Why don't I have choice in electric providers? - CoServ.com

membernewsCEO messageWhy don’t I have choice in electric providers?You may know acoworker or friend wholives in a neighborhoodthat offers them a choiceof electric providers. And,you may have asked thequestion, “Would my billbe lower if I had choice?”Your member-electedboard of directors discussesthis topic regularlyand since they live in theCoServ service area (inyour neighborhoods) theyask themselves the veryMike Dreyspring,same question. ThePresident/CEOanswer, however, is verycomplex ….and may surprise you.Our surveys consistently show that the majority ofmembers would choose CoServ if choice of providerswas offered in their service area. Members also tell usthat stable, low rates are their primaryconcern.We constantly monitormarket conditions and thecompetition to ensure that our businessdecisions support rate consistency.When considering the idea ofproviding choice (that means “optingin” to deregulation), your boardand senior management have a responsibility to do soonly if it is in our members’ best interest.If, through the careful decision-making process, theCoServ board were to decide to opt in, the move wouldrequire a large financial outlay. Meeting regulatoryrequirements could cost millions of dollars, and if theboard made the decision to enter the deregulated market,it’s important to understand the decision is irrevocable.We must be absolutely sure the decision willresult in low rates and reliable service long-term.I also believe there may be confusion over what“choice” really means to a consumer. Because CoServowns, operates and maintains the infrastructure servingyour homes and businesses, it’s important to understandthat we serve as your “wires company” as well asyour power provider. If CoServ were to offer choice byopting in to the deregulated Texas market, you wouldindeed be able to decide who “sells” you electricity, butCoServ would continue to “deliver” your power. As aresult, a portion of your monthly bill would be paid toCoServ to cover delivery costs. With separate companiescharging for delivery of electricity and for electricityitself, it’s tough to determine if offering choicewould actually lower your rates in the long-term.Again, if you had choice in your neighborhood, youwould be able to select the provider who “sells” youelectricity. However, these Retail Electric ProvidersIn fact, CoServ Electric’s scores with the American CustomerSatisfaction Index show that a large majority of our memberswould still choose and trust CoServ as their power provider ifthey had a choice in REPs.(called REPs) buy their power from a small handful ofwholesale power generators who hold market and pricingdominance in Texas. This control over power generationcauses pricing to be non-competitive, and weSee “Why don’t I have choice?” on page 19CoServ Electric www.coserv.com Built to Serve. Energizing Life.SM18 TEXAS CO-OP POWER COSERV ELECTRIC March 2008

“Why don’t I have choice?” from page 18believe it is one reason that deregulationhas not shown positive results.Between 2002 and 2006, electricityrates increased 57 percent in thederegulated Texas market (per theEnergy Information Administration)compared to 23 percent in regulatedstates. And, a number of states thatderegulated their electricity marketshave actually suspended the practice.Given this uncertainty and dysfunctionin the deregulated market, we arehesitant to change the structure of ourbusiness and devote significantresources to an idea that doesn’tappear to effectively control costs andEach year, CoServ Electric sponsorsthe Government-in-ActionYouth Tour Contest. High school juniorsand seniors whose residencesCoServ Electric serves have a chanceto win an all-expenses-paid trip toWashington D.C.The education-study programallows our state’s future leaders ingovernment, business and communitiesto join other teens from acrossthe nation in open discussions withrates for the long run.One thing is certain - being amember of CoServ Electric entitlesyou to receive power as close to cost aspossible. We are owned by those weserve, and we’ve been earning ourmembers’ trust for more than 70years. Today and for years to come,CoServ will focus on delivering reliablepower at a low cost. Rest assured,your elected board of directors willcontinue to explore our options in thechanging electric utility industry.To learn more about CoServElectric, visit www.coserv.com, clickon CoServ Electric Service and selectthe “About CoServ” tab.CoServ Electric sponsors trip to nation’scapitol for juniors and seniorsfederal government and professionalassociation officials regarding currentevents. Students will learn howa cooperatively-structured businessis distinguished from other forms ofbusiness enterprises, and how co-opsimpact our lives on a daily basis. TheNational Rural Electric CooperativeAssociation (NRECA) hosts theYouth Tour activities.The trip includes a visit to the student’sCongressman’s office as well astours of historic monuments, memorialsand the SmithsonianInstitution. The tour group travels toArlington National Cemetery,Washington National Cathedral andto Mount Vernon, home of GeorgeWashington. The students will witnessa wreath-laying ceremony at theTomb of the Unknown Soldier.Students are asked to submit anapplication which contains five shortessay questions:• In terms of personal development,what is your greatest strengthand how has it enhanced your life?