Business & Finance
One Co-op CEO’s Pocket Solution
Co-op executives looking for a great way to show consumer-members how their energy dollars are being spent could find some of the best examples in their pockets. That’s what Christopher Perry has done on several occasions.
Christopher Perry uses a mockup of a $1 bill to illustrate how money paid by members is spent by the co-op. (Photo By: Fleming-Mason EC)
Perry, president and CEO of Flemingsburg, Ky.-based Fleming-Mason Energy Cooperative, has been known to pull spare change out of his pocket during lunch to explain the basics of energy economics.
“It kind of breaks down perfectly for display,” said Perry. “When you start looking at power costs, most people don’t realize how much of their money is going to address environmental concerns.”
The co-op serves about 24,000 meters, and in the past decade its G&T has spent $1.5 billion on environmental controls, so Perry has learned to use $1 as a basic unit of measurement to explain actual service costs.
“Forty cents of every dollar is for the coal and natural gas that generates the electricity,” said Perry. “Twenty cents of that dollar is used to manage our co-op’s local distribution assets.”
Those costs include distribution lines, vehicles and the personnel involved in local operations.
“Another 10 cents is the cost of our transmission, those high voltage lines used to get power from our generation and transmission cooperative to our lines,” said Perry. “But that last 30 cents is for environmental control.”
Environmental costs account for 30 percent of his co-op’s costs, said Perry. “That’s the point I try to get across to our members.”
After successfully using change as his visual aids several times over lunch, Perry decided to expand on the theme for the co-op’s 2011 annual meeting. He ordered a huge poster of a $1 bill and split it into four parts.
“Each segment reflected our costs and directly represented every dollar spent each month by our consumer-members,” said Perry. “Only 20 percent of the dollar represents what we manage here locally. The rest of it is driven by politics, environmental controls and the big picture economic issues.”
Perry and other co-op officials have received a lot of positive feedback from members, who were surprised by the impact environmental regulations are now having on their monthly bills.
“People are visual learners,” said Perry. “Any time you can pull out $1 in change, this is an easy way to show them where their money is going.”