Frequently Asked Questions
Knox Energy Cooperative Association, Inc. FAQ’s
- Who is the Knox Energy Cooperative Association, Inc.?
- How is Knox governed?
- How does Knox set gas rates?
- What are the various components of rates?
- How does Knox buy its gas?
- How does Knox operate all of the pipelines it now owns?
- Is Knox regulated by the Public Utility Commission?
- Is gas cheaper than propane, fuel oil and/or electric?
- What are the other great benefits of gas?
- How has Knox's gas price compared to other large gas utilities?
- Why does Knox shut off gas to Members that don't pay or those that fall behind on their bills?
- Does Knox accept payment from State, Federal or other assistance programs?
Knox Energy Coop (Knox) is a 501 (c)(12) non-profit, member-owned company that was founded in 1998 by a small group of homeowners in Mt. Vernon OH. The initial purpose was to provide gas service to the Apple Valley Lake community. This community desired to have gas service for many years but couldn’t get the local gas utility to run gas lines due to restrictive utility regulations.
Knox is governed by a 9-member Board of Directors made up of the members of the Coop. Any Member in good standing can run for election to the Board. The Board makes all high level decisions on behalf of the membership. This includes such things as new project construction, acquisitions, gas purchasing, etc.
The Knox Board sets rates according to many factors involved with the each system it constructs or acquires. The primary factors include the cost of the system as compared to the use or number of members using the system. For example, at the Lake Lakengren project in Eaton OH, the mainline providing service is approximately 12 miles of 8 inch plastic to serve about 400 homes. This distance and expense requires a higher gas delivery charge than another project which might have a shorter line with more members.
Knox has three components to rates. The first is the fixed monthly service fee. The second is a variable gas delivery fee. This variable costs changes each month and is based on the amount of gas used. The final component is the cost of the gas. The cost of gas is passed through to the members at actual cost. As a non-profit, Knox makes no profit from any of these fees, unlike other utilities which are for-profit companies.
Knox purchases gas with a monthly variable contract which is based on the NYMEX monthly closing price. NYMEX is a publically posted gas price used throughout the US as the base price for natural gas on the market. This price changes daily and can be followed on www.nymex.com. In the past few years this price has become very volatile. To help protect against dramatic price changes, the Board has periodically “locked-in” or hedged prices. The primary goal in these decisions is to help stabilize prices to avoid volatile price movements.
Knox has entrusted Utility Pipeline, Ltd. (UPL) to manage all of ther operations and maintain all of its gas systems. UPL is a gas pipeline management company that is highly skilled and experienced in providing the necessary services needed to handle all operational duties in an efficient and effective manner.
Yes and no. Knox is regulated for the purposes of pipeline safety. Knox must operate its systems according to the Federal Pipeline Safety Code. Knox is not regulated on its rates and Rules and Regulations. This is typical for all Coops, whether gas, water and/or electric. The Board of Directors has full authority to establish rates and policy.
Yes. Natural gas is typically the most cost efficient and most desired energy source for home and businesses owners. Natural gas will generally cost about 50-70% less than propane, up to 50% less than electric, and around 30-50% less than oil. Also new gas furnaces add value to your property due to their high efficiency rate.
Along with being the most cost effective fuel source for consumers, natural gas is also very clean, more versatile, and has less risk of being disrupted in bad weather. Gas is almost entirely produced within the U.S. Using gas reduces our country’s dependence on foreign oil. Gas is also very environmentally friendly with minimal emission gases when consumed.
All utilities buy gas on the market based on NYMEX pricing. Over its 10 year history, Knox has been very competitive with other gas utilities and in fact has often had a better price than the big utilities.
As a non-profit Coop, Knox must balance its expense with its revenues. If Knox does not receive payment from one of its members, it must spread these costs to its other good paying members. Over the years, the Board has decided the fairest policy is to minimize these costs to good paying members. This can only be done by terminating service to those that do not pay.
Yes, Knox will accept payment from these agencies and/or other assistance programs.