Drayton Valley

REA The Value of Local Ownership

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What is an REA? The Drayton Valley REA is a rural electrification association (REA) providing electric distribution services to power consumers on farms and in rural residential areas. In Alberta, REAs are governed by the Rural Utilities Act and Regulations. Associations providing rural electrification are found all over the world, but in Canada, they are unique to Alberta. The association is a power cooperative that owns an electric distribution system. The business is run by a board of directors elected from and by the membership. The member-owned utility is guided by the seven cooperative principles adopted at the International Cooperative Alliance Congress at Manchester, England on September 23, 1995. REAs are also required to follow all other county, provincial, and federal acts and

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History of Drayton Valley REA In 1954, some forward thinking farmers decided to approach their neighbours to try to get power in the area farms. They talked to Calgary Power supervisor A. J Anderson and in the late fall they held a meeting to form a Rural Electrification Association (REA). Some of those in attendance at the meeting were: Mr. & Mrs. Everett Brandt, Mr. & Mrs. Les Herndon, Mr. & Mrs. Ed Hines, Mr. & Mrs. Les Oscar, Eric Turner, Mr. & Mrs. Willie Dusterhoft, and Mr. & Mrs. Louis William. Each went away from the meeting agreeing to talk to their neighbours to try and convince them to join the REA. In December of 1954, a meeting was held and 25 farmers signed up for power at a cost of $650.00 per service. The motion made by Willie Dusterhoft to call the association Drayton Valley REA was carried. They made application to the government and the association was incorporated in 1955. The first board was made up of Inez Oscar, Eric Turner, Ernie Lindskoog, Willie Dusterhoft, Dave Glen, Louise Williams, and Ed Hines. After a few months, Ernest Whittam replaced Inez Oscar. Eric Turner was elected President and Thelma Herndon was the Secretary. Since then there have been twenty-six individuals who have served as directors on the board and six secretaries. Initially, the directors served as volunteers and the secretary received $75.00 annually. Currently, the secretary and directors are paid a modest honorarium. Over the years, the REA has built the Deposit Reserve

Account to be able to pay dividends of $100.00 to each

member in 1967 and $500.00 to each member in 2005.

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Drayton Valley REA Major Highlights as Owners of the Drayton Valley Rural Electrification Association:

• As members of the Drayton Valley REA you own the REA like you own your farm.

• You have an investment in the system that is yours.

• As a member-owner you have a vested interest in the capital assets of the REA and there are financial implications of being a member-owner.

• The Drayton Valley REA board is the regulator; therefore, the REA board determines rates, terms & conditions, etc. for their members.

• You have local ownership and control of the electric distribution system.

• You can contract out your daily business operations to another REA.

• REAs have the ability to control their REA business direction based on members’ needs.

“Our REA” - The Value it Provides to Our Membership

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• The REAs through past interventions before the

AEUB—now the Alberta Utilities Commission (AUC)—have significantly influenced utility rates to rural residential and company farm customers as well as REA rates for many years.

• REAs are a benchmark to keep competition honest.

• REAs generally work together through the Alberta Federation of REAs for a strong, unified voice for members REAs and the Federation monitors the electrical industry to keep members informed about issues: from the latest technological innovations to political decisions that affect the REA’s ability to effectively deliver rural power.

• Your REA is a community asset with strengths that can be leveraged for your benefit.

• The REAs may be small but they are well-recognized by many large stakeholders in the province including the government.

• Members have a voice in the future of the REA. Your heritage will remain intact.

• REAs have a strong commitment to community. • REAs represent all rural consumers.

The Value it Provides to Our Membership – “the Owners”

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This is where a rural electrification association fits into the big power picture in Alberta. REAs service rural farm and rural residential members.

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Rural electrification association , who maintain their own operational systems also maintain and own distribution substations in rural areas.

Source: The diagram above is provided courtesy of the Alberta Electric System Operator (AESO) and is reproduced in this booklet with their permission. More information www.aeso.ca

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Drayton Valley REA Board of Directors

• REAs are regulated by their Board of Directors not the AUC or other government regulatory bodies. • The REA Board does not need the approval of the Alberta Utilities Commission. • The REA board is the regulator; therefore, the REA board determines rates, terms & conditions, etc. for their members. • Utilities companies such as ATCO Electric/ FortisAlberta are regulated by the AUC and have to apply to them for approval of rates, terms and conditions, etc. • The Drayton Valley REA Board of Directors manage the business affairs of the REA and have DIRECT control and input over day to day operations of their system. • Foothold into the industry:

• window to AUC hearing process • window to Provincial Government

• New business opportunities due to deregulation • Ability to play a role in the future of the electricity

industry by providing feedback to Government and industry stakeholders

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• The Board manages the organization’s affairs as you

would your own business. • The Drayton Valley REA board directs the day to day

activities of the association and is responsible for planning future capital projects, operation and maintenance projects, and all other necessary contracts for the benefit of the REA members.

• The board reviews all forecasts for projects by looking at cost efficiencies, etc.

• The Drayton Valley REA board is a key player for various programs brought forward, government legislation, position papers review and input.

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Future of Your REA

• Over many years your Board of Directors has been

actively involved in learning about the changing

industry structure and are making decisions based

on their knowledge and what is in the best interest of,

you, the member.

• REA members have a significant and unique voice

with government, legislators, and utility companies.

• Your interests as a member and consumer are

represented at Alberta Utilities Commission (AUC)

hearings.

• REAs have the ability to control the REA business

direction based on members’ needs.

• Your heritage will remain intact.

• REAs may be small but are well recognized by

stakeholders and the government

As Alberta is still in the deregulation mode and still restructuring the electricity industry, now is a time when you need to preserve and use that voice. REAs through interventions before the Alberta Utilities Commission (AUC) have significantly influenced utility rates for rural residential and company farm customers.

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Rural rates would likely be higher were it not for the REAs and their influence. Although not in competition with the utility companies, the existence of the REAs and their rates has served as a point of comparison for the utility companies when seeking rate increases. While several REAs run all of their operations, including hiring linemen and other employees, most operate through contracts with the area utility company. Never-theless, REAs can still choose to undertake some of their own operations. This includes issuing tenders for building new services and for rebuilding their own lines. REAs also have the option of contracting out for pole testing and brushing services and this opens the door to choice.

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Alberta Federation of REAs (AFREA) Ltd.

#100, 115 Portage Close Sherwood Park Alberta T8H 2R5 Email: communications@afrea.ab.ca

http://www.afrea.ab.ca

AFREA © 2019—This booklet is produced and distributed for information purposes.

Rural Electrification Associations (REAs) are an important part of Alberta's history.

Today, REA power distribution co-ops still provide efficient and cost-effective rural electric distribution services to their member-owners.

The Alberta Federation of REAs (AFREA) represents member REAs who provide rural electric distribution services throughout the Province of Alberta. The AFREA is committed to promoting the economic welfare and value of its cooperative membership by providing strong representation and advocacy to government and industry stakeholders . Our vision is your vision:

“Innovative & Dynamic Rural Electrification Associations as part of a Vibrant Rural Alberta Community”

Contact Information Mailing address: P.O. Box 5284 Drayton Valley, AB T7A 1R4 Email: draytonrea@gmail.com Phone: 587-673-0700 or Find us on Facebook https://www.facebook.com/DraytonREA/