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In fiscal 2000, another landmark arrangement between Ohio's electric cooperatives and American Electric Power was announced. In July 1999, National Power Cooperative, a wholly owned subsidiary of Ohio Rural Electric Cooperatives, was established to own a new electric power peaking plant for 380,000 cooperative member-consumers in Ohio(for more about the plant project, go to power plant). Owning a generating plant is nothing new for Ohio's electric cooperatives. Since 1968, with the formation of the Cardinal project in a partnership between Buckeye Power, Inc. and AEP/Ohio Power, the co-ops have benefited from owning their own generation assets. The unique arrangement with AEP allowed the cooperatives to "bank" unused capacity forward along with a provision for "backup" electric power services should the plant become unavailable. In consideration, AEP was given access to the unused capacity to sell into the wholesale market. It was a unique business arrangement in the industry that had the features of offering both parties a competitive advantage. With the continued growth of Ohio's electric cooperatives, the projections that the banked capacity will be exhausted by mid-2006 have proved accurate, and the co-ops will be in need of additional capacity to meet their members' needs. Buckeye Power's load profile called for peaking units to be the generation of choice. These landmark agreements with AEP could not have been put into place without a clear commitment and vision of the future. Without question, the not-for-profit motivation of the electric cooperative program was key to the question of how to proceed. And by putting the customer first, Ohio's electric cooperatives reaffirmed their commitment to the viability of the cooperative principles — i.e., to serving their members and their communities — during a time of change. |
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