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Frequently Asked Questions

Welcome to our Frequently Asked Questions page!  We hope our members find this page informative and helpful.  Questions you would like to be considered for addition to the page can be submitted using the Contact Us link at the top of our website.  The questions and answers will be posted in the order they are received, with new FAQs posted at the top of the page.

 

Question:  Is our electric cooperative financially strong?

Answer:  We confirm that the cooperative is in a financially healthy position, which can be verified by an examination of the financial statements, as well as from the independent auditor’s report.  We are committed to continuing to provide safe, reliable, cost-effective electric service.

 

Question:  How does the current twenty-eight years of outstanding capital credits compare to that of past years?

Answer:  The rotation cycles from 10 years ago and 20 years ago are compared to the current rotation cycle in the following table.

Year

Earliest Year Retired

Rotation Cycle

2018

1990

28 years

2008

1984

24 years

1998

1975

23 years

 

Question:  Why have some questions that were asked at the February Board Meeting, the community meeting at RRHS, and the annual meeting not been answered?  Why are you not allowed to discuss some things?

Answer: We are eager to share non-confidential information with our members and have created this webpage for that purpose.  While we understand our members want all their questions answered, there are some questions we simply cannot provide information about.  For example, we are not allowed to publicly discuss personnel decisions.  Doing so could subject the cooperative, its board members, and the employees to potential litigation because personnel decisions deal with personal, not public information.  This confidential information about employees and prior employees is protected by both federal and state laws.

 

Question:  Are current employees allowed to answer questions?

Answer:  As stated above, employees nor board members are at liberty to discuss personnel issues.  However, we are happy to share information that can be shared.  We also encourage you to speak directly with our employees.  We are confident that they will be both informed and happy to answer non-confidential questions.

 

Question:  Auditors' reports tell members that RRE is keeping accurate records and that everything balances.  It does not tell us if decisions made regarding expenditures are appropriate.

Answer: As you know from managing your own businesses, most management decisions are not “black and white”.  They require an exercise of judgement, and the decisions made can be fairly and reasonably argued from multiple perspectives.  It’s unlikely that every member will agree with every decision made by the board or management every time.  Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions through elected representatives.  Your elected board members value your opinions and want to hear from you.

 

Question:  Can a co-op the size of RRE reasonably justify spending $70,000-$90,000 annually for training and development?

Answer:  While the cost/benefits analysis of training and development programs can be difficult to quantify, we confirm that employee training and development is, and always will be, a high priority.  A cooperative cannot offer safe and reliable service and build leadership skills without investing in the training and development of its employees.  When training is done onsite, costs typically associated with sending employees offsite for training can be saved (things like mileage, meals, airfare, time away from work, etc.).  The cost of Dr. Thorn’s training, for example, averaged about $222 per employee per month for the period of his work ($160,000/24 months/30 employees).

 

Question:  Did bringing the administration of the conservation contract in-house necessitate paying extra money?

Answer:  The decision was made to in-source the administration of the conservation program.  The contractor was released from the contract and paid money he had already earned under the existing contract.  However, there was no need to pay someone else for the conservation services he was to have provided.  That work has been absorbed by employees in the cooperative who did not receive an increase in pay to take on additional responsibilities.  The benefit of in-sourcing the program is that all future administrative payments that the cooperative receives from Bonneville Power Administration through the conservation program will be available for use by the cooperative—not paid to an outside contractor.  This will provide the co-op about $110,000 in additional cash per year.  In addition, full-time employees are available during regular business hours to answer questions and assist members with conservation inquiries.

 

Question:  Why was there an increase of $2.50 on the system maintenance fee?

Answer:  Prior to the April 2018 rate increase, Raft River Electric asked National Rural Utilities Cooperative Finance Corporation (CFC) to conduct a cost of service study to help the Board develop an appropriate and equitable rate structure that would provide adequate revenue to cover operating costs, including the increase in wholesale power costs.  The results of the study showed that the system maintenance fee was low.  This fixed charge is the amount that every meter’s owner should pay if that owner were equitably sharing the burden of maintaining the poles, lines, and other infrastructure to get power to the meter.  You can think of this as the cost of the opportunity to flip a switch and have power.  For example, consider a summer home owner who only uses energy for a short amount of time each year, or a member who uses predominately solar power.  Both of these members have access to instant energy from the system whenever they need it, but without system maintenance fee, they do not shoulder their fair share of the infrastructure cost and that cost would have to be built in as higher rates in the cost/kwh of energy.

 

Question:  How do the increases in the cost of wholesale power compare to the rate increases to Raft River Electric’s members?

Answer:  The table below illustrates that Raft River Electric has absorbed more than half of the increases in cost of wholesale power over the last ten years.  The reason we have been able to do this is because of a healthy balance sheet and attention to cost-effective management.

 

BPA

Raft River

Effective 6-year increase

21.6%

8.5%

Effective 8-year increase

31.8%

15.0%

Effective 10-year increase

34.3%

15.0%

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