• What issue interests you mostabout our government process andwhy?• Of all the political leaders in ournation, past or present, who hasinfluenced you most and why?WATCH YOUROPERATIONROUNDUP ®DOLLARS INACTIONSupporting the cooperative principleof community involvement, the CoServCharitable Foundation used yourOperation Roundup dollars to invest inpublic safety and healthcare. Sinceinception, the Foundation has donated$1,166,575 to 60 different projects in27 communities.Here are the most recent CharitableFoundation donations:• Oak Point Department of PublicSafety - $26,820 to purchase bunkergear• Southwestern Diabetic Foundation- $10,000 for facility and equipmentupgrades and repairs at Camp SweeneyOperation Roundup began inNovember 2005 as a way for members,customers and employees to partnerwith CoServ to enrich the community.Many employees elect to have donationspayroll deducted, and participatingmembers’ and customers’ monthlybills are rounded up to the nearest dollar.The extra change is donated to worthycharitable causes. On average, thedonations add up to $6 a year, but thepennies generated are making a big difference.If you are not currentlyenrolled in Operation Roundup andwould like to participate, please callCustomer Service at 940-321-7800. Or,if you’d prefer to make an individualdonation, please forward your check tothe CoServ Charitable Foundation(Attn. Connie Seymour) at 7701 S.Stemmons, Corinth, Texas 76210.• Explain the difference betweenan electric cooperative and aninvestor-owned electric utility.• Provide a brief explanation ofwhy you would like to be chosen asCoServ Electric’s representative onthe 2008 Government-in-ActionYouth Tour.Applications are judged on cre-See “CoServ Electric Sponsors Trip” on page 21CoServ Electric www.coserv.com Built to Serve. Energizing Life.SMMarch 2008 COSERV ELECTRIC TEXAS CO-OP POWER 19

COSERV MEASURES UP: HIGH SATISFACTION, LOW RATESTexas. And, we’re lower than Direct Energy, Cirro,Commerce, First Choice and Green Mountain.In our view, the significant difference reflects thatCoServ members trust us to provide low-cost, reliableelectric service with outstanding Customer Service. Ourmission is to continue to earn our members’ confidence foryears to come.For more information directly from our CEO/President,Mike Dreyspring, about choice and the cooperative perspectiveon the deregulated Texas utility market, pleasevisit www.coserv.com, click on “Conversations with theCEO” and select the corresponding video.* Satisfaction scores are measured by the American Customer Satisfaction Index.Established in 1994, this index provides a uniform, independent measure of consumerexperience with 190 of the leading corporations in America.CoServ Electric’s customer satisfaction scores consistentlybeat the two largest electric retail providers inTexas - TXU Energy and Reliant Energy. In 2007, CoServearned a score of 74 from the American ConsumerSatisfaction Index (ACSI), while TXU and Reliant receivedscores of only 63 and 65, respectively. Since CoServbegan participating in the ACSI four years ago, we havemaintained a solid average lead over both TXU and Reliant.Over the last 2 years, our rates have been consistentlylower than the two largest electric providers inCoServ GasSafe, secure and dependableCoServ Gas is a young company, oursystem is modern, and we designed itwith safety as first, second, and thirdpriorities. The number of customers inthe CoServ Gas system continues togrow, as does the gas distribution industrynationwide. Though more and morepeople are using natural gas in theirhomes and business, the occurrence ofserious incidents pertaining to naturalgas safety have fallen dramatically.Still, it is critical to be aware of hazardsand take precautions. CoServ’s gasdistribution system adheres to the higheststandards of safety to protect youand your family. To prevent potentialproblems, CoServ Gas conducts regularleakage surveys to patrol the pipelinesystems and observe surface conditions.However, damage by outside forces andchanges in soil conditions could cause apipeline to leak and allow gas to escape.Remember, gas leaks are hazardousand should be reported right away.CoServ Gas has a “zero tolerance” policywhen it comes to gas leaks. We give toppriority to all reported leaks and repairthem