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Article Excerpt
When Kyle Kuntz assumed the position of Chief Executive Officer for Sam Houston Electric Cooperative Association in October 2002, the cooperative faced several challenges that, in combination, placed Sam Houston Electric's relationship with some of its members at risk:
* When the Texas retail electricity markets were opened to competition, a portion of the cooperative's members found themselves residing in the deregulated ERCOT region and were receiving regular solicitations to select an alterative energy supplier.
* The rising price of natural gas--used to generate one-third of the electricity Sam Houston Electric supplied to members--was placing pressure on the cooperative's power supply costs, leading to increased electricity bills for members.
* Top down, "need to know" internal communication practices at the cooperative had resulted in little cross-department communication and employee morale was reported at an alarmingly low level. At a time when Sam Houston Electric needed most to communicate to members the principles and value of the cooperative, its employees were poorly equipped to do so.
STRATEGIC CHANGES BEGIN AT THE TOP
Sam Houston Electric Cooperative Association's 50,000 members live in a region of Texas served by two different electric reliability councils: the Southeastern Electric Reliability Council (SERC) and the Electric Reliability Council of Texas (ERCOT). Retail choice of electricity providers was introduced in ERCOT in 2001 and by 2002 consumers throughout the region were being courted by competing electricity providers and actively exercising their right to choose. The cooperative elected to opt-out of retail choice--a right afforded to cooperatives and municipal utilities in the state. However, television advertising promoting deregulation was seen...
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More articles from Management Quarterly
Communicating your cooperative's message--lessons learned.(business co..., March 22, 2005
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