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Cities can grow and not hurt co-ops

by Barry Hart

by Barry Hart

Cities need to grow; electric cooperatives do, too. These two facts won’t be forgotten as state legislative leaders in Missouri try to fix state laws so that neither entity will be hurt when cities annex beyond their current boundaries.

Antiquated state law pretty much guarantees a battle between electric cooperatives and any city that wants to expand its city limits. Electric cooperatives, under current law, are forced to oppose most annexation plans in order to protect the investments they have made in power lines, substations and other equipment to serve rural areas.

Missouri’s electric cooperatives want to work with our state’s municipalities and the industry to correct this problem, because growth and economic development in our communities is at stake.

That’s why for the past year we have been working with the Missouri Municipal League and other organizations to develop legislation that seeks to end years of friction between the state’s cities and electric cooperatives. In addition, representatives of Missouri’s RECs have met with officials of local communities across the state on this issue to get their input for these changes to state law.

When a city annexes territory, the electric cooperatives can (under current law) continue to serve existing customers but cannot serve new loads. Their loan security is based on the ability of the REC to make full use of the engineered design of their distribution system. If annexation occurs before the system has reached its design capacity, loan security is put at risk.

In many cases the city wants the cooperative to continue serving in the affected area but doesn’t have the tools to make the decision locally. The new bill fixes this problem by allowing — not requiring — cities to give electric cooperatives the right to continue serving in an annexed area.

We think these changes in state law would give cities and towns an effective tool to end the battles that may impede their orderly growth and hurt economic development. We think all Missouri electric consumers would benefit if the electric utility industry was able to plan service in areas slated for annexation in an orderly and economical manner.

In the coming legislative session we will be asking your legislators to protect the assets you own as a member of your local electric cooperative and help achieve these goals for the benefit of all Missourians.

Hart is executive vice president of the Association of Missouri Electric Cooperatives.

E-mail Barry Hart

 

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Association of Missouri Electric Cooperatives

Rural Missouri
2722 E. McCarty Street
P.O. Box 1645 • Jefferson City, Mo. 65102
573-659-3423

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