The two cooperatives had announced in February they would take initial steps to investigate possible financial, environmental, technological and customer service benefits through consolidation. But on Oct. 26, the co-ops have announced a suspension of review of a potential consolidation.
“There are several issues regarding rates and costs that will be difficult to resolve in the short run,” DMEA General Manager Dan McClendon said in a statement released to The Watch. “However, circumstances and our industry continue to change, so we’ll continue to periodically review these issues and look for ways to benefit both cooperatives’ members over time.”
It remains unclear what the specific issues regarding rates and costs are, as efforts to reach both co-ops’ representatives were unsuccessful as of press time.
Both electric cooperatives plan to continue cooperating in the promotion of energy efficiency measures and local renewable energy developments along with their mutual power supplier, Tri-State Generation and Transmission Association, the Governor’s Energy Office, and other organizations.
“There may be shared service opportunities that could cut costs for both co-ops that emerge more quickly than could a full consolidation,” said Kevin Ritter, SMPA’s general manager. “Both of our co-ops are committed to identifying any efficiencies that would benefit our members.”
When the rural cooperatives decided to investigate a possible merger back in February, initial figures calculated by a consultant pointed to the notion that a consolidation could save both energy providers money. At the time, SMPA Board President Wes Perrin said there have been over 80 instances where rural electric co-ops have consolidated since 1980 and that growing into one large co-op may be a natural step for SMPA and DMEA. For now, though, that doesn’t seem to be a reality.
Both associations were formed in 1938 following the passage of the Rural Electrification Act at a time when electricity was available in urban areas only. Decades ago, each association successfully integrated new member-customers through mergers/acquisitions.