Co-op president sees continued growth for member systems

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Published: July 23,2007

Most people probably don’t know about South Mississippi Electric Power Association (SMEPA), but it supplies power to thousands of state residents. SMEPA’s president Jim Compton says that’s because the cooperative’s member associations have more dealings with the public than his organization.

SMEPA is a rural electric cooperative that generates, transmits and sells wholesale power to 11 member distribution cooperatives. Those member systems own and maintain approximately 52,000 miles of distribution line and provide service to approximately 400,000 meters in 56 counties.

“Our member systems’ meters represent one million people,” Compton said. “Geographically, we cover half the state, 52% of the land area. I say we serve rural and former rural areas.”

Those former rural areas include places such as Oak Grove in the Hattiesburg area, Gautier in Jackson County and expansions in the Brandon area.

The cooperative was started in 1941 but was interrupted by World War II. Compton said it took a long process and three trips to the Supreme Court to get SMEPA going again because investor-owned electric companies wanted to sell power to the rural electric associations. The battle ended in 1967 and SMEPA’s coal-fired plant went online in 1978.

Why did the electric power associations want the cooperative? “With us, our members have their own generation and transmission system,” Compton said. “They have a secure source of power that enables them to have control over their own destiny.”

Furthermore, he said SMEPA is non-profit like the member systems and therefore less expensive. The collective buying power for 11 systems is also a factor. SMEPA generates approximately half of its power and purchases the other half. Member systems have contracts with the cooperative until the year 2045.

“The cooperative provides rate stability. It’s like the difference between owning and renting a house. If you’re renting, the landlord may want to make more money and will go up on the rent,” he said. “We provide long-term ownership for our member systems. They sit on our board of directors and make their own business decisions.”

Although Compton doesn’t foresee any more member systems, he does expect those systems to serve more people. “We’re seeing growth all over the state for our members now,” he said. “There’s growth along the I-55 corridor, the South Rankin County area, Oak Grove in Lamar County and Katrina migration areas such as Picayune and Pike County. The Delta didn’t grow for a long time, but now we’re seeing growth there too.”

SMEPA is equipped for growth among its member systems. Those electric systems on average serve seven meters per mile. That figure compares with 38 meters per mile for urban power companies.

“That makes it harder for us because we must service more miles with equipment, building and repairing,” Compton said. “As our members have more meters it becomes more cost efficient for us. More customers will be better for us.”

He feels the cooperative’s biggest challenge at this time is the threat of more regulation from Washington, D.C., as some members of Congress want to raise rates. The idea behind that thinking is that higher rates will cause consumers to use less energy.

“We do everything we can to keep costs down and do not want rates to increase,” he said. “They (Congress) don’t appear to be taking the time to think through the long-term consequences of rate increases.”

The whole thing in Mississippi, he said, is having cheap electric rates as a key component in economic development.

“We don’t want to lose that competitive edge,” Compton added. “We’re doing all we can to keep rates down.”

SMEPA has headquarters in Hattiesburg and employs 270 skilled and professional employees. The generating fleet includes a coal-fired plant, gas-fired plant and interest in a nuclear facility. An additional eight combustion turbine units make up additional generation capacity to meet peak demand.

The 11 member systems include the following electric power associations (EPA): Coahoma EPA; Coast EPA; Delta EPA; Dixie EPA; Magnolia EPA; Pearl River Valley EPA; Singing River EPA,;Southern Pine EPA; Southwest Mississippi EPA; Twin County EPA; and, Yazoo Valley EPA.

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.

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