Farmers RECC
A Unique Propane Partnership
A South Kentucky Electric Co-op Moves Into the Propane Gas Business
October 1997
Last month I
wrote a feature story on some of the new and different ways electric
utilities are doing business, as they prepare for a higher level of
competition. A few days ago I ran across a notable example of an
innovative venture of an electric co-op in southern Kentucky.
Farmers Rural
Electric Cooperative, headquartered in Glasgow, is getting into the
propane gas business. In August the co-op, which serves 19,360 homes
and business in eight counties, announced a partnership with a major
propane company based in Tulsa, Oklahoma. Another Kentucky electric
co-op, Shelby Energy Cooperative in Shelbyville, announced a similar
propane arrangement this summer.
In one way that’s
not so unusual. Louisville Gas & Electric supplies both
electricity and natural gas, as do several utilities around the
country. But electric co-ops have traditionally focused exclusively
on providing electricity.
The president and
chief executive officer of Farmers Rural Electric Co-op sees the
step as a natural progression.
“We’ve been
in the energy business for 60 years,” says Jackie Browning. “We’ve
just focused on electricity.”
Browning says
that in a strategic planning session a little over a year ago, the
co-op decided that providing a propane service would be a good
match: a number of people in the area seemed interested in propane,
the co-op was anticipating a new, more competitive business
environment that might call for meeting a wider variety of consumer
energy needs, and the co-op felt it could provide an affordable,
high-quality service for the people in the community.
“We still feel
that a high-efficiency electric heat pump is an excellent way to
heat and cool the home,” says Browning, “but a lot of people
just like gas heat. We are now offering different fuel solutions.”
In the time since
that strategic planning session, the not-for-profit electric co-op
and its power supplier, East Kentucky Power Cooperative, formed a
for-profit subsidiary called Farmers Energy Services Corporation.
Farmers Energy Services and the Thermogas Company of Tulsa formed a
partnership, Farmers Thermogas of Southern Kentucky, to market
propane gas products and services.
Two weeks after
announcing the partnership, the subsidiary already had 65 customers,
and Browning expects that to continue growing. He says Farmers
Thermogas can offer flexible payment options, emergency 24-hour
service, seasonal price guarantees, and the reputation for safety,
service, and quality that Farmers Electric has become known for over
the decades.
“We think we
can save customers money in meeting their propane needs,” says
Browning. “We can provide better service, we’re a locally owned
company, and profits from Farmers Thermogas will benefit the members
of Farmers Rural Electric Co-op.”-Paul Wesslund |
