Mike Couick
Mike Couick, CEO of the Electric Cooperatives of South Carolina.
The January announcement that Duke Energy wants to merge with Progress Energy—creating the country’s largest electric utility in the process—is but one part of an evolving electricity marketplace in South Carolina.
As the number of players in the Palmetto State electricity market goes down, and, in this case, the potential market power of one player goes up, electric cooperative leaders are watching to ensure your interests are protected. The proposed merger of the two for-profit utilities is said to be the most efficient way for the companies to invest in the power grid and, of course, increase shareholder value. Electric cooperatives, by contrast, benefit from being a part of America’s largest utility network and from working together to build efficiency into their operations. Because your local electric cooperative is not structured to make profits, but rather to provide affordable and reliable electric service, our top goal is satisfying our members, not stockholders.
Please don’t misunderstand my sentiment here. We have not taken a position on the proposed merger. However, we continue to monitor the situation and are in touch with state legislators and the appropriate state and federal regulatory personnel who will assess the impact such a merger could have on electricity consumers.
We’re keeping tabs on the proposed merger, in part, because South Carolina’s electric cooperatives signed an agreement last year to purchase some of their wholesale power from Duke Energy. The first purchases are scheduled to begin in 2013, and by 2019, the total purchases from Duke could be as much as 1,000 megawatts of capacity, nearly one quarter of our present needs. That agreement is worth nearly $2 billion in savings to the members of South Carolina’s electric cooperatives and must be protected.
We also want to know how the merger could affect the coordinated building of nuclear power plants, wherein utilities work together on these expensive projects rather than building only for themselves. Such an approach could mean that only plants that are needed are built, reducing excess generating capacity, helping the environment and protecting all ratepayers’ pocketbooks.
These long-term issues may not seem urgent, but wise men and women know from life’s experiences that a lack of planning increases the chances of future pain. Keeping a bird’s eye view on all the factors that may ultimately affect co-op members is one of the things your cooperative’s board of trustees and its CEO demand of me and the staff here at the state association of cooperatives. We’ll stay vigilant and keep you posted.
More than a third of the state’s population depends on electric cooperatives for their electricity, and on behalf of 2,300 co-op employees and board members, let me say that we are humbled by the faith you put in us to do a good job. We intend to meet your expectations. Thanks for the opportunity.