Southwestern Electric Cooperative

To join NICE click here.

The Big Idea!
NICE offers cooperative solution for non-co-op members

In his famous manuscript, the ancient Greek philosopher Plato called “necessity… the mother of invention.” In other words: out of our greatest needs, arise our greatest ideas. And your cooperative is at the center of one such idea that just might be the biggest thing to hit the Illinois power market in quite some time. It’s called New Illinois Cooperative Energy (NICE).

Launched on October 1 as a not-for-profit subsidiary of Southwestern Electric, NICE will provide electricity to consumers across Illinois on a cooperative basis. Membership in NICE is available to residential, commercial and industrial customers, except those served by an electric cooperative or closed municipal power system. This landmark not-for-profit power supply opportunity has never before been offered to the general public in the United States.

The idea behind NICE came from a group of Illinois citizens concerned by massive rate hikes by for-profit utility companies. In 2007, this group, which included governmental, labor, and business leaders, gathered around a coffee table in Peoria and came up with a better way for Illinoisans to purchase energy.

“We realized that the only way that residential customers are going to achieve better rates in a deregulated market is by banding together,” says State Senator David Koehler, a Democrat who represents the Peoria area. Koehler, along with a labor union president named Rick Doty, an independent business owner named Joe Berardi, and a retired union laborer named Dave Durbin, decided to form an electricity supply company that would allow customers of for-profit utility companies to buy energy cooperatively. With a big idea in mind, all they needed was an innovative partner to make it happen.

They approached leaders of Southwestern Electric Cooperative, which has a 70-year track record of accomplishing exactly what NICE hopes to achieve―using the collective purchasing power of consumers to help secure better electricity rates for each of them.

“Southwestern Electric Cooperative was born from an idea much like this one,” remarks Alan Libbra, Southwestern Electric’s board president who will also serve as board chairman for NICE. “Back in 1939 when our co-op was formed, rural folks needed electricity; the for-profit sector wasn’t bringing it to them, so they mobilized and made it happen on their own.”

In order to offer a buying-group membership statewide, NICE leadership selected Integrys Energy Services (Integrys), based in Green Bay, Wis. Integrys, which offers natural gas and electric power to non-regulated energy markets in the United States and Canada, will take on the financial risk associated with providing electricity to NICE members.

By joining NICE, Illinois consumers will benefit not only from their collective purchasing capacity, but also from the power supply management expertise of Southwestern Electric.

“The average consumer doesn’t have the information or resources at his or her disposal to fully evaluate an energy-purchasing decision,” says Joe Berardi, CEO of NICE. “The energy price you pay should represent the product of multiple decisions made not only on what price is available on a certain day, but also on forecasted prices. That’s what NICE will provide to its members—proactive price management.”

NICE officials are confident that their method of power purchasing, combined with the organization’s not-for-profit structure, will allow members to experience significant savings on their electricity bills over the long haul. However, they cannot guarantee with absolute certainty that NICE members will save money, which could be a sticking point with some potential customers.

Still, NICE’s tremendous potential is generating plenty of excitement, enthusiasm, and media attention around the state. NICE was unveiled to the public on October 8, just days after a $162 million Ameren rate hike went into effect. NICE officials held press conferences at the State Capitol in Springfield and the United Auto Workers Local 974 Hall in Peoria, to announce the inception of this landmark program.

“I’m confident that we can manage this, and that over the course of 12 months, we’ll be able to save folks money,” Alan Libbra told reporters. “I wouldn’t be here today if I didn’t believe that. We just need consumers to give us a chance to show them what we can do.”

Sen. Koehler, who will also serve on NICE’s board of directors, agrees.

“If you ask consumers if they would rather buy energy from a company that tries to make as much profit as possible, or get their power from a not-for-profit, I think most would prefer the latter,” he remarks.

AmerenIP customers Jack and Carol Lampee, who live in Maryville, are a perfect example. The Lampees were thrilled with the notion of getting their energy through a cooperative, and were among the very first people to join NICE.

“I have a lot of friends who live on Southwestern Electric’s lines and they’re very satisfied with how the co-op operates. In the past, I had inquired about getting my power through the co-op too, but because of where I live, I wasn’t eligible,” says Mr. Lampee. “A few weeks ago, my friends came back from your annual meeting and told me about this new program that would allow folks like me to get power through the co-op as well. So I jumped on it right away.”

Here’s how the program works: To become a member of NICE, Illinois families and businesses will pay a small monthly membership fee, which entitles them to participate in the electricity program and to a non-voting membership in the cooperative. True to its cooperative-style business model, NICE will return any excess margins to the members after paying its operating expenses. In order to receive electricity from NICE, potential customers must sign a five-year contract.

At least 7,000 customers in Ameren’s service territory and 7,000 in ComEd’s service territory must enroll before the electricity can begin flowing to their respective areas. These members can begin receiving electricity from NICE in early 2009 for Ameren customers and several months later for ComEd customers. Illinoisans need not purchase electricity from NICE to enjoy the benefits of membership. Every NICE member is automatically enrolled in the Co-Op Connections program, which allows them to save on select products, services, and prescriptions – locally and nationally.

Members of Southwestern Electric Cooperative will also benefit from NICE in a number of ways. First and foremost, the cooperative will use NICE to sell off the excess electricity it previously purchased from the Plum Point Energy Station in Arkansas.

“When all the excess from Arkansas comes online in 2010, our co-op has to pay for that power regardless of whether we use it or not,” remarks Kerry Sloan, CEO of Southwestern Electric Cooperative and president of NICE. “NICE membership fees will also help generate revenue for our co-op, which we’ll use to help keep the electricity costs that our members pay as low as possible.”

Members of Southwestern Electric Cooperative can play a major role in the success of NICE.

“The more people that join NICE, the better rates we can secure for them. And the more successful this subsidiary is, the better off we all are,” adds Sloan. “So we’re going to depend on our members to tell others about NICE by word-of-mouth.”

Ameren customers like Jack Lampee are excited about it.

“I can’t wait for this program to get off the ground,” he says. “I’ve always heard good things about the way co-ops operate. That’s why I’m choosing to get my electricity from someone other than a big business that’s only in it to make money off people like us.”

Until the first electrons begin flowing down the line and NICE members start saving on their electric bills, NICE is more conceptual than concrete.

“Right now, it’s an idea,” says Sen. Koehler. “But one with big potential.”

To join NICE click here.