Published: July 01, 2008 07:38 pm         

Jackson Energy raises rates 9%

Company executives receive pay increases

Despite increasing its rates by 9 percent, Jackson Energy Cooperative’s top executives are still receiving meaty raises. But officials say all of the increases are for good reason.

The most notable salary increase was that of Chief Executive Officer Don Schaefer, whose salary jumped 29 percent from 2004 to 2006. Documents show he earned $145,000 in 2006.

Financial Vice President Sharon Carson also received raises, with her salary moving from $88,120 in 2004 to $94,396 in 2006. Engineering and Operations Vice President Ron Fuller and Vice President Rodney Chrisman got similar hikes and earn slightly lower salaries.

The Jackson Energy Board, composed of nine directors, firmly stands behind the increases. They say the rationale behind them boils down to staying competitive.

“Jackson Energy has assets of $200 million, with over 51,000 meters and we have 130 employees,” Board Chairman Fred Callahan said. “Nationally, the average cooperative only has 12,500 meters, so we’re not only a large co-op in Kentucky, but also rank among the largest in the nation. The electric industry is growing more complex every day and we need a highly skilled management staff to operate our company.”

In terms of Schaefer’s increase in particular, Callahan explained the reasoning.

“Because this was the first time he had served as the president and CEO of a large cooperative, the board initially brought Mr. Schaefer on at a lower salary when compared to other CEOs of electric cooperatives in Kentucky,” he said. “After he gained experience in his new position, we began moving his salary up to a competitive level, which resulted in the increases from 2004 to 2006.”

Ron Sheets, president of the Kentucky Association of Electric Cooperatives, said Schaefer’s salary is now “very comparable to other cooperatives of its size throughout Kentucky.”

It is also considerably lower than investor-owned utility companies. The CEO of Delta Natural Gas, Glenn Jennings, earns $433,000 per year.



• RATES

Jackson Energy customers will notice on their July bills an increase from $8.44 to $9.50 on their monthly customer charge. The charge per kilowatt-hour of electricity (the amount used by a 100-watt light bulb in 10 hours) will jump from 7.77 cents to 8.56.

For an average customer, the base portion of their bill will increase from $101.02 to $110.84.

Jackson Energy had to submit their increase requests to the Kentucky Public Service Comm-ission, which subsequently approved them.

The increases were needed to offset costs.

“In the time frame between 2001 and 2007, our transportation costs have tripled because of rising gas and diesel costs,” Combs said.

“We serve some very rural areas,” she added. “Our workers have to do a lot of driving.”

She explained costs of materials have likewise risen, citing the price of copper as an example.

“Copper has seen a 267 percent increase,” she said.

New materials are needed to repair damage to lines during a storm, build new line or do maintenance on old lines.

The last time Jackson Energy requested an increase was in 2001, at which time rates jumped 8 percent.