immediately.Here’s how to recognize a possiblegas leak: One of many signs of a naturalgas leak is dead vegetation around a gasmeter or other infrastructure which iscaused by the displacement of oxygen.Because natural gas is lighter than air,as it rises into the atmosphere it willagain displace oxygen, which may causea mirage-like movement that can beseen with the naked eye. Another possiblesign of a gas leak can be bubblesupon the ground during (or soon thereafter)a rain event. The most likelywarning is the “rotten egg” smell that isadded to otherwise odorless natural gas.If you suspect a gas leak, contact usSee “Safe, secure and dependable” on page 21CoServ Electric www.coserv.com Built to Serve. Energizing Life.SM20 TEXAS CO-OP POWER COSERV ELECTRIC March 2008

“Safe, secure and dependable” from page 20immediately at our 24-Hour EmergencyNumber: 940-321-7800 or 1-800-274-4014.Since a vast majority of pipelines areburied underground, we use curb markersto show their approximate location.These markers are an important warningof the presence of pipelines in thearea. Federal law mandates the protectionof these markers and forbid theremoval of them. Also, if you or yourcontractor plans to dig deeper than 16inches, state law requires you to call anotification center (1-800-DIG-TESS ordial 811 on your cell) at least two businessdays before your dig. When youcall, a representative will notify companieswho have facilities in the area. Anexception to this would be municipallines. You will need to contact municipalitiesdirectly. Once the companiesare notified of your intent to excavate,they will send a representative to theexcavation location to mark the approximatelocation of the underground facilitiesusing paint and flags.Adding another margin of safety,CoServ installs “excess flow valves” onall service lines to residential meters.These devices are designed to limit gasflow if the service line is damaged. Weare one of the few gas companies in thecountry to voluntarily install excess flowvalves. Federal regulations will soonrequire all companies to use the deviceson new installations or when repairingexisting facilities.Rest assured, CoServ Gas stays ontop of all regulatory requirements andmeets and often exceeds compliancestandards. For additional natural gassafety information, visit us atwww.coserv.com, select CoServ GasService, and click on “Safety.”Sign up for E-Notice“CoServ Electric Sponsors Trip” from page 19ativity, knowledge of the topic andwriting skills. Finalists selected fromthe entries may be asked to participatein an interview about theirapplication.The deadline for applications isMarch 28, 2008. For more informationon the program, visitwww.coserv.com, select CoServElectric Service and click onCommunity and “Government-In-Action Youth Tour.” The essay questionsare listed in this section, alongwith the history of the program anddetails about the trip. Download theapplication from the “Government-In-Action Youth Tour Contest EntryForm” link at the bottom of the page.If you would like to learn moreabout entering the CoServGovernment-in-Action Youth TourContest, please call Dennis Engelkeat (940) 321-7828 or e-mail him atdengelke@coserv.com.CoServ’s online account users cannow sign up for E-Notice – anadvanced monthly e-mail alert thatyour account balance has beenupdated. The update allows you toview/pay your account balanceonline in advance of receiving yourpaper bill in the mail.To sign up for E-Notice, visitwww.coserv.com. On the front pageof the Web site, there is a blue boxlabeled “Account Information,” select“Enter My Account” (if you alreadyhave a CoServ online account) or“First Time User” (to establish a newonline account). The next screen toappear offers the option of subscribingto E-Notice. Click the check boxnext to the account(s), and amonthly E-Notice will be sent to thee-mail address associated with youraccount’s login.E-Notice is the first in a series ofonline enhancements for coserv.com.Thank you for your patience as weimprove your online options.Advantages of E-Notice:• Enjoy convenient, automatedbilling notification• Learn about bill paymentoptions• Prevent late payments• Access past billsBuilt to Serve. Energizing Life.Contact Informationwww.coserv.com940-321-78001-800-274-4014Open Monday Through Friday8 a.m. to 5 p.m.Telephones answered 24 hours a dayBoard of DirectorsJerry CobbChairmanFrisco, District 4Mark GloverVice ChairmanFlower Mound,District 6Vaughn AndrusSecretary/TreasurerKrum, District 1Leon PelzelPilot Point, District 2Clyde GeerMcKinney, District 3Anne VadenCopper Canyon,District 5Curtis TallyJustin, District 7CoServ Vision StatementTo be trusted to consistently exceedmembers' and customers’ expectationsfor safety, reliability, service, value andcommunity support.CoServ Electric www.coserv.com Built to Serve. Energizing Life.SMMarch 2008 COSERV ELECTRIC TEXAS CO-OP POWER 21