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 During the
early 1930's many of the conveniences that we generally take for granted
were not available to most people living in rural America. Electricity
generally was not available to rural citizens. There were no electric
motors, so feed and grain was shoveled by hand. Hay was also pitched
by hand. Dairy farmers did their milking by hand in the dim light
of a flickering kerosene lantern. There was no refrigeration, so the
milk had to be kept on ice. On the milk pick up day, the milk cans
were carried out to the road. However, if the pickup was not on time,
the milk would become too warm and the farmer would watch his long
hours of labor result in nothing gained.
The farm wife
also struggled through her days without electricity. Without running
water, there were endless buckets of water to be lugged from a deep
well or maybe a spring. Kitchen work frequently involved laboring
over the searing heat of a wood stove. Whether it was the long hours
of canning fruits and vegetables, wash day, or ironing with the six
to seven pound wedge of iron, the wood stove had to be burning, often
making the kitchen almost unbearably hot.
On May 11,
1935 President Franklin D. Roosevelt created the Rural Electrification
Administration (REA). This agency became the primary source of low
interest loans that would help bring electricity and a better life
to rural America.
During the
late 1930's rural electrification was building steam in Kansas. Early
in January 1939 farmers living in the Plevna area decided to try to
form a new REA Cooperative in rural Rice and Reno Counties. Following
a meeting with the REA field representative the first organizational
meeting was held on the night of February 7, 1939 at the Mennonite
schoolhouse, in Walnut Township in Reno County. The temperature hovered
near zero, but the schoolhouse was packed with enthusiastic people.
At the conclusion of the meeting, blocks of territory had been outlined
with teams consisting of two men, each being assigned to an area.
Each block consisted of an area 1 mile wide by 8 miles long. The goal
for each team was to interview every resident in each block of territory.
George Sidwell, the Rice County Agent, and Don Ingle, the Reno County
Agent, were very instrumental in signing up new members during the
early years.
Joseph Fliginger
was the first man to sign an application and in two days applications
were coming in rapidly. Organization continued and the Ark Valley
Rural Electric Cooperative Association was incorporated. The Articles
of Incorporation were filed on March 16, 1939 designating Plevna,
Kansas as the principle place of business. A board of directors was
named consisting of these men: George Griffin, Nickerson, President;
Ed Flickinger, Sterling, Vice-President; Darrel Dunn, Langdon, Secretary;
Clarence Fox, Sterling, Treasurer; E. E. Birkey, Plevna; Melville
Davidson, Plevna; and Luther McMurphy, Sterling. Rupert G. Martin
was selected as counsel for the cooperative.
On May 19,
1939 the first loan from REA was received in the amount on $251,000.
This was to build 300 miles of line to serve 629 customers. This was
later amended to add another 113 miles of line for 162 customers.
Finally on
Thursday afternoon, November 23, 1939 the first pole was set. Appropriately,
this pole was set by the Mennonite schoolhouse where the first organizational
meeting was held.
Power lines
spread across the countryside and on May 17, 1940 the first lines
were energized. A big celebration was held in Sterling to commemorate
the occasion. On May 9, 1940 the Sterling, Kansas Bulletin published
a special edition that was sent to each of the 1,360 cooperative members.
A cordial invitation was extended to attend a big barbecue at Sterling
Lake with family and friends, with the thought that at least some
of those would be able to go home to do their milking and chores by
electric light. It truly was a day for celebration.
A budding
organization, the board established the first permanent office in
the Zimmerman Building, 210 South Broadway in Sterling. The board
also hired A. B. "Jack" Davis as Project Superintendent for the cooperative.
In preparation for energizing the lines the first rate schedule was
adopted. The rate was as follows:
First
40 kWh, or less, per month
Next 40 kWh per month
Next 120 kWh per month
Over 200 kWh per month |
@
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$3.50
per month
.05 per kWh
.03 per kWh
.0175 per kWh |
An agreement
was also signed to buy wholesale power for the cooperative from the
municipal power plant in Sterling.
In those early
days it was difficult for some people to imagine all the ways electricity
could be used. It was not uncommon for people to wonder how they would
use 40 kWh per month. The records show that there were any number
of members who did not use their 40 kWh minimum each month. In some
cases the yard light was left on all night so that the 40 kWh would
be used.
On May 15,
1940 the board approved the purchase of a new 1 ¼ ton truck with a
winch. The purchase totaled $1,060.00. Subsequently, Harold Bruer
was hired as the first lineman for the Co-op.
While some
people were enjoying the conveniences of electricity, others were
still waiting. The waiting was sometimes difficult and frustrating.
