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New Headquarters

Frequently Asked Questions Regarding New Headquarters Location

June 5, 2017


Are we going to build a new headquarters facility?  

After more than two years of planning, on May 23, 2017, the Co-op executed an agreement with Cooperative Building Solutions to construct a new headquarter facility.


Why not just renovate the existing headquarters building?

When the current headquarters building was constructed in 1967, there were 22 employees who maintained $4 million in total utility plant. Today, there are 43 employees and we regularly have 2 to 4 contract crews who maintain more than $60 million in utility plant spanning five counties. Given the shortage of land in our current location, the condition of our existing headquarters building and current Oklahoma public building statutes, the FPS team recommended that development of a new site be pursued to assure we continue to provide first class service and response time for the membership for the next 50 years.




Where might the new headquarters facility be located?

REA has secured 20 acres of land on the north side of highway 32 just east of the Scenic 77/Highway 32 junction.

map



Why was the decision made to locate east of Marietta?

The property of our present headquarters location on Memorial Drive in Marietta is not large enough to accommodate the next 50 years of predicted growth and the available adjacent land is not suitable for our needs. We presently occupy 5 acres of useable land on Memorial Drive and have additional inventory located at a warehouse on Brentwood Drive in Marietta. The FPS team concluded that a total of 20 acres is needed to house all equipment, inventory and personnel on one site. Keeping computer systems storm-proof and running, maintaining sufficient electric line material inventory, protecting transportation equipment and personnel are all key components to quickly responding during severe storms, when you need us the most. If major ice storms across the state have taught us one thing, our present facilities are not adequate to handle the volume of material and personnel to quickly restore electric service to our membership.


What is the timeline on planning and construction?

Assuming the architectural design phase progresses normally and the REA Board approves moving forward with construction, groundbreaking should commence in June of 2017 and construction should conclude by the end of summer in 2018.



Will a new headquarters facility make my rates go up?

The short answer is yes eventually, but current financial models do not indicate an immediate increase is needed. Our current rate structure is adequate to absorb the debt service associated with a new headquarters building. With that being said, the long answer is much more difficult to predict and involves many factors (other than a new building) that can impact how much you pay for electricity. If a future rate adjustment is necessary, current financial modeling does not project a major impact resulting from a new headquarter facility.




What other factors impact how much I pay for electricity?

Fuel costs and weather have significant impacts on how much you pay for electricity. Many of you are familiar with the power cost adjustment factor (PCA) on your monthly electric bill. The PCA factor fluctuates monthly with the cost of fuel utilized to generate electricity. The PCA factor is a direct pass through charge to the consumer and REA does not retain any of the increases or decreases in fuel costs. Fuel can be as much as one-third of your total electric bill and our wholesale power supplier, Western Farmers Electric Cooperative, Inc., employs a department of professional fuel analysts to secure the most economical form of fuel for electric generation. Oklahoma weather extremes and the resulting damage to the electric grid can singlehandedly trigger a need for a rate increase. Ice storms, tornados, droughts and floods are impossible to predict and all involve very expensive repairs to the electric grid. A small ice-storm can easily turn into a multi-million dollar event in a matter of days. Red River has been blessed to not have a major event in recent years.



If an immediate rate increase is not needed, why did you just announce a rate adjustment?  

The recently announced rate adjustment is not designed to generate any additional revenue for REA. However, within individual rate classes some consumers may pay slightly more and some consumers may pay slightly less, depending on how each consumes electricity. The neutral (or zero revenue) adjustment was designed to capture increasing fixed costs through a higher customer or demand charge with an offsetting decrease to the monthly kWh charge.  



What will happen to the existing headquarters building and land?

In the very near future, the Board will determine what is the best method to market our existing headquarters building on Memorial Drive, the material warehouse on Brentwood Drive and a material warehouse on North Front Street. REA has a full service district office and material warehouse west of Kingston, Oklahoma which will remain open and not be sold. All proceeds from the sale of existing properties will be utilized to offset the expense of building a new headquarters building.




What will the new headquarters look like?

Below are architect renderings that are nearing the 100% completion stage.


new building-front

new building-arial


Other questions?

It would be our privilege to answer any question you have now or in the future. You can write, e-mail or call us with any concern.


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