Kansas Municipal Energy Agency buys engineering firm to offer more services

by Peter Maloney
APPA News
August 11, 2020

The Kansas Municipal Energy Agency (KMEA) has acquired Mid-States Energy Works, a small engineering company based in Salina, Kansas.

Mid-States provides engineering, testing, troubleshooting, fabrication and installation of electrical equipment and controls.

KMEA, a joint action agency serving public power utilities in Kansas, has 81 members. Mid-States currently works for about half of those members, as well as other public power utilities in Kansas.

“Members had been asking us to get into the service arena,” Paul Mahlberg, KMEA’s general manager, said. The Mid-States acquisition allows for us to provides these types of services now rather than trying to build them up from scratch.”

“The fact that we both have the same vision of helping out the Kansas municipal utilities to be the best they can be… it became a win/win/win situation for Mid-States, KMEA and most importantly for the cities,” Mike Schmaderer, president of Mid-States, said in a statement.

The acquisition grew out of requests that KMEA’s members had been making for years. A couple years ago, KMEA did a strategic plan. As part of that plan, KMEA surveyed its members in 2019. The top response, according to Mahlberg, was for KMEA to expand the services it offers members. At the top of that list was line maintenance, followed by engineering, project management, substation maintenance and construction and power plant troubleshooting.

Around the same time, KMEA had embarked on a separate venture with one of its members, the City of Dighton. For 20 years, the city had contracted for line maintenance with the local rural electric cooperative, but it was now ready for a change.

KMEA hired a couple of linemen and signed a two-year agreement with the city to provide the labor for the operation and maintenance of the city’s distribution system, including preventative maintenance, repair, equipment testing and repair, connection and disconnection services, tree trimming, and streetlight maintenance. The “partnership with KMEA will provide us more control and involvement in maintenance and health of our electric system,” Dighton Mayor Doyle Capra said in a statement.

The Dighton partnership turned out to be a “parallel path” for KMEA, a path that “blended together” with the Mid-States acquisition, Mahlberg said. Dighton was its first member to receive KMEA’s new services, and now with a journeyman lineman and apprentice on board, the crew, along with the Mid-States staff, will be available to assist other KMEA members, Mahlberg said.

The relatively small size of many of KMEA’s members – the agency’s average member has 1,500 meters and some have as few as 100 – means that it is difficult for many of those utilities to be able to afford a full-time electrical maintenance staff.

In addition to having a dedicated maintenance staff it can share with its members, Mahlberg says KMEA will be able to offer services to its members at close to cost. In the near term, KMEA plans to amortize the purchase price into its rates, but over the longer term the agency plans to lower its fees and expand its services, Mahlberg said.

“We are doing more strategic thinking about how to grow the business.”

Among the services KMEA is looking at are preventive plans for substation maintenance, and it is also starting to look at a mobile substation that could be used anywhere throughout the state, Mahlberg said.