The Co-op
grew rapidly during the first few years. It did not take long for
the people to realize what electricity could do for them and their
usage of this new service is demonstrated in these figures:
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May
1941
1st Anniv. of lines energized |
May
1942
2nd Anniv. of lines energized |
Members
connected
Avg. kWh usage/month
Avg. bill/month
KWh sold (May)
Miles of line energized |
691
82
$4.74
56,885
412 |
1,352
69
$4.60
93,864
919 |
The original
"substation" for the cooperative consisted of bank of 75 kva transformers
located behind the Sterling generating plant. By mid-1941 the capacity
of these transformers was already being pressed, so in September 1941
a new bank of 250 kva transformers was installed replacing the old
bank.
World War
II began making its presence known in mid-1941 as construction materials
became hard to find. Projects were delayed largely due to lack of
wire. During the height of the war, materials were almost impossible
to find and very little system construction was done. In fact, even
the monthly newsletter was ultimately eliminated due to the difficulty
in getting paper.
In spite of
the war difficulties the co-op moved forward. In June 1943 the old
post office building at the corner of Walnut and Sherman in Hutchinson
was purchased as a new headquarters building. In August of that year
the office was moved to Hutchinson.
A new wholesale
power contract for a lower wholesale power rate was negotiated and
signed on February 17, 1944. With the implementation of this contract,
Kansas Power and Light Company became the new wholesale power supplier
for Ark Valley.
When WW II
finally wound to a close, the springs of construction material began
to trickle again. In March 1945 the first two substations, for Arlington
and Sterling, were purchased. By early 1947 line construction was
once again spreading.
The Cooperative
established another "first" for the Hutchinson area in March 1948
when a two-way radio system was installed.
This represented
a significant step forward in improving response time and service
to the cooperative's membership.
Prior to the
onset of REA in 1935, only 10% of the nation's farms had been electrified.
By 1950, only 15 years hence, that percentage had risen to 75%.
The 1950's
started a period of time where much effort was spent on showing people
the many innovations which electricity could bring to the farm. Home
economists with kitchen parties and demonstrations were standard bill
of fare for the day. The response was overwhelming and the kWh usage
outdistanced even the most optimistic projections. Improvements in
the standard of living and overall health of rural citizens was attributed
to electrification. The survival and production rate of livestock
also rose.
During 1953
and 1954 Ark Valley Electric was active in starting the Reno Telephone
Association, a rural telephone cooperative where Jack Davis also was
the original manager. The telephone association was later sold to
the Continental Telephone Company.
A change in
management of Ark Valley occurred in June 1956 when Curtis Stubbs
was promoted by the board to General Manager. Mr. Stubbs had been
a long time employee of the cooperative starting in 1939 as a wiring
inspector. A change in legal counsel also came about in 1956 when
Rupert Martin, who had served the co-op since its very beginnings,
resigned and was replaced by Harry Dunn. The year of 1956 also was
a milestone in that it was the first year that the co-op closed its
books with a positive margin. In accordance with the by-laws, a capital
credit allocation system was set up to allocate the margins back to
the membership.
The 1960's
dawned and a change in the makeup of the co-op was noted in the annual
report. The total number of services had grown to 2,827. Out of that
total, 17% were commercial services, but those commercials accounted
for 30% of the total revenue.
The financial
condition of the co-op improved to the point where in October 1961
the board authorized payment of capital credits to estates. Promotion
of various electrical appliances intensified and included the total
electric, Gold Medallion Homes.
In October
1964 the old headquarters building was sold to the City of Hutchinson
and the co-op in turn bought the present headquarters site at 10 E.
10th Street in South Hutchinson from the Woodie Seat estate. Following
the construction of additional garage and storage facilities, the
move to the new offices was made in May 1965.
April 1968
marked the start of the lowest rates in Ark Valley's history. The
wintertime rate for residential customers was set at 1.0 cent per
kWh for all usage over 1,000 kWh per month. The drop in rates spurred
new growth in kWh sales.
The old trends
seemed to continue, until the 1973 Arab Oil Embargo rewrote the energy
textbooks. Little did the energy industry know how far reaching the
ramifications would extend. For the first time in the co-op's history
there was talk about the need for energy conservation. Inflation drove
up the cost of materials and the wholesale power suppliers piled rate
increases on top of each other. With the vision of having "our say"
in the future cost of wholesale power, Ark Valley joined the Kansas
Electric Power Cooperative (KEPCo) in 1975.
