DEMCO has provided safe and reliable electric power since 1938

March 2016: As late as the mid-1930s, nine out of 10 rural homes were without electric service. Everything a rural family had to do was more difficult without lights in their homes and barns. This meant no power tools, no refrigeration, no labor-saving devices such as vacuum cleaners or washing machines, no practical access to radio for news or entertainment.
The costs were high and profits low for running electric lines to areas where customers were literally few and far between, so power companies ignored the rural areas of the nation. The unavailability of electricity in rural areas kept those communities dependent on agriculture, as factories and other large businesses needed to locate where there was electric power.
That began to change thanks to President Franklin Roosevelt, who on May 11, 1935, signed an order establishing the Rural Electrification Administration (REA). The Rural Electrification Act was passed the next year, and the lending program that became the REA was launched.

The rise of electric cooperatives

It was a slow and involved process for farmers and rural businessmen to form cooperatives, borrow funds from the REA, and acquire equipment and supplies to string power lines. Wiring a house for electricity in rural areas was a complicated affair. One of the early cooperatives to organize was Dixie Electric Membership Corporation, or DEMCO.
DEMCO was formed in August 1938 to serve about 750 members in the parishes of East Baton Rouge, East Feliciana and Livingston. Within four years after World War II ended in 1945, the number of rural electric systems in operation in the U.S. doubled; the number of consumers connected to a system more than tripled; and the miles of electric power lines were five times greater. By 1953, more than 90 percent of U.S. farms had electricity, and today, about 99 percent of the nation’s farms enjoy electric service.

CEO and General Manager John Vranic, left, and Board President Richard Sitman look over old photographs and previous generation meters from earlier days of the co-op.

CEO and General Manager John Vranic, left, and Board President Richard Sitman look over old photographs and previous generation meters from earlier days of the co-op.

That could not have happened without the formation of locally owned rural electric cooperatives like DEMCO that got their start by borrowing funds from the REA (now the Rural Utilities Service, or RUS) to build lines and provide service on a not-for-profit basis.
One of the fastest growing cooperatives in the nation, DEMCO now serves members through over 106,000 meters in seven southeast parishes of Louisiana and is the largest electric cooperative in Louisiana in terms of number of meters – as well as being one of the largest local businesses of any type.
The parishes it now serves are: Ascension, East Baton Rouge, East Feliciana, Livingston, St. Helena, Tangipahoa and West Feliciana. DEMCO’s integrated electric distribution system covers 15,000 square miles.

Providing for today’s consumers

DEMCO has made many advances in its 77-year history, but one thing that has not changed is its purpose and dedication to providing safe and reliable electric power to its members at the lowest possible prices.
“Our main goal, in a nutshell,” said DEMCO CEO and general manager John Vranic, “is to continue supplying power to members for a long time. We have no stockholders per se, so we strive to pay the lowest price for power and provide the highest reliability.”
DEMCO supplies power but does not produce it. Electrical power is purchased from CLECO, a public electric utility company headquartered in Pineville, LA, which uses multiple generating sources and multiple fuels for its electrical power.
Vranic explained, “The challenge is that all co-ops require a contract with a power supplier which has to be periodically renegotiated. DEMCO is currently under contract with CLECO until 2024. The cost of obtaining power is our biggest expense and has escalated over the last 10 years. We used to have fixed fuel costs, but that’s not available anymore. The provider’s costs of coal and natural gas are factored in, and we have to pay for those variable fuel adjustments. CLECO has a good mix of fuels (coal and gas), and we believe we have a good contract with them going forward.”
The RUS monitors co-ops to track how many hours of outages they have, and the co-ops are required to have a plan in place to reduce outages to consumers.
“We take this very seriously and work hard to keep the power on for our members,” Vranic said. “We do everything from controlling vegetation growth in rights-of-way to adding additional stations at strategic locations.”

DEMCO’s workforce and service

“After power costs, our main cost is labor,” Vranic stated. “We have 214 employees currently. That number is steadily growing on the craft (union) side. On the management side, we have reduced that number back to where we were in the early 1970s. We’ve been able to do that through automation, retirements and restructuring job assignments.”

The linemen for DEMCO keep power fl owing to customers in seven parishes and travel out of state to help other co-ops when needed.

The linemen for DEMCO keep power flowing to customers in seven parishes and travel out of state to help other co-ops when needed.

