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Flint EMC invaded Fort Benning on June 1, 1998.
That day, a line of the Georgia co-op's trucks rolled onto the U.S. Army base draped with banners that read, “Flint EMC Invades Fort Benning and Fort Benning Wins."
As has happened at many military bases over the last 25 years, Fort Benning, on the outskirts of Columbus, Georgia, was turning over the operation of its electric service to a local utility.
With some 30,000 active-duty soldiers and trainees, Fort Benning is the fifth largest U.S. Army base in the world. Established as a basic training camp and named after a confederate general, it has trained soldiers for every American war since 1918.
Flint EMC bought the base's 112 miles of lines and six substations. It was the first privatization of a military electrical system to be completed. Power supply stayed with Georgia Power, an investor-owned utility.
Today, 125 co-ops in 41 states distribute electricity on military bases and smaller installations, according to Lauren Khair, NRECA's director of business transformation. At 33 of these, a local co-op owns, operates and maintains the lines under what the U.S. Department of Defense calls a “utility privatization contract."
“It's like acquiring a small municipal utility," Rob Dyson of the Cooperative Finance Corporation (CFC) said at the time of the Flint EMC acquisition.
Allan Rosing, a utility consultant with EnerVision, called military bases “good payer[s] and good co-op members. “They're not going to show up at your annual meeting and make trouble." (EnerVision was spun off from Oglethorpe Power, the Georgia generation and transmission co-op.)
Fort Benning is “a great source of revenue for us," added Flint EMC General manager Joe Cade. In 1997, the Army base bought 260 million kilowatt-hours.
He said the co-op was guaranteed a 10 percent return on its investment in the way the deal was structured. And that gave it a competitive advantage over IOUs that might have wanted to serve the base.
“The investor-owned utilities typically won't look at anything less than a 13 to 14 percent rate of return," Cade said.
He expected to do much better than 10 percent, generating margins of 20 to 25 percent, money that could be used delay rate increases and improve service for all Flint EMC's consumers.
To meet Fort Benning's electricity needs, the co-op hired an additional serviceman and an assistant. It also bought a new bucket truck, which it planned to also use as a back-up vehicle at the co-op's district office in Columbus.
Cade explained that Flint EMC budgeted for construction of a new service center on the base, but then the Army turned over its electric department building to the co-op, “which is a tremendous benefit."
Bigger still was the benefit of acquiring a distribution system that was in good shape. Cade had put aside $1.5 million for upgrades and improvements in the first year, but was pleasantly surprised when he and his operations engineer looked closer.
“Out in the rural portions, some of the crossarms are in need of replacement, but overall [the system] is in great shape."
This isn't always the case.
“I've been to one base where I saw a substation that was built in 1912," said Lynn Lanier, another utility consultant at the time. “It looked awful, but I think it was working."
But according to CFC's Dyson, more often than not, serving a military base is a good investment.
“It's huge opportunity."