DUNNELL- This week staff members from Federated Rural Electrical Association (REA) replaced electrical meters in the city of Dunnell, replacing the municipal government as the city’s electric utility. Federated REA has absorbed the city’s power transmission infrastructure and 104 metered customers.

The city government had previously purchased power from the co-op wholesale which was then sold to residents. Now Dunnell residents are co-op members and purchase electricity from the utility directly.

Federated REA General Manager Scott Reimer said the co-op will provide improved services to Dunnell residents.

“They didn’t really lose anything, I would say mostly they gained,” said Reimer.

Reimer cited aging transmission infrastructure in the city as a leading reason for the city to make the change.

“They needed to rebuild their system and they just didn’t acquire enough revenue annually to be able to do that” said Reimer.

Another motivation for the switch was a more efficient economy of scale; buying power from the co-op and having a city employee manage the city’s energy infrastructure ultimately became more expensive than having Federated REA manage electrical services completely.

As Federated REA members Reimer said rates will decrease thanks to the co-op’s larger resources and ability to negotiate with multiple providers at the same time.

“Their rates will drop slightly from coming under the co-op. We have the benefit of having multiple power supply contracts so those aggregated rates are much lower than what can be done on an individual basis,” said Reimer.

Unlike many other utility providers, Federated REA is a cooperative not driven by profit wherein customers elect a seven person board which governs the organization with the goal of providing the most affordable and reliable service possible for its members.

“One of our main goals in all of this is to maintain an affordable electric rate. It doesn’t matter if the power’s on or off if you can’t afford it,” Reimer.

Dunnell residents can also begin to receive refunds from the cooperative’s budget surpluses in the form of capital credits.

“It’s an investment in the cooperative, we use the capital over time and once we meet our margins that capital can be given back to the members over time,” said Reimer.

The amount Federated REA pays in capital credits has gradually increased over time. Reimer said the co-op refunds between $1.5 and $2 million each year.

Additionally Reimer noted Federated REA had a larger and more experienced staff of energy technicians who could more rapidly respond to outages, and its customer service primarily connects callers to a human operator, only relying on an automated system during periods when staff members are overwhelmed or unavailable.

Federated REA plans to hold an informational evening forum where residents can learn more about the co-op and its programs at Dunnell City Hall on March 23.

“We’re happy to have them as a part of the Federated family,” said Reimer.

Federated REA currently provides power for the entire city and broadband internet access to a portion of it. Dunnell continues to operate its water utilities and other public services.