Vranic revealed that, remarkably, DEMCO has never laid anyone off.
“We have a good working relationship with unions,” he said. “We try to do everything we can in challenging times to retain everyone and have been successful. We watch our growth and make sure we have very good retention through good benefits and competitive wages in the market we’re in.
“We try to make sure employees feel invested in the company and work to help it be successful. Our goal is to be more competitive and reduce costs through the use of automation and increased efficiency.”
DEMCO manages their day-to-day operations with a staff of 214, but circumstances sometimes require additional workers. It would be very inefficient, and co-ops cannot afford to employ year round the number of people required to cover brief periods of spiked needs.
“In certain situations, such as the aftermath of hurricanes or ice storms, where things are beyond our capability, and we require more workers to make repairs, we go to outside sources,” Vranic explained.
“We belong to the Association of Louisiana Electric Cooperatives that maintains mutual aid agreements with other states. When an event is more than we can handle, we ask for help. They provide workers and charge us just what they normally pay their employees. We reciprocate and do the same thing for others when we’re needed. We’ve sent workers to Arkansas, Georgia, Florida and Mississippi, and workers from as far away as Kansas and Colorado have assisted us.”
DEMCO utilizes technology whenever possible to improve customer service. They have fully deployed an automated reading system to read meters remotely. Individuals who were meter readers were cross-trained and transferred into other positions.
“Technology has benefited this company greatly, and we will continue to use it as much as possible because it reduces expenses,” said Vranic. “A few other examples of our uses of technology which benefit our members are: smart switches which can reswitch an electric load to the other side to bypass downed sections or to better handle overloads; the ability to generate electronic bills and accept electronic payments for members; automated call centers to eliminate most busy signals and handle calls more quickly and efficiently (the system is set up to accept tens of thousands of calls per day and handle calls in less than 1.5 minutes versus 4 to 5 minutes by a live person, and it’s there 24/7); and updated computers and software for office staff for them to work more efficiently.

Charting the course for the future

A management team headed by CEO/General Manager John Vranic runs the day-to-day operations of DEMCO, supervising everyone from office staff to linemen.
The board of directors acts as trustees on behalf of the members, ensuring sound fiscal management of the co-op and plans for the co-op’s future through strategic planning and board policy.
“Our board is financially conservative yet visionary at the same time,” Vranic stated. “Every board member does not always agree on everything, but in the end, the board makes the right decision, as evidenced by our history and growth. They govern the co-op and chart our course for the future.”
The 13 members on the board are elected from districts within the parishes it serves. Board members have included a retiree, educator, state employee, Little League coach, law enforcement officer, homemaker, entrepreneur, lawyer and various other professions. They serve staggered three-year terms.
Any DEMCO member who wants to run for a seat on the board is required to get a certain number of signatures on a petition. Qualified candidates are then put on a ballot for their geographical area, ballots are mailed to members, and people vote and select their representative.

The current DEMCO board of directors, above, includes, left to right, Dennis R. Lott - E. Livingston, District 8; Alice Faye Morris - E. Feliciana, District 5; Clarence Brock - Ascension, District 1; Joseph Self, Sr. - S. St. Helena, District 11; Stephen Irving - S.E. Baton Rouge, District 4; Leslie A. Falks - N.E. Livingston, District 7; Richard W. Sitman - N. St. Helena, District 10; Leona “Ann” Samuel - N.W. Baton Rouge, District 2; Randy D. Lorio - N.E. Baton Rouge, District 3; Eugene O. Traylor - Tangipahoa, District 12; Daniel P. Berthelot - S.E. Livingston, District 9; Freddy Metz - W. Feliciana, District 13; not pictured, Edward Glenn DeLee - E. Feliciana, District 6.

The current DEMCO board of directors, above, includes, left to right, Dennis R. Lott – E. Livingston, District 8; Alice Faye Morris – E. Feliciana, District 5; Clarence Brock – Ascension, District 1; Joseph Self, Sr. – S. St. Helena, District 11; Stephen Irving – S.E. Baton Rouge, District 4; Leslie A. Falks – N.E. Livingston, District 7; Richard W. Sitman – N. St. Helena, District 10; Leona “Ann” Samuel – N.W. Baton Rouge, District 2; Randy D. Lorio – N.E. Baton Rouge, District 3; Eugene O. Traylor – Tangipahoa, District 12; Daniel P. Berthelot – S.E. Livingston, District 9; Freddy Metz – W. Feliciana, District 13; not pictured, Edward Glenn DeLee – E. Feliciana, District 6.