New terms
such as Load Management, Peak Demand, Energy Audits, etc. became regular
parts of our vocabulary. Then in the late 1970's two federal laws
were passed that affected Ark Valley Electric Co-op. The Public Utilities
Regulatory Policies Act (PURPA) influenced the sales picture and the
Power Plant and Industrial Fuels Use Act affected the wholesale power
cost picture.
The PURPA
was an effort by the federal government to make American citizens
more energy conscious. The oil embargo of the early 1970's had shown
America that it had to become more energy independent. The PURPA essentially
banned the promotion of the use of energy and initiated an extensive
energy conservation plan. It also encouraged state regulatory agencies
to change rate design to discourage electricity use. The regulatory
agencies essentially forced the cooperative to abolish the "more you
use, the cheaper it gets" rates and implement the type of rates we
have today. This action was very detrimental to a number of loads
that the co-op had worked very hard over the years to develop.
The Power
Plant and Industrial Fuels Use Act (PPIFUA) required that power plants
and industry restrict the use of oil and natural gas for fuel and
move toward the use of coal-related sources of energy supply. As generation
plants converted to coal, huge amounts of natural gas were available
in the market place. The predicted natural gas shortage never materialized
and in 1986 the PPIFUA was essentially repealed by Congress. It was
too late, however, to reverse many of the act's damaging consequences.
Effective
January 2, 1979 Delbert Tyler was hired as General Manager of the
cooperative following the retirement of Curtis Stubbs. Mr. Tyler came
to Ark Valley with previous experience in rural electrification at
Panola-Harrison Electric Cooperative, Marshall, Texas and Eastern
Power Cooperative, Paxton, Illinois. Later in January 1979, Richard
A. Benjes was named as the new attorney for the cooperative.
A side effect
of the rise in foreign oil prices was that the price of domestic crude
also rose to new highs. The unprecedented high price of crude oil
made many marginal stripper wells economical to produce. During the
early 1980's many of these wells were connected to Ark Valley's system.
Frequently these installations had a high horsepower requirement and
portions of the system had to be rebuilt in order to handle the load.
For the next several years numerous improvements were made throughout
the cooperative's electrical distribution system in order to improve
service reliability and meet the demands for electric power. The new
system improvements were at more costly construction prices, and Ark
Valley’s cost of electric distribution lines escalated dramatically.
Ark Valley’s total investment in electric distribution systems grew
from $7.4 million in 1979 to $16.9 million in 1986. Interest rates
paid on that investment more than doubled with changes in the REA
program. And the cost of wholesale power mushroomed greatly as KEPCo’s
share of Wolf Creek Nuclear Generating Station came on line.
In 1986, world
oil prices came crashing down. Many of the marginal oil leases were
no longer economical to produce at the lower crude prices. While the
lower crude oil prices have been beneficial to some areas of the U.S.
economy, the depths to which the price dropped has had a very negative
impact on the kWh sales of the cooperative. So while Ark Valley’s
costs had been highly escalating, Ark Valley’s energy sales were decreasing,
and there were fewer sales units over which to spread the costs.
A highlight
for 1988 came when the board authorized the first general refund of
capital credits in the cooperative's history. Capital credits that
had been allocated in 1956 through 1959 were refunded and checks totaling
over $143,000 were written. In addition, settlements were made with
numerous estates. Since 1988 the following refunds of capital credits
have been sent out to the Cooperative’s members.
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|
General |
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Estates |
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005 |
$ |
34,000
45,000
249,000
297,000
523,000
392,000
438,000
417,000
437,000
|
$ |
35,000
31,000
27,000
22,000
27,000
32,000
17,000
29,000
74,000
60,000
48,000
48,000
55,000
79,000
45,000
45,000
83,000
|
| Totals |
$ |
2,832,000 |
$ |
757,000 |
In
1992 Kansas changed its regulatory laws to allow cooperatives’ members
to vote their cooperative out from under the regulation of the Kansas
Corporation Commission. Regulation by the KCC had very high direct
costs of annual State KCC expense assessments, burdensome monthly
and annual reporting requirements, legal fees, and consultant fees
for dealing with the KCC, as well as the indirect costs of KCC policies
that were contrary to the interests of Ark Valley’s members and rate
payers. In early 1993 Ark Valley’s members deregulated Ark Valley,
by 76% of those voting in a mail ballot, and on February 22, 1993
the Cooperative was officially deregulated by KCC order. As the Cooperative’s
elected Board of Trustees took over regulation of the Cooperative,
the members were proven to be right in their decision to deregulate,
because rates have not been increased since 1986, financial results
have improved, and capital credits have been paid.
