Jackson Purchase Energy Corporation

Power for the people┬áThe challenge of maintaining reliable supplies, combined with growing demand for renewable energy while retaining affordable pricing structures for customers, is a delicate balancing act for utility companies. The president and CEO of Jackson Purchase Energy Corporation tells Andrew Pelis how itÔÇÖs done.   One of the business sectors worst hit by the economic downturn in recent times has been utility companies. Kelly Nuckols has been president and CEO of Jackson Purchase Energy Corporation (JPEC) for the past 12 years and has seen first-hand how the face of power supply is changing.  ÔÇ£WeÔÇÖve seen changes in how businesses are perceived, and with the current financial markets, how businesses are trying to do more with fewer resources,ÔÇØ he says.ÔÇ£In Kentucky thereÔÇÖs an old saying that ÔÇÿthings happen very slowly in Kentucky,ÔÇÖ and weÔÇÖre only now beginning to see the downturn in the economy. WeÔÇÖre actively working with our members to ensure they donÔÇÖt fall too far behind with their billing, and weÔÇÖre working creatively with some of our commercial customers who face other issues because of their revenue streams,ÔÇØ states Nuckols.Headquartered for the last 72 years in offices in Paducah, Kentucky, JPEC serves no fewer than 30,000 members across six counties and has annual revenues in the region of $40 million. ÔÇ£Our core business is providing electricity to 30,000 members, and we buy from Big Rivers Electricity,ÔÇØ affirms Nuckols. ÔÇ£We pride ourselves on efficient utilization. When we started out, we served just three counties, so as weÔÇÖve grown weÔÇÖve expanded into other counties. Our customer base is a little atypical for the standard cooperative. We serve a larger than usual number of commercial and industrial customers, including a large shopping mall [Kentucky Oaks Mall] located just outside Paducah. We try to balance the needs of our residential customers with those of our commercial customers, and weÔÇÖve spent considerable money in recent years on three power stations located near the mall, from which we can utilize switchover options should we lose power from a substation or feeder.ÔÇØ With such a focus on commercial and industrial customers, JPEC sees unusual peak times for energy usage. ÔÇ£Because of members like the mall, weÔÇÖve seen four or five system peaks occurring at weekends or during the holidays, and weÔÇÖve now been able to identify these as high-cost times. This is pretty unusual for power companies,ÔÇØ Nuckols confirms.With such demand, itÔÇÖs a challenge for JPEC to ensure its maintenance work is non-disruptive and that costs are carefully calculated in advance. ÔÇ£We have to be creative in the way we set our business models,ÔÇØ Nuckols continues. ÔÇ£The worst position we could be in would be to not have enough infrastructure. WeÔÇÖve seen manageable customer base growth in the region of two percent, and the timeframe to build fits within our predictions for maintenance. ÔÇ£One of our biggest maintenance tasks is tree trimming to maintain rights of way; we spend around a million dollars a year on that. We also spend a lot of time and money installing animal guards to eliminate risks from wildlife coming in contact with energized lines. While our maintenance team will work on everyday issues throughout the week, every Friday they are dedicated to systems maintenance.ÔÇØInformation technology plays an increasingly important role in JPECÔÇÖs operations, as Nuckols explains. ÔÇ£IT has become very integral for us, in terms of both billing and customer service. Our IT has now expanded to include an automated mapping system that helps us better manage outages and has an interactive response mechanism. We also now have the capability to contact customers and leave an automated message to forewarn them of maintenance work. WeÔÇÖre trying to be proactive using technology.ÔÇØ Most recently, 2009 has seen the introduction of automated meter reading across JPECÔÇÖs customer base. The project was finally rolled out to all members following an 18-month pilot scheme. ÔÇ£The initiative was a joint venture with the vendor,ÔÇØ assures Nuckols. ÔÇ£Our board saw it as a positive move, and the full change-out began in January this year. Automation will save money in a number of ways, providing better information on customer consumption patterns, meaning weÔÇÖll be better placed to adjust pricings in the future. WeÔÇÖll also be able to respond better to billing inquiries by showing each member their usage profile.ÔÇØBecause JPEC is located in Kentucky, itÔÇÖs regulated by the Public Service Commission, and all rate adjustments have to be adjudicated through them before they can be passed on to the members. Nuckols is proud to state that last year was the first time in 12 years that prices increased.Along with ongoing maintenance, one of the areas JPEC is increasingly turning its attention to is the environmental impact of energy supply. ÔÇ£At present, roughly 97 percent of our purchased power is coal-generated,ÔÇØ Nuckols explains. ÔÇ£We also use hydro power and offer customers the opportunity to elect to use renewable energy, which is produced by a local paper company that burns waste wood. We recently had our first inquiry from a member wanting to install solar power, and I think that as people become more conscious of their carbon footprints, this will trickle down to our customers and weÔÇÖll need to be ready for a big energy-efficiency initiative. We certainly recognize that thereÔÇÖs a whole lot more we can do. ÔÇ£WeÔÇÖre also planning to renovate a number of substations, if the economy makes this viable, and we aim to meet ever-increasing requirements; weÔÇÖre recycling and reusing old equipment whenever possible.ÔÇØSo what does the future hold for JPEC? ÔÇ£Our future, like our past, is always rooted in our people, and we have a tremendous set of employees. The success we enjoy is due to our people and their willingness to go the extra mile. Today we have 81 employees, many of whom have been with us long-term. WeÔÇÖre doing a much better job now screening to get the right person ÔÇÿon the bus,ÔÇÖ and we hire for attitude and train for aptitude,ÔÇØ states Nuckols.JPEC celebrates its 75th anniversary in a few years, and through the efforts of NuckolsÔÇÖ team, excellent customer service, strategic maintenance, sensible pricing and careful investment, itÔÇÖs in good shape to power KentuckyÔÇÖs communities into the next century. ÔÇô Editorial research by Jim Rose┬á