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Electric and Telecom Cooperative Mergers

Mergers of electric cooperatives are nothing new.  Over the years, several mergers have occurred, mostly for the purpose of consolidating business functions and generating savings for members.  For example, currently DS&O Electric Cooperative and Rolling Hills Electric Cooperative, both located in Kansas, are considering a merger.  Such mergers often do not result in decreases in electric rates, because cooperatives typically already have long-term arrangements in place with their G&T or with third-party suppliers. Savings are most often achieved in the areas of human resources, IT, insurance, accounting, and legal fees.  On the basis of such savings, as demonstrated by extensive studies and a 10-year financial forecast, two cooperatives in Texas – Humboldt County REC and Midland Power Cooperative – recently decided to seek approval of merger from their members.   Of course any proposed merger must take into account complex issues such as tax considerations, regulatory issues, member relations, the effect on employees, management and the Boards of Directors, and financing and credit.Read More »Electric and Telecom Cooperative Mergers