A change in
management of Ark Valley occurred February 12, 1996 when the Board
promoted Bob Hall to be Interim Manager. On July 29, 1996 the Board
promoted Bob Hall to be General Manager. Hall had been Office Manager
at the Cooperative since March 1981, and prior to starting at Ark
Valley, Hall had experience at Kansas Nebraska Natural Gas Company,
the South Dakota Public Utilities Commission, and a CPA firm in Iowa.
In its constant
efforts to become more and better for its customer/owner/members Ark
Valley explored merger ideas with several of its neighboring electric
utilities. Also the Board made new programs and options available
to the members when on April 28, 1997 they approved the Coop-Power
Plus credit card program and the Homeguard surge protection program.
The Coop-Power Plus credit card is a VISA card which gives rebates
including a 3% rebate on any electricity bills charged to the card.
The Homeguard is a surge protection system that abates the damage
of lightening and electrical surges and offers some warranty protection
for appliances if an electrical surge does get past the surge protection.
The Board,
employees, and management of Ark Valley became interested in steel
poles as a way to improve reliability and life of poles. The first
steel pole was set directly north of Kingman on July 25, 1997, and
by 2001 more than 300 steel poles were in service. (It is estimated
Ark Valley has a total of more than 65,000 poles in service on its
2,080 miles of rural electric line serving 4,900 meters in nine counties.)
While the steel poles are higher in price than wood poles, it is expected
they will be much less expensive in the long run.
Ark Valley
Electric Cooperative became a Touchstone Energy Cooperative on April
27, 1998 when the Board authorized participation. Touchstone Energy
is a marketing alliance for the many electric cooperatives across
America. Touchstone Energy Cooperatives have to meet certain standards
to belong, and Touchstone Energy reminds us that if combined together
the cooperatives are the biggest electric utility in the United States.
In the year
1999 the Cooperative had five bucket trucks, two digger derricks,
and one winch truck. In contrast to the winch truck bought in 1940
for $1,060, the Cooperative bought a new digger derrick truck in the
year 1999 at a cost of $127,792. Safety and work efficiency have made
bucket trucks a desirable improvement over pole climbing. (The Cooperative
got its first bucket truck in 1967.)
From the start
in 1939 the reason for Ark Valley Electric’s existence is still the
same, to efficiently serve its customers. The Cooperative has brought
new technologies to bear on service over the years, starting with
electricity. On March 29, 1999 the Board of Trustees approved one
of the most recent technological advances at Ark Valley, acquisition
of the first automatic meter reading "AMR" devices. The brand name
was Turtles, a power line carrier remote AMR device. The first Turtles
were installed in the Noblesville substation June 2, 1999, and in
the Sand Hills substation May 2, 2000.
Another existing
technology coming into widespread use is the ground source heat pump.
They are called "ground source" or "water source" or "geothermal"
heat pumps because they use the natural constant underground temperature
to help heat and cool the home, resulting in big savings of energy.
Increased use of geothermal heat pumps promise to change the Cooperative
into the future. They will decrease electric load on the summer peak,
which will lower the Cooperative’s wholesale power costs, and those
lower costs will reflect in lower rates to the consumers. While heat
pumps are safer and healthier, the biggest reason more new homes are
going geothermal is the giant savings for cheaper energy costs every
month of the entire life of the house. The lower electric rates for
heat pump customers and rebates for installation are shown in the
rates section of this web page.
So while heat
pump customers start right out saving money on energy, they are also
causing downward pressure on their own rates, which will cause their
savings to be still greater in future years. The increase in the number
of new homes being built in the country bodes well for the Cooperative,
and so does the fact that consumers are discovering energy conservation
through geothermal heating. It is a smart choice for today that will
reap even greater benefits for tomorrow.
Cooperatives
are leaders in using new technology, because of being governed by
consumers. And the old saying that "necessity is the mother of invention"
holds true especially in the country. We can’t predict every good
thing that may happen in the future, but we can predict that consumers
will always be taking advantage of the future through the use of their
Cooperative.
Rural America
would not have had electric service in 1939, nor would they have it
now, if they hadn’t banded together in the Cooperative to build their
own electric lines. The Cooperative is about people banding together
to get something they can’t buy alone, and to get it by collective
bargaining whereby the Cooperative buys wholesale power in a bigger
unit trying for the best price for its members. With possibilities
such as fuel cells being used to avoid expensive new line construction,
the members may very well think of expanded uses for their Cooperative
in the future, but as long as it exists, the philosophy will not change.
The Cooperative will always exist solely to serve its member-owners.
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