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Section 1 Table of Contents Tiers of Trust Associated Electric Cooperative Inc. By Jennifer Ailor THE 1960s Associated Electric Cooperative Headquarters built in 1964. 1960, fall 1962, March 28 1962, July 25 1965 1968 Though Associated was During a Springfield The U.S. Department of the Associated builds its first Associated, the city of not yet incorporated, its ceremony, the soon-to­ Interior grants final approval transmission line, a 1.5-mile New Madrid and Noranda principals were engaged be Associated and three to form Associated. tie line between M&A Electric Aluminum Inc. work together in multiple negotiations western Missouri investor- Power Cooperative and to clinch a deal to bring that had produced draft owned utilities sign draft 1962, August 1 Union Electric. an aluminum smelter to contracts between what contracts that give the Associated officially southeast Missouri; the plant would become Associated IOUs access to generation begins operations with five begins operating in 1970 and the Southwestern Power excess from Bull Shoals and employees. and continues for 33 years Administration, between Table Rock lakes beyond as Associated’s largest the future Associated and Associated’s needs. 1962 customer. investor-owned utilities, Associated assumes the between these companies 1962, May 28 contracts between the G&Ts and SWPA, and between the Neil Adams is hired as and the Southwestern Power future Associated and each Associated’s first general Administration, paving the of the G&Ts. manager, serving until June way for generous credits, 1971. transmission access and 1961, February 8 control over hydropower in 1966 1969 Fifteen incorporators sign Missouri. Associated’s first coal-fired Thomas Hill Unit 2 goes on articles of incorporation to power plant, Thomas Hill line, adding 303 MW. create Associated Electric Unit 1 at 180 MW, begins Cooperative Inc. operating. THE 1970s From left, New Madrid Power Plant and Noranda Aluminum Inc. 1970 1973, May 1974 1978 Late 1970s The 1970s was an era Gerry Diddle becomes O.B. Clark joins the board, Associated enters the coal Negotiations begin for a of extra-high-voltage Associated’s general becoming president in 1981 business, buying Bee Veer three-utility deal to build transmission construction, manager, serving until and serving until June 2009, and Prairie Hill mines near the first 500-kV line in beginning with the 40-mile February 1992. the longest tenure for a Thomas Hill Power Plant Missouri, connecting New line connecting New Madrid board president. from the Peabody Coal Co. Madrid Power Plant with with Lutesville financed by 1974 and begins operations in a 500-kV line owned by the first Rural Electrification The 345-kV St. Louis-to- 1977, June 1 1980. Arkansas Power & Light; Administration loan for a Tulsa line, also called the The 600-MW New Madrid the line is finished in 1984, 345-kV line. MO-KAN-OK line, is built, Power Plant Unit 2 goes on 1979, January the first such line financed the first of Associated’s line. Associated negotiates with by the Rural Electrification 1971, December interregional extra-high­ the Rural Electrification Administration. The short-lived Federated voltage ties. 1977 Administration for the largest Electric Cooperative was Two 22.5-MW oil turbine loan guarantee in the history incorporated to finance New 1974 peaking units at Unionville of the rural electrification Madrid Unit 2 but was never Associated partners with Power Plant go on line. program: $1.4 billion needed and was merged into Public Service Co. of (Associated’s own investment Associated in 1975. Oklahoma to build the Black in its system at the time was Fox Nuclear Project during a only $311 million) to pay for 1972, October time when the power industry Thomas Hill Unit 3, Black New Madrid Power Plant’s saw nuclear in its future. Fox Nuclear Project and its first unit of 600 MW goes on new mining operation and to line. offset double-digit interest rates in the late 1970s. i Associated has continued to invest in This book was commissioned by the Associated Electric Cooperative Inc. Board of Directors. its resources to serve member systems, including its integrated transmission system and diversified generation Associated Electric Cooperative is part of a three-tiered system united by the common purpose of serving electric coopera­ resources, clockwise from top on the tive members with affordable and reliable electricity. front cover, the New Madrid Power Plant and coal train; high-voltage transmission lines at New Madrid Power Plant; Associated is owned and operated by six generation and transmission cooperatives (G&Ts) that formed it in 1961 to provide the Bluegrass Ridge Wind Farm in northwest Missouri; and the G&Ts a wholesale power supply. on the back cover, the combined-cycle These six G&Ts are owned by 51 distribution cooperatives in Missouri, southeast Iowa and northeast Oklahoma. These natural gas Chouteau Power Plant. local cooperatives are owned by about 875,000 member-consumers. Produced by Member Services and Corporate Communications Statewide organizations – the Association of Missouri Electric Cooperatives, the Iowa Association of Electric Cooperatives and the Oklahoma Association of Electric Cooperatives – are an important part of this cooperative family. Joe Wilkinson, director Linda Putman Associated is headquartered in Springfield, Mo., and operates power plants in Missouri, Oklahoma and Arkansas. Glennon Scheid Nancy Southworth “Tiers of Trust” Julia VanDeWater This book is a sequel to “Win-Win,” the first informal history of Associated chronicling its first 35 years from 1961 to 1996. “Tiers of Trust” is a continuation of that history from 1996 to 2011 and recognizes the cooperative’s dedication to its members for 50 years. This book is printed with veg­ Copyright 2011 by Associated Electric Cooperative Inc. etable-based inks on recycled All rights reserved. paper with 10 percent post- consumer waste. No part of this book may be reproduced or used in any form or by any means – graphic or mechanical, including photocopy­ ing, recording, taping or information storage or retrieval systems, without written permission from the publishers. Published by Associated Electric Cooperative Inc. 2814 S. Golden Ave., PO Box 754 Springfield, MO 65801-0754 (417) 881-1204 www.aeci.org ii Section 1 Table of contents 1960s timeline ............................................................................................................................... inside front cover 1970s timeline ............................................................................................................... ........................................... i Preface ...................................................................................................................... ............................................. iv Prologue ..................................................................................................................... ............................................. v Taking stock ­ chapter one ................................................................................................... ................................... 1 Shakedowns, shake­ups ­ chapter two .................................................................................................................. 9 Grid gold ­ chapter three .................................................................................................... ................................... 39 Getting strategic ­ chapter four .............................................................................................................................. 49 Board talk ­ chapter five .................................................................................................... .................................... 65 Big money ­ chapter six ...................................................................................................... ................................... 79 Family ties ­ chapter seven .................................................................................................. ................................. 89 Beyond 2011 ­ chapter eight .................................................................................................. ............................... 93 Appendix ..................................................................................................................... ........................................ 101 Index ........................................................................................................................ ........................................... 107 About the author ............................................................................................................. ..................................... 110 1980s timeline ............................................................................................................... ...................................... 111 1990s timeline ............................................................................................................... ...................................... 112 2000s timeline ............................................................................................................................... inside back cover iii low-cost delivery of reliable power to 875,000 end-of-the- line members. Instead, this cash-starved cooperative was focused on paying the bills for its ambitious plans to build generation and transmission. Bob Stagner, who served on the board from 1969 to 2001 representing
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