WEWAHITCHKA – Although it has been more than eight months since Hurricane Michael left its devastation, the aftermath of the storm continues to affect our area.
The Category 5 storm caused catastrophic damage to Gulf Coast Electric Cooperative’s electric distribution system. After the storm passed, not one meter was turning.
“After the storm passed, we realized that this was going to be more than a ‘restoration’ effort,” said GCEC Chief Operating Officer Francis Hinson. “The damage was so severe that we were looking at a rebuild.
“It took more than 75 years to build this system. It was destroyed in a few hours, rebuilt in three weeks and will take several years to completely fix.”
The cooperative serves electricity to parts of Bay, Calhoun, Gulf, Jackson, Walton and Washington counties. Approximately 2,600 miles of line deliver power to 16,068 members and 20,118 meters in these six counties. Prior to the hurricane, GCEC had 16,517 members and 20,924 active meters.
The cooperative has approximately 75 employees. That number grew to approximately 1,600 when contract crews and mutual aid crews from electric cooperatives across the country rallied together in the nonstop power restoration and rebuild effort that took place during the weeks following Hurricane Michael.
The huge challenge of replacing 349 miles of line began. Additionally, 3,500 poles and 2,095 transformers were replaced.
Hurricane Michael caused more than $25 billion in damages. Gulf Coast Electric’s share equates to more than $90 million.
In order to cover these hurricane-related expenses, the cooperative had to acquire an emergency line of credit in the amount of $75 million from the National Rural Utilities Cooperative Finance Corporation.
GCEC is a non-profit cooperative. As such, it relies on FEMA (Federal Emergency Management) and FDEM (Florida Department of Emergency Management) for reimbursement for large portions of its recovery costs and to reduce the impact of these costs being passed on to GCEC members.
As we have awaited reimbursement, the interest charges on the emergency line of credit have totaled $268,000 monthly. This equates to more than $16 per member per month in interest charges.
Like other utilities impacted by significant storms, Gulf Coast Electric Cooperative had to find an appropriate solution for adjusting rates to cover non-reimbursed expenses.
“Because co-ops are member-owned, we have a board of directors, elected by and from the membership, to represent our service territory,” said GCEC CEO/General Manager John Bartley. “The territory is divided into nine areas, with one trustee elected from each area to ensure that all members are equally represented.
“After presenting all of this information to the board, they had to make the difficult decision to adjust our rates in order to recover a portion of the Hurricane Michael restoration costs. Our rates have not been adjusted since 2012; however, the tremendous expense associated with this storm made a rate adjustment unavoidable.”
GCEC members will begin to see a new line item on their bills: “Storm Cost Recovery.” The revenue collected through this rate rider will only be used for storm restoration costs and will be in effect for a maximum of five years.
This storm rate rider will appear on members’ bills beginning June 28, and the average member will see an increase of less than $9 per month.
The rate rider schedule is as follows:
Rate Schedule Dollars/kWh
General Service Non-Demand $0.0092
General Service Demand $0.0098
Large Power $0.0078
“There is a careful balance between keeping the cooperative financially sound while at the same time impacting our members’ power bills as little as possible,” Bartley said. “Members who have questions about how to reduce their bills may contact us for energy conservation tips. We greatly appreciate everyone’s patience and understanding as we continue to recover from this storm.”