can grow and not hurt co-ops
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
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.
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.
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.
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.
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