Report from the Chairman

Chairman’s Remarks to NOPEC General Assembly
November 9, 2006

Welcome, members of the Northeast Ohio Public Energy Council General Assembly. I’m Joseph Migliorini and it is my pleasure to serve as the Chairman of NOPEC.

At last year’s annual meeting we were at a crossroads. Today I am happy to say that we are moving forward and looking toward a future that will provide your residents with very competitive energy rates for many years to come.

In 2005, we faced the termination of our electricity contract by Green Mountain Energy. This year we continue to provide our customers with a discounted electricity program and we have received a $5 million dollar award from the arbitrator who heard the Green Mountain case that was filed by your Directors.

The Board has operated the organization very conservatively and leanly from a fiscal standpoint, and the proof is in the pudding. NOPEC has over $8.5 million in Star Ohio deposits and zero debt, which is impressive considering there has been no taxpayer or member dollars funding it. And, the 2007 estimated budget is actually a decrease from 2006.

This year we have the difficult problem of determining how to spend $5 million dollars that we didn’t know we were going to have at this time last year. We would be very interested in your feedback tonight. The Board decided yesterday that, in the absence of a consensus this evening, we would follow the policy directive of using the money for the benefit for our electric customers.

What is the best way to do that? There are several options. Two specific that we can think of: 1) Make certain that we can continue to provide a 5% residential discount and a 1% commercial discount through 2008 for our electric customers. Right now we cannot say for certain that the money received from First Energy Solutions will allow us to do that without supplementing with other dollars.

2) There are substantial dollars associated with forming a Certified Retail Energy Supplier. If the Board decides next year to become a CRES, we will need substantial dollars to make that become a reality. We believe that a CRES could be a great investment for the future of our customers. As I said, we will welcome your input tonight under our New Business portion of our agenda.

How about gas? Last year we were not able to trigger a favorable gas price for NOPEC customers. This year we have been able to secure a very good rate for our 186,000 gas customers in the Dominion East Ohio gas area by first securing a $9.70 mcf rate through the Summer and Fall and we were able to negotiate an extension of that rate through the end of the year and secure a $10.12 mcf rate through October, 2007.

And just yesterday the Board approved a gas program with Dominion Retail in the Columbia gas area which we will begin as early as January 1 for 80,000 plus customers at a five month rate of $9.98 mcf, with a favorable adder for 19 months thereafter.

This was good work by our Executive Director, legal counsel and your Board of Directors who, by the way, continue to represent you very well with no remuneration. This is a very dedicated Board and I encourage many of you to become more involved in the future. It is hard work, but very rewarding. By the end of this year, we will have saved our customers in Northeast Ohio $60 million dollars in gas and electric prices. And not one of your communities has had to contribute one dollar to secure those savings.

The results NOPEC has obtained both in electric and gas does prove the original thesis of forming NOPEC; that joining together our enormous customer base in our 120 plus communities not only results in both better prices and terms, but also serves as a competitive force to keep down utility rates in northeast Ohio.

We are in the middle of making an important transition in our organization. In 2005, a study was completed by Kent State University, copies of which are located at your tables. It was recommended in that study that we move from an organization using consultants to one which has its own staff.

We began that process this year, by hiring our first Executive Director Leigh Herington. You can already tell by the estimated budget of 2007, that we are beginning to plan for this transition which will continue through the next year.

We are already seeing significant results by having a person who is dealing with NOPEC business on a day-to-day basis. By consolidating efforts through Leigh, we are saving Directors from having to spend unnecessary time and effort and we becoming less reliant on outside help. Leigh was hired for one year on a half time basis, but I can tell you that he is working much more than that on your behalf, often times seven days a week.

I also want you to know that NOPEC for the first time has its own office. We have rented a house in Macedonia for $500 per month for the next seven months. This is only a temporary arrangement, but it will allow us to consolidate our operation and get NOPEC located under one roof with our own staff.

It would be my hope that we will soon have a full-time Executive Director and the staff necessary to consolidate our efforts. Leigh has already been involved in lobbying and meetings on our behalf in Columbus, negotiations on our behalf, visits to editorial boards and the media, and visits to member communities. He will soon share with you some of his early thoughts about NOPEC.

Also tonight we will be holding elections for five seats on the Board of Directors. And we promise we will leave time for your input.

At this time it is my pleasure to introduce to you our new Executive Director Leigh Herington.

Download 2005 NOPEC Annual Report (Acrobat PDF)

Download 2004 NOPEC Annual Report (Acrobat PDF)