced environmental and corporate law, and was an adviser to former Idaho Gov. Phil Batt.

Snyder has described the new agency, which will become part of the Department of Licensing and Regulatory Affairs, as one that “responds to the energy challenges that we know are before us.” Choosing Brader to head the Agency is a recognition of both her energy policy expertise and legal skills, he said.

Brader and her husband, Ted, have a 2-year-old son, Finn. She commutes to Lansing from Ann Arbor every day. The high-powered job, the family, the commute…It’s no wonder that when asked what she does in her spare time, Brader offers her signature laugh and a “spare what?” look.

The one person, Brader says, who doesn’t acknowledge that she is juggling a lot of balls in the air is Finn.
“He’s sure the most important thing in my life is him.”

Considering the energy issues Michigan must confront in the immediate future—power plant closings, pressure to deregulate the utilities, etc.—one might wonder why Brader took the job in such a tumultuous time.

“Because it’s also the most exciting time…,” she says. “Big challenges offer the biggest opportunity to make a difference.”

Legislation Would Strengthen Tie Between Our Peninsulas

Mac-Bridge

Craig Borr – July/August MCL

The Mackinac Bridge opened to vehicle traffic between the upper and lower peninsulas nearly 60 years ago. To this day, it continues to be a vital commercial link, as well as a symbol of what Michiganders can do when we work together for our state’s benefit.

Legislators in Lansing may soon have an opportunity to debate legislation that could be a similar “bridge” for enhanced flows of electricity between our two peninsulas. But it will take a great deal of determination and willpower to move this legislation forward. There are likely to be many detractors—as there were when we built the “Mighty Mac”.

Legislation was recently introduced in the Michigan Legislature that could result in the development of an additional high-voltage transmission link between the peninsulas. The Senate version of SB 282 was introduced by Sen. Tom Casperson, while the House version, HB 4575, was introduced by Rep. Triston Cole.

Currently, our two peninsulas do not operate as one when it comes to electricity. Michigan policy, utilities and regulators control the Lower Peninsula, while Wisconsin interests and utilities dominate the Upper Peninsula.
All too often these competing interests and policies do not align—and customers are caught in the middle.
In addition to creating a more robust electrical tie, the legislation would form one “resource adequacy zone” to include both peninsulas, as well as increase reliability by reducing electrical “congestion” costs involved in the flow of energy between the peninsulas.

These congestion costs are a hidden tax in the cost of electricity. Portions of the northern Lower Peninsula as well as the Upper Peninsula have some of the highest congestion costs. Residents who live in these congested areas have higher electric costs because of this “hidden tax”. These costs could be dramatically reduced, and in some cases eliminated, if we as a state have the will to invest in a more robust transmission link between the peninsulas.

Since most of Michigan’s electric cooperatives are net buyers of wholesale electricity, this legislation could create more competitive markets with additional buyers and sellers of wholesale energy, as well as renewable energy—and that should provide tangible long-term benefits for electric cooperative consumers.

This legislation could also expedite the development of newer, cleaner generating capacity for the Upper Peninsula—an area of our state that recognizes all too well what can happen when there is only one significant generation resource and no meaningful way to access bulk electricity from the Lower Peninsula, where most of Michigan’s electrical generating capacity is currently located.

Further development of renewable energy, particularly wind, can also be enhanced with additional connectivity between the peninsulas. The Thumb region of Michigan’s Lower Peninsula has been identified as the best region
for developing wind energy. A more robust transmission link will allow us to export wind from the Thumb area
to the Upper Peninsula—or perhaps export wind from the Great Plains and Upper Midwest to utilities throughout Michigan.

If Michigan legislators have the fortitude to enact this legislation and we eventually fund and construct a new, more robust transmission link between our peninsulas, I believe we will look back someday, like we often do when crossing the “Mighty Mac”, and feel a very real sense of accomplishment that we as Michiganders have done something to benefit many generations.

 

Chefs Celebrate Local Bounty at Les Cheneaux School 

Yvonne Whitman-July/August MCL

The springtime forests surrounding Michigan’s Les Cheneaux Islands offer up rich carpets of leeks and morels. The sparkling waters of Lake Huron provide a steady supply of fresh, succulent fish. Locally-derived pork, beef, lamb and buffalo as well as poultry, eggs and handmade cheeses, are plentiful. In summer, local fields yield an abundance of healthy, organically grown vegetables and fruits. And the chefs in training at Les Cheneaux Culinary School are busily gathering this magical harvest and learning to create uniquely Michigan gourmet cuisine from this exquisite local bounty.

  Located on the northern shore of Lake Huron, the 36 wooded Les Cheneaux Islands are often described as “shoreline gems,” and the Les Cheneaux Culinary School may just be the newest jewel in the crown. Opened in September 2014, the school is located in the quaint 170-year-old village of Cul.2Hessel and is housed in the former Hessel Bay Inn. The building has been meticulously renovated to reflect the iconic charm of the old boat houses dotting the channels that weave throughout the islands. The 5,000-square-foot facility includes a state-of-the-art kitchen, a thoughtfully designed 55-seat rustic-modern dining room and a deck offering lovely views of the local marina and waterways. Also featured is a uniquely-designed indoor/outdoor bar where one can enjoy house specialties including a fresh rhubarb martini.

  With a class size restricted to eight students, the school provides a year of hands-on experience in a real-time professional kitchen environment. “The small class size and the nature of the school allows the students to live, learn and share their love of and appreciation for fine food, while honing their cooking skills,” according to Program Director and Executive Chef Zachary Schroeder. A St. Ignace area native, Schroeder states that “Fresh and local is our main theme and the niche that separates us. We go out and work with farmers, teach
ing students how to best source from the farmers and utilize that food.” He says they can obtain a superior product at an affordable, sometimes slightly higher price than a typical restaurant using large distributors of products from random sources. “The students will learn a different process than those taught using typical restaurant suppliers. The sky’s the limit as far as the quality of fine food in the U.P. if I can teach them how relatively easy it can be to source this food locally.”

  Having spent most of their year-long course immersed in learning to source and prepare an elevated local cuisine, summer finds the chefs-in-training throwing open the doors of the school’s charming dining room— inviting in the dining public along with the much anticipated summer lake breezes. From mid-May to early September, the students learn all aspects of restaurant management and service in a real-world environment while offering an utterly unique local dining experience.

  Fine dining on locally harvested, organically-grown foods is a concept enjoying a worldwide resurgence. This makes increasing sense economically, environmentally and for health reasons. While students emerging from the Les Cheneaux Culinary School are certainly equipped to carry their skills and experience in farm-to-table cuisine anywhere in the world, there is always the chance that— in an echo of the school’s own credo—the local area will benefit, too. Pickford native and Culinary School student Katie Keller, 21, isn’t sure of her plans yet, but says, “I’m seriously giving thought to perhaps becoming a chef on a Great Lakes freighter.” As with a restaurant menu, she has many options from which to choose.

  For more information, including dining hours and dates, go to lcculinary.org or call (906)484-4800.

Cloverland Electric Cooperative is an equal opportunity provider and employer.