Michigan Schools Energy Cooperative

Partnering Organizations

Your Dependable Partner in Energy

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DIANE BLOCKAssistant Superintendent for Operations Alpena Public Schools

ALLEN GIGLIOTTI Director, Building & Grounds Henry Ford Community College

SEAN McNATTSuperintendent Breckenridge Community Schools

TIM PERAINODirector of Facilities & Purchasing Kent Intermediate School District

PAM SMART, Vice PresidentBusiness Office Supervisor Taylor School District

JOHN STONER, PresidentDir., Facilities, Operations & Transportation Rochester Community Schools

NICHOLAS THORNTON, C.E.MSupervisor of Energy and Facility Services Wayne-Westland Community Schools

RAY TELMAN, Secretary/TreasurerExecutive Director Middle Cities Education Association

DAVID MARTELL, Exofficio MemberExecutive Director Michigan School Business Officials

Executive Committee

From the PresidentFor the last year I have had the great pleasure of serving school Districts in Michigan as president

of The MICHIGAN SCHOOLS ENERGY COOPERATIVE (MISEC). MISEC’s main objective is to manage the natural gas and electric procurement of Michigan’s K-12 schools. Since its inception in 1997, MISEC has also significantly reduced energy costs for its members. Cumulatively those efforts have helped member districts save over $64,000,000. Hopefully, these savings have been used to help offset the continued underfunding of Michigan’s schools.

In the past year, MISEC has been able to lower costs, on the natural gas front and by entering into long term electrical supply agreements. Besides offering energy at very competitive rates, MISEC also works in many other ways to help member districts. A few of these are: aggregated billing, utility invoice audits, lobbying the legislature for its members concerning energy, and working with suppliers to reduce supply costs. In the works are also two new things, one which should help offset the variability of the cost of diesel fuel, and the other, an on-line energy information center (Resource Advisors) designed to assist member districts track their energy usage and costs.

Representing over 325 Michigan school districts, MISEC’s operation is governed by an executive committee of school administrators and is the largest organization of this type in the United States. In closing, I hope that you find this review helpful, and if there is ever any question of how we can be of assistance, please do not hesitate to contact a MISEC representative listed on page 5.

Sincerely,John D. Stoner, President, MISEC Executive CommitteeDirector of Operations, Rochester Community Schools

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WELCOME! New MISEC District Members• AshleyCommunitySchools

• AthertonCommunitySchools

• ClarencevilleSchoolDistrict

• ColemanCommunitySchools

• EastDetroitPublicSchools

• HarborBeachCommunitySchools

• JacksonCountyISD

• MarionPublicSchools

• MichiganCenterSchools

• WestwoodHeightsSchools

MISEC Facts & Stats:• To date over 325 member districts have

joined MISEC.• Natural Gas Program:

�� 200 districts representing 1100 facilities participating in Gas Customer Choice (GCC).

�� Over 40 districts representing over 500 facilities participating in Direct Purchase/Transport Gas.

�� Over 6,200,000 Mcf’s annually.

• Electric Customer Choice:�� Over 165 districts representing over

1000 facilities participating in Electric Customer Choice (ECC).

�� Over 850,000,000 kWh’s annually.

�� Over 245 facilities enrolled in the Utility Queue awaiting the opportunity to participate in Electric Customer Choice.

Budget Certainty & Savings:MISEC Member Savings over Full Service – Fiscal 11-12 – $15,382,783MISEC Member Cumulative Savings since 2002 – $64,896,000MISEC Member Invoice Error Savings – $1,064,694MISEC Member Rate Optimization Savings – $46,899

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NaturalGasUpdate:The combination of stronger-than-expected

power generation demand (i.e hot summer) as well as increased usage from the industrial sector, has provided some balance in an otherwise weak natural gas market. While natural gas production has remained strong, the growth rate of new supply coming on-line has turned negative since the beginning of the year. As a result, we expect to see prices remain at or near current levels for the remainder of 2012. However, in 2013 and beyond, we expect the U.S. natural gas market to trade higher as supply and demand become more balanced. This balance will likely keep prices trading relatively sideways through 2014 and 2015.

ElectricUpdate:You’ve heard the Jimmy

John’s saying: “so fast, you’ll freak”! Well that saying can also apply to the speed with which the Michigan utilities are fi ling for rate increases. Michigan’s electric rates are now the highest in the Midwest, and well above the national average. But that wasn’t always the case.

From 2000 to 2008, Michigan allowed electric competition, and our rates swung below the national average. Then, in 2008, Gov. Jennifer Granholm and the Michigan Legislature decided to return the state to a near monopoly that contributed to a steady and signifi cant increase in electricity rates by DTE Energy and Consumers Energy. Residents and businesses have been hard hit

as a result. For example, residential customers of Consumers Energy have suffered from an average 47% increase in their electric rates over the last four years, while small commercial customers of Consumers Energy and DTE have experienced 30% & 20% rate increases, respectively.

MISEC Energy Program UpdateAlthough these increases apply to those

customers buying their electricity from the local utility, MISEC members participating in our Choice program have escaped these budget-busting increases. Despite the increase in utility delivery costs, wholesale electric rates have fallen, thus neutralizing the overall effect of the utility rate increases. We expect the pattern of utility rate increases

to continue into the foreseeable future.

ElectricChoiceUpdate:As you are most likely aware, in 2008 a law

was passed that limited or capped the amount of load that could participate in the Michigan Choice Programs. This cap was reached in late 2009 and since then no new customers can participate in the Choice program. Any accounts that are not already participating

in the MISEC electric choice program still have a chance to save! We can get you prepared for the day that the cap is increased. Simply email or fax (269-324-1048) one utility bill (all pages) for each account to MISEC. The FY 2011-2012 savings for MISEC

participants averaged 10-18% for Consumers Energy accounts and 12-25% for Detroit Edison accounts compared to the utility’s full service rates. Based on recent utility MPSC fi lings, we expect to see these savings in the coming year, as well.

MISEC’sIndependentEnergyManager:The MISEC independent energy manager is

Summit Energy Services, Inc. Summit Energy provides energy management services to organizations in a wide range of industries. Founded in 1991, Summit has experience leading companies worldwide to cost effective and sustainable energy. Summit is part of Schneider Electric, the global specialist in energy management. Summit Energy is your independent and unbiased advocate, always focused on the best interest of your district.

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• MASB Fall Conference November 8-11, 2012 • Detroit• MASA Midwinter Conference January 23-25, 2013 • Kalamazoo• Annual MISEC Membership Meeting April 23, 2013 • Grand Rapids• MSBO Conference April 23-25, 2013 • Grand Rapids

Coming Soon!Watch For These Events

Things you should do to help reduce energy bills

• Educational/school rates are available for those served by Consumers Energy electric, DTE electric and DTE/MichCon natural gas. These apply to both Full Service and Choice rates.

• Have MISEC enroll your electric accounts in the Consumers Energy and DTE Electric Customer Choice queues.

• Have MISEC analyze the potential savings by participating in the Gas Customer Choice Program.

• All utilities, both natural gas and electric, have Energy Optimization rebates available for various energy conservation measures (ECM) that a district might employ. Contact your utility company to determine which ECM’s qualify for rebates.

• Have your utility analyze your natural gas and electric distribution rates to confirm that each account is on the most economical option. The utilities will do this every 12 months for FREE.

ContactUs:Jeff Clark – ph (269) 324-7354 jeff.clark@summitenergy.com

Jan Rogers – ph (269) 324-7355 jan.rogers@summitenergy.com

Doug McCall – ph (517) 913-2155 dmccall@middlecities.org

MISEC – ph (888) 345-0440