Reporting for Duty

Despite a near constant barrage of challenges during the last year, United Cooperative Services has emerged with an even greater resolve to provide the membership with exceptional service and value.

That was the underlying theme of President Patsy Dumas’ official report during United’s 2023 Annual Meeting, held Oct. 13.

This was the fourth annual meeting held virtually where members could attend either online or by telephone. Dumas discussed adapting to rapid changes during event, where election officials also announced that she again will serve District 2 (Burleson area), and Harry Thompson will serve District 1 (Possum Kingdom and Palo Pinto County Area).

“Even in the face of extreme inflationary pressures on just about every aspect of our business, we have been able to manage the extreme growth in our area and ensure reliable service,” she said. “And with our former power supplier Brazos Electric’s exit from Chapter 11 bankruptcy, United is well-positioned to manage the volatile ERCOT power market going forward.”

Despite the recent onslaught of external challenges, Dumas said United’s employee team always has the membership’s best interest at the forefront of the co-op’s planning and strategic vision, and they work hard every day to provide the membership with exceptional service and value.

“Regardless of what Mother Nature might throw at them, they show up to serve all of you every day,” she said. “Even more importantly, the employees serve you safely. I think we can all agree that, no matter the circumstance, we want our employees to do their best for you, but also go home to their loved ones every day.”

That commitment to exceptional service and value isn’t limited to only United’s electrical business, she said. The internet business recently surpassed 21,000 subscribers, which they achieved in record time while facing challenges similar to those seen in the electric business.

“I’m happy to report that we are now providing high-speed internet to more than 21,000 members and growing,” she said. “And the reviews are in: United’s internet service scored a 92 on the American Customer Satisfaction Index (ACSI). No other internet provider scored higher than 80. Our team continues to work as hard as can be to get you connected as quickly as possible.

“Please know that the United employees, management and board of directors continue to be committed to the mission of exceptional service and value, all while being fiscally responsible to you and your cooperative.”

As Texas’ sixth-largest cooperative, United continues to grow with each passing year, said United CEO Cameron Smallwood.
It supplies power across 11,000 miles of line. It delivers that power to more than 75,000 member-owners and more than 100,000 meters across 14 counties.

As a not-for-profit electric distribution cooperative, United’s goal is to provide members with exceptional service and value over making profits, Smallwood said. Any money that the co-op makes goes into a patronage account, where it’s saved for members based on how much energy they buy from United.

“Bottom line is we have no extra incentive to make extra money at your cooperative,” he said. We just have to make enough to run the business and a little bit extra to keep the bankers happy as we go forward. Our mission is pretty simple: It’s providing you, the members and owners, exceptional service and value. That’s our  goal.”

Following the global pandemic, Winter Storm Uri and the Brazos Electric Cooperative bankruptcy, United’s board of directors voted not to retire member dividends for 2021 and 2022 out of an abundance of fiscal caution, Smallwood said. This year, the board elected to begin the member dividends program again.

“We just restarted the member dividends to you, so you should have your checks in the mail or credits on your bill,” he said. “We’ve retired almost $85 million back to our members since the year 2000, and that’s what makes us different and our business model different.”

Members may not see as much as in years past, he said, because inflation has caused the price to build and maintain both the electrical and high-speed internet to soar. Also, following the Brazos bankruptcy, United’s former power provider will no longer retire its capital credits for the foreseeable future back to its 16 member-owner cooperatives as it had in recent years.

“But you will see money coming back from your cooperative, and we’re really glad to be back in that position to be retiring dividends back to you,” he said.

United’s leadership pays close attention to fiscal efficiency in order to keep costs down for its members, Smallwood said. The co-op benchmarks itself against about 40 cooperatives nationwide that are of similar size.

“One of the things that we’re proud of is that we have fewer employees on average than those other cooperatives,” he said. “We serve 465 meters per employee on average, where our like-size group serves 436. What that tells you is that we’re quite a bit more efficient than other cooperatives that are of like size. We do serve internet service, and the majority of the larger cooperatives do not serve internet. So when we pull the electric employees away and just look at the electric system, which is more comparative with those other cooperatives, we serve 554 meters per electric employee compared to the group of 436.  So, we’re quite a bit more efficient from an employee standpoint, and we’re really proud of that because that helps keep costs down for our members.”

Smallwood said United continually reviews its  operations and maintenance expenses to keep costs down. The annual operations and maintenance costs in 2020 was $392 per meter, compared to an average of $408 at other like-sized cooperatives.

The cost of a United member’s bill can be broken down to approximately 80 percent wholesale power costs and 20 percent distribution costs that cover United’s costs to deliver power to that member, he said.  Following the bankruptcy, United signed a three-year contract with Constellation Energy to stabilize the fluctuating wholesale power costs from Brazos that plagued members when prices skyrocketed last year.

With the October Rate Watch comparison, which was featured in the November Texas Co-op Power magazine, United is still at 14.17 cents per 2,000 kwh compared to 14.3 cents for the Oncor’s retail electric providers’ average.

“So, you know the value is there,” he said. “While you’re paying more than you have in the past, we’re still very competitive and actually cheaper than the Oncor REP average right now. And we have been for the last several months. Our goal as we go forward is to review all options for power supply.”

United’s high-speed internet recently reached more than 20,000 subscribers, Smallwood said, and that number occurred in record time since the initial project began in May 2020.

Though the cooperative continues connecting  internet  service at record speed, officials made a modification to the original five-year plan proposed to complete the initial build-out. Testing of wireless tower equipment slated to serve rural areas failed to provide service as good as fiber-to-the-home. The co-op decided to plan to serve those rural areas with fiber instead, which will delay the initial plan by a few years.

“We’ve been looking for ways to increase the revenue into our projects where we can pay for fiber to go deeper into our rural territories,” he said. “Your board of directors is on board with that and has given us direction to figure out ways to do that. We plan to install fiber to the home. And so to do that, it’s going to take us a little bit longer than what we originally planned. We do need some help with that.”

To help with costs, Smallwood said the co-op is looking into grant opportunities from the state of Texas, as well as encouraging more people in areas that are served to sign up for United’s high-speed internet service.

Members can go to www.ucs.net/internet and check to see if their neighborhoods have enough interest for the co-op to serve areas with fiber-optic internet service. He encouraged those who live in areas that don’t have enough internet to talk to their neighbors and encourage them to sign up for service.

“Just spread the word as to your neighbors if you haven’t already, for those of you using the service, because we’d like to connect more members to the system, so we can get more revenue in order to build fiber deeper in our territory,” he said.