On Monday, October 17th, Fall River Electric’s Board of Directors met to continue discussions regarding a possible consolidation with Lower Valley Energy based in Wyoming. As has been previously reported, Fall River and Lower Valley Energy commissioned two consolidation studies, one done by CFC and another prepared by EES. Lower Valley authorized E3 to conduct an additional study on the potential consolidation. The studies showed there was the potential for considerable savings due to consolidation. The EES study estimated a combined savings of $28.7M over a ten year period, or a savings of $2.9M per year while the E3 study indicated consolidation savings estimated at $31M over a 13 year period with an annual savings of around $2.3M. With those cost savings in mind, a draft consolidation agreement or Memorandum of Understanding (MOU) which outlined proposed terms of consolidation was prepared. It is proposed the new entity would remain a cooperative and members would vote on by-laws and maintain Patronage Capital and equity in their new electric Cooperative.
After several months of study and discussion, the two boards met on September 7th with a facilitator to discuss the terms and processes of consolidating the two Cooperatives. If the two boards could come to a final agreement on a MOU, then the proposed consolidation would be taken to their respective members to vote upon. While the joint meeting resulted in good conversation and agreement in many areas, it has been determined the timing of the proposed consolidation may not be in the best interest of both Cooperatives. Fall River and Lower Valley Energy remain committed to keeping the door open to consolidation discussions and will continue to look for the optimal time to revisit combining these two exceptional Cooperatives.
Fall River Electric CEO/General Manager said, “Although the consolidation effort is on hold, Fall River will continue to be an excellent electric cooperative and propane provider dedicated to serving our member’s needs. We will continue to provide our members with the service they have come to expect and will continue to explore new opportunities to improve efficiencies, reduce costs, and provide valued services.”