The boards of Midwest Electric and Paulding Putnam Electric Co-op (PPEC) have voted to conduct a comprehensive study of consolidating the two organizations. If the study results are positive and both boards agree to proceed with a consolidation, the decision would go before the membership of both cooperatives for a final vote.
An initial study by National Rural Utilities Cooperative Finance Corporation (CFC) estimates $11 million - $13 million in savings over a 10-year period. Currently, the two electric co-ops have a shared service program where they share a communications coordinator and an energy auditor. “It has been very beneficial in terms of cost savings and provides a glimpse of what could be possible with a full consolidation,” stated Midwest Electric CEO Matt Berry.
“A full study will be more comprehensive than the initial CFC study and will help answer specific questions such as where the savings would come from. Ultimately, the primary reason is meaningful, long-lasting financial savings for our members,” said Paulding Putnam Electric Co-op CEO George Carter.
The new study will be conducted this spring by the National Rural Electric Cooperative Association and will take 8 weeks to complete. Throughout the coming months and after the study, both co-ops will communicate results with their members and employees at meetings and through a variety of communication channels. Berry and Carter said feedback, questions, and concerns will be solicited throughout the entire process.
At the end of the study process and after seeking member input, each board will determine whether to proceed with a recommendation to consolidate. If both boards recommend consolidation, the members of both cooperatives will vote on a proposal.
“Midwest Electric and Paulding Putnam Electric are small electric cooperatives, smaller than average,” said Berry. “That poses unique economic challenges yet opens the door for us to consider alternative operational models. Because the delivery of cost-effective value is a priority for both organizations, we believe it’s in our members’ best interest that we thoroughly investigate whether a consolidation can deliver beneficial results to our members.”
“A decision to proceed with a full study is absolutely the right decision for both boards,” stated Carter. “They’re being very measured and thoughtful, and not rushing into anything. They’re taking a considerable amount of time to ponder this. This is the most important decision the board will ever make. They’re in a position where whatever decision they make, whether go or no-go, has a huge impact on the cooperative, its members and employees.”
Midwest Electric serves 10,772 members in West Central Ohio, while Paulding Putnam Electric Cooperative serves 13,063 in Northwest Ohio and Northeast Indiana. The two co-ops service territories meet at Van Wert and Putnam counties. To learn more about this study and potential joint venture, visit www.midwestrec.com or www.PPEC.coop.
Questions? Please feel free to contact our office at 800-962-3830 or email our CEO Matt Berry at [email protected].