DEMCO Foundation/members give back

The DEMCO Foundation was created in 1997 as a non-profit charitable organization. DEMCO takes great pride in the program, as it allows members to give back to the community. Funds for the DEMCO Foundation are raised through Operation Roundup®, an assistance program funded by DEMCO members who voluntarily have their monthly utility bills “rounded up” to the nearest dollar to assist members in need. Contributions average $6 per year per member. Funds are used to assist members with various humane needs including medical bills and supplies, shelter and repairs to homes caused by fire, flooding, etc. The assistance is temporary, and the maximum award is $2,500 per calendar year. Since its inception, the DEMCO Foundation has awarded over $4,500,000 in assistance to DEMCO members in their times of need. Members in need of assistance must apply and prove financial need. Applications are available online or from any district office.

The management and staff of DEMCO are involved in many community events. They run each year as a team in the Susan G. Komen Race for the Cure fundraising event for breast cancer research.

The management and staff of DEMCO are involved in many community events. They run each year as a team in the Susan G. Komen Race for the Cure fundraising event for breast cancer research.

Years ago, DEMCO looked at unclaimed deposits of previous members and started thinking about things they might be able to do with the money besides surrendering it to the state as was mandated.
After receiving permission from the PSC, DEMCO began funding a scholarship program for the children of DEMCO members who are seeking to better themselves through trade school, vocational or technical school, community college and/or other forms of educational programs in the state of Louisiana.
An average of 10 one-year, one-time academic scholarships for full tuition are awarded each year at DEMCO’s annual membership meeting in a random drawing from among qualified students. Financial need is not a factor, but other requirements apply.
A second type of scholarship is offered through the DEMCO Foundation; applicants must qualify for a Foundation scholarship based upon a specific set of requirements. Details on both types of scholarships and the Foundation are on DEMCO’s website, www.demco.org. The foundation awards 40 scholarships each year.
The DEMCO staff, managers and board of directors support many different local charities in their membership area, including the upcoming Cookin’ in Central which benefits local schools. Employees also participate in the Susan G. Komen Race for the Cure, Dreams Come True, American Cancer Society Relay for Life, 4-H Youth Development, Junior Achievement, Chambers of Commerce in their service area, and many other worthwhile community programs.

Dixie Business Center

John Ware, Executive Director of the Dixie Business Center, works with new and existing businesses and provides free counseling and resources, while DEMCO provides offi ce and warehouse spaces in their business incubator in Denham Springs at reasonable rates to help the businesses succeed.

John Ware, Executive Director of the Dixie Business Center, works with new and existing businesses and provides free counseling and resources, while DEMCO provides office and warehouse spaces in their business incubator in Denham Springs at reasonable rates to help the businesses succeed.

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The sign outside the Denham Springs DEMCO offi ces which shows the names of the business incubator tenants.

When someone is looking to start a business, there are questions about where to turn for help. The Dixie Business Center (DBC) was started in the early 1980s as a business incubator to promote and assist businesses. The USDA Office of Rural Development and DEMCO provided start-up funds.
The Center, located in the DEMCO building in Denham Springs, helps new and emerging businesses develop, grow and succeed. Consultants can help preparing business plans, obtaining market research, identifying sources of financing, and many other services at any stage of planning, starting or operating a business – and all of their services are free.
The Center has offices and warehouse space that may be leased at reasonable fees. Tenants share a meeting room, kitchen and copy machine, and utilities are included in rent.
DBC Executive Director John Ware wants prospective or current entrepreneurs to know they do not have to be a tenant in the incubator to receive assistance. “Businesses can still use the Center’s free services, and counseling is available on a one-on-one confidential basis – before or after they have started their business. Our services are available to people in parishes served by DEMCO; DEMCO membership is not required,” he said.

Details:

Details: • DEMCO Main Office, 16262 Wax Rd, Greenwell Springs, LA 70739; 225.261.1221; www.demco.org • Dixie Business Center, 1810 S Range Ave, Denham Springs, LA 70726; 225-665-0809; email: info@dixiebusinesscenter.org; website: www.dixiebusinesscenter.org • DEMCO Foundation, Chanon M. Johnson, Case Manager, 1810 S. Range Avenue, Suite 2, Denham Springs, LA 70726; 225.262.2141; website: www.demco.org/community/demco-foundation; email: chanonm@demco.org;

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