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Patrons' energy conservation rewarded by Pierce Pepin

A project rewarding patrons for their energy conservation efforts was promoted at Pierce Pepin Cooperative Services' annual meeting earlier this month.

"Energy Sense" was introduced last summer to help electric members save energy and money, and preserve the environment, according to information distributed to the members. Larry Dokkestul, who was named permanent president and CEO of the co-op during the meeting, reported in the information the following five energy-saving programs are offered:

  • A residential program encouraging the replacement of inefficient products with energy-efficient qualified products, including appliances and light bulbs.
  • A residential heating and cooling program replacing older, high-operating-cost systems with more energy-efficient equipment.
  • New home and home improvements program including incentives for energy audits, improvements showing energy savings and qualified new-home certification.
  • Business programs for commercial businesses, farmers, schools and local governments involving energy audits and customized incentives.
  • Renewable energy program supporting members' research and development of small-scale renewable projects with site assessment incentives and project grants.

    Dokkestul told those at the annual meeting nearly $24,000 in rebate incentives were returned to members in the first six months of the project.

    Board Chairman Ron Johnson reminded the meeting audience rebates on energy-efficient bulbs are available through the co-op, even though point-of-purchase information at retailers might tout Focus on Energy, another conservation effort.

    Despite a rapid increase in electric demand, the government has put a moratorium on building coal and nuclear power plants, Johnson also said. So natural gas and wind are about the only options left for expansion. Dairyland Power, which is Pierce Pepin's supplier, is looking into natural gas possibilities, he added.

    Dokkestul later noted the new Weston plant is now coming online, a development he called "good timing" in light of the moratorium.

    Responding to an audience question, Johnson said the moratorium on coal plants won't affect its delivery system, an issue in recent years. Meantime, Dairyland has earmarked $350 million over the next five years to clean up coal plants.

    In a review of the past year for the co-op, Dokkestul discussed maintenance and system improvements to Pierce Pepin's distribution system. He said the new Trenton substation, which became operational in late January, will help meet energy requirements in the southern part of the co-op's territory as well as contributing to overall stability. It currently serves 375 members.

    As for right-of-way maintenance, over 305 miles of line have been cleared and sprayed, with approximately 182 miles more planned for this year, he said. The effort is part of a six-year right-of-way rotation.

    Among other highlights of his review: The retirement of $247,523 in capital credits to 3,823 members; 7,379 accounts served, with 136 new services installed, 120 services upgraded and 1,288 miles of line added; 4,552 load management receivers put in place; 992 appliances sold and 1,725 service calls made; 129 new propane tanks set and 2,900 tanks serviced; $2,570 collected for charitable purposes through Operation Round-Up and approximately $2,700 awarded.

    An overview of legislative issues from Share Brandt, the new manager of the Wisconsin Electric Co-op Association, indicated top concerns include safety in wiring, electric heat billing, scrap metal and copper thefts affecting prices, plus environmental measures such as carbon capture (for which co-ops aren't quite ready) and wind energy.

    "Energy is a hot topic," Brandt said about the interests of legislators in both Madison and Washington, D.C.

    Financial report

    The auditor's report found Pierce Pepin to be in sound financial shape.

    Dennis Carson of Carlson, Highland and Co., LLP, explained there was $18,832,370 in operating revenue last year (up from $17,320,931 in 2006), with $10,765,177 in the cost of goods sold (up from $9,501,655 in '06) and $8,067,193 in gross margins (up from $7,819,276 in '06).

    On the expense side, Carson said operations cost $1,050,949 (slightly more than the $1,050,736 in '06), maintenance amounted to $1,188,133 (up from $1,038,291 in '06), administrative and general totaled $1,216,958 (up from $958,227 in '06) and depreciation was $1,576,902 (up from $1,504,719 in '06), for an overall total in operating expenses of $6,314,073 (up from $5,735,631 in '06).

    Answering an audience member's question, he later said the approximate 27% increase in the administrative category is largely the result of a retirement and severance payment specified in the former CEO's contract, plus the rise in customer accounts ($580,178 in 2007, compared to $493,656 in '06) was due to postage and salary increases, supply costs and the like.

    Capital credits for Dairyland and CFC (Pierce Pepin's mortgage cooperative) were $431,492 (up from $398,158 in '06), he said. Interest expense was $1,025,855 (up from $956,691 in '06) and the interest rate being paid is 5.7%. Members' equity (the amount they have in Pierce Pepin) at the end of the year was $13,738,026 (up from $12,804,235 in '06).

    The co-op had a total of $35,277,487 in assets in '07 (up from $33,348,080 in '06), the auditor said. Included was $4,417,208 in investments in associated companies (up from $4,145,126 in '06). He referred to a hypothetical banker, who would say the total current assets of $5,625,499 (up from $5,239,685 in '06) is more than enough to pay off the total current liabilities of $2,974,148 (up from $2,697,499 in '06), if that ever became necessary.

    Cash and cash equivalents at the end of the year were $308,074 (down from $447,657 at the end of '06), he said.

    Other business

  • Questions from the audience regarded capital credit checks, which can still be claimed even after unclaimed ones are turned over to a scholarship fund, a member was told (typically, the co-op waits three-to-five years before such turnovers); and budget amount reviews for some members who now owe unexpected balances are being conducted, another member was told. The latter stemmed from an increase in propane prices, with members on budgets falling behind, and a workable solution now being sought, it was said.
  • Numerous amendments to the co-op's articles of incorporation and by-laws were approved, ranging from disposition of property to notification about petition actions.
  • The director election resulted in the reelection of Dan Fischer in District 4 (towns of El Paso, Union, Salem, Rock Elm and Spring Lake), Myrna Larrabee in District 5 (town of Ellsworth) and Ronald Johnson in District 6 (town of Trimbelle); all were unopposed.

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