CEO Message – May 2018

Photo of Clay FitchConstruction of a new grocery store in Carlin reminds me how much I appreciate the businesses that serve our small, rural communities. Not only do our local merchants deliver essential services in isolated markets, they provide jobs, places to see our friends and neighbors, and generously support so many community and school organizations. In essence, our business members make it possible for all of us to enjoy a great quality of life.

We certainly welcome new business members into your local electric cooperative, but I miss the businesses that once lined our main streets: the car dealerships, the movie theater, the bowling alley and the pharmacy, among others.

For those businesses that remain in our small towns, it’s quite an achievement to carve out a market niche and to stay competitive in an increasingly global and online economy.

You have probably noticed, unless the business is a travel plaza, a fast-food restaurant or a casino that also serves tourists, we rarely have more than one business fulfilling a local need. For example, we only have one pizza parlor, one dentist, one clinic, one auto parts dealer, one florist, one hardware store and one bank. In many cases, competition just isn’t feasible because there simply aren’t enough customers in a rural community to support two similar businesses.

Las Vegas, on the other hand, is an entirely different world. There may be dozens, or even hundreds, of options for some services. Few cities in the world can support some of the businesses that thrive in Las Vegas.

In such a vibrant economic climate, it may be possible to create a competitive electricity market. Several large consumers have demonstrated that market purchases are feasible.

In smaller communities like ours, where we’re lucky to have even one grocery store, it’s hard to imagine that for-profit electricity providers will be interested in serving many of our members. Remember, the primary reason the members formed Wells Rural Electric Company (WREC) in the first place is that it was not profitable for investor-owned utilities to serve so few consumers spread over such a large area. Only the not-for-profit coop business model has proven it can affordably bring safe, reliable and renewable electricity to you.

Through hard work, board, manager and member involvement brought hydroelectricity generated in the Pacific Northwest to north- eastern Nevada. Hydro has historically been the least expensive, clean, renewable generation resource.

Your locally-elected Board of Directors and your employees work hard every day to keep electricity affordable. While many of your employees focus on controlling the cost of reliable operation of the local distribution grid, I spend the majority of my time working to keep the cost of wholesale electricity down. That requires a strong working relationship with our wholesale power provider, Bonneville Power Administration (BPA) and constant attention to laws and regulations that could increase wholesale power costs.

As a hedge against BPA rate increases, WREC is also a founding member of a cooperative purchasing pool that makes wholesale electricity market purchases on your behalf. Not only do supplemental market purchases help us control costs, it also provides tremendous insights into wholesale power market pricing and the costs of getting electricity to our community. If a lower price for whole- sale electricity was available, WREC would have already bought it and passed those savings through to you. That’s what rural electric cooperatives do. That’s the only reason WREC exists.

Clay R. Fitch
Chief Executive Officer