News

News

November 09, 2012

Sale Improves Reliability of Oakley Electric System

In 2005, the city of Oakley’s electric system was showing its age. Growing demand from the city’s 1,300 residential and business customers strained the 95-year old utility, and voltage fluctuations and outages were common. The city’s small electric crew was constantly battling outages caused by harsh prairie winds, ice storms, and overhanging tree limbs. “When storm clouds would form to the west, my wife was in the habit of getting the candles out because you knew an outage was coming,” said Mark Watkins, Oakley resident and owner of Heartland Foods there, and in five other Kansas and Nebraska cities. “Power would surge up and down… We were having lots of brownouts, which were costing a fortune because they were killing the compressors in our freezers.”City officials and businesses began talks about upgrading its electric system with Midwest Energy, Inc., an electric and natural gas cooperative in Hays, which already provided natural gas service to the city. Concern over bond issuance or raising rates to cover rebuild costs changed the discussions to talks of an outright sale.Frank Munk, who served as Mayor of Oakley from 2003-2009, recalled lengthy discussions before the purchase. “There was concern about jobs -- whether Midwest would lay off the city crew, and if they would provide the services they’d promised –rebuilding the system and improving reliability,” Munk said.Midwest Energy held a series of town hall meetings in Oakley, telling residents it would rebuild the distribution system, improve reliability, and lower electric rates. In the fall of 2005, the citizens of Oakley voted 7 to 1 to allow Midwest Energy to purchase the system.On Nov. 28, 2006, the Kansas Corporation Commission approved the $2.5 million purchase, making Oakley’s the largest sale of a municipal utility in Kansas in 40 years.Since 2006, Midwest Energy has spent $2.6 million replacing 13 miles of transmission and distribution line throughout the city, along with more than 800 poles and 300 transformers. A new 5000 kVA substation was built in 2007, stabilizing voltage for lines running throughout the city.Midwest Energy has also increased its footprint in Oakley, purchasing a large building near the city’s downtown that serves as office, warehouse and garage for a four-man electric crew and two-man gas crew. Midwest Energy brought three new electric linemen positions to Oakley, as the city’s three-man electric crew took positions with other city departments.Today, outages in Oakley are rare. Customers also pay lower rates. In 2006, residential customers were paying 11.6 cents per kilowatt-hour for electricity; today, they are paying 10.7 cents. But for some, quick response to service calls is most important.“I had a leaking transformer behind my store. Within an hour of calling it in I had three trucks on the scene, putting a new one in,” Watkins said. “Consistent service and reliability are critical to us. I’m very comfortable having them as our electricity provider.”Midwest Energy has also continued traditions started by the city crew. Midwest Energy crews use their bucket trucks to hang the city’s Christmas decorations free of charge each year. The company has donated thousands of dollars to community groups, ranging from the public library and local historical society, to 4H, Big Brothers and Sisters, and youth educational groups.“From a community perspective, Midwest Energy has been a great neighbor,” noted Watkins.“Bottom line, [Midwest Energy] lived up to their promises. They’ve increased employment, improved service and are re-building the system like they said they would,” Munk added.“In 2006, I had inquiries from other towns, saying we were crazy to give up control of our electric system, that we’d be sorry,” Munk said. “Well, we’re six years into this, and I haven’t been sorry yet.”

Mark Watkins, owner of Heartland Foods in Oakley, calls Midwest Energy
Mark Watkins, owner of Heartland Foods in Oakley, calls Midwest Energy "a great neighbor" for improving electric reliability in Oakley.
Midwest Energy line crews from Oakley, Colby and Sharon Springs combine to replace poles behind a church at Center and 4th in Oakley. Since 2006, Midwest Energy has replaced more than 800 poles and 300 transformers to improve reliability for customers in the city.
Midwest Energy line crews from Oakley, Colby and Sharon Springs combine to replace poles behind a church at Center and 4th in Oakley. Since 2006, Midwest Energy has replaced more than 800 poles and 300 transformers to improve reliability for customers in the city.

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