2023 Annual Report
PrintEnergy for Mountain Living – Key Achievements From 2023
Sangre de Cristo Electric Association (SDCEA) is pleased to present the 2023 Annual Report. Energy for Mountain Living illustrates our dedication to exceptional service and our vision of energizing the growth and prosperity of our cherished mountain communities.
Reliable Electricity and Financial Stability
Following thorough deliberation, a general rate adjustment — the first since 2017 — was approved by the SDCEA Board of Directors. This carefully considered adjustment, effective February 2024, was driven by a commitment to ensure the reliability and resiliency of our system and the strength of the cooperative’s financial stability.
Member Service
A major service accomplishment is the ongoing work of the reconstruction of 19 miles of line, from Howard to the Westcliffe area, which has improved service and reliability for members in Custer and Fremont counties. The project is also designed to decrease the number and length of outages in the area.
The Wildfire Mitigation Program has shown tangible benefits in decreasing wildfire ignition risks and increasing service reliability. In acknowledgment of these efforts, SDCEA applied for a $494,000 grant and received a grant award notification from the Colorado State Forest Service for support of continued mitigation work in Custer County.
- Of the 750 miles of overhead line on the system, 264 miles needed mitigation when this project began in 2021. 127 miles of line have now been treated — roughly 49% of the project is now complete.
- The estimated project cost is $9 million, $4,864,378 has been spent.
In December 2023, SDCEA refunded capital credits to members who received service in 1997, 2004, and 2005. SDCEA posted credits to more than 3,800 accounts and mailed over 7,500 checks for a total refund of $239,080.
Environmental Stewardship
The power provided by SDCEA is reliable — and getting greener and greener. SDCEA supplies about 5% of power consumed locally via local generation, the remainder coming from Tri-State, for an average of roughly 40% of our power coming from renewable sources every day.
By 2030, Tri-State, our wholesale power supplier, plans to reduce greenhouse gas emissions by 89% in Colorado and 55% systemwide, from a 2005 baseline, with 70% of the energy Tri-State members purchase, including SDCEA, coming from renewable resources.
Community Support
SDCEA Charitable Giving programs are funded by unclaimed capital credit refunds, the Power of Change program, a matching grant from CoBank, and a small portion from operating revenue.
- In 2023, SDCEA awarded $37,000 in post-high school college or trade school scholarships.
- SDCEA’s Community Grant Program through Chaffee County Community Foundation, provided $43,000 in funding and matching grants available for organizations that serve communities in Custer, Chaffee, Fremont, and Lake counties. These grants focused on community-based health programs; support of food, shelter, and human services; disaster preparedness and relief services; animal protection and welfare; and environmental and historical preservation.
Other Notable Donations:
- Six first responder organizations were awarded $5,000 in funding from the 2023 Community Grant Funds.
- $7,000 in small cash donations were made to charitable community groups throughout the service territory in 2023.
- $14,232 was spent supporting youth who participated in junior livestock sales at four county fairs in the service territory.
- SDCEA’s 44 local employees volunteer for numerous community events, significantly contributing to the enrichment of our community. Their dedication includes helping STEM students, coaching local sports teams, trail cleanup, emergency services, and generously donating their time to help those in need.
Member Engagement & Voting
For the first time in our history, the cooperative offered electronic voting. This new approach to member participation was embraced with enthusiasm, as shown by a 7.38% increase in voting over 2022.
Leadership
Following a nationwide search, Gary Kelly was appointed as interim CEO. Kelly was formerly Chief Operations Officer at the cooperative.
Looking Toward The Future
A proactive step was taken to apply for multiple federal grants available for infrastructure improvements through the federal Grip II program, anticipating future community and infrastructure investments.
SDCEA is working on a fresh strategic plan, with five emphasized goals to enhance safety, proactively navigate the energy transition, design innovative rate structures, create a communications plan, and attract and retain quality employees.
2023 Financials
Comparative Balance Sheet
| Assets | 12-31-2022 | 12-31-2023 |
|---|---|---|
| Total utility plant | $76,915,589 | $81,578,885 |
| Accumulated provision for depreciation | $(26,428,938) | $(28,674,708) |
| Net utility plant | $50,486,651 | $52,904,177 |
| Total other property and investments | $11,944,209 | $11,952,228 |
| Cash-general funds | $1,954,383 | $892,816 |
| Cash-special construction funds | $1 | $1 |
| Investments | $368,405 | $342,800 |
| Accounts receivable | $2,649,725 | $2,518,177 |
| Material and supplies | $2,429,546 | $2,703,149 |
| Prepayments | $13,146 | $13,888 |
| Other current and accrued assets | $4,334 | $4,334 |
| Deferred debits | $1,395,047 | $1,541,475 |
| Total assets and other debits | $71,245,447 | $72,873,045 |
| Liabilities | 12-31-2022 | 12-31-2023 |
| Equities | $5,662,542 | $6,429,181 |
| Patronage capital | $18,875,110 | $18,985,713 |
| Long-term debt | $39,007,689 | $40,176,956 |
| Notes and accounts payable | $1,897,378 | $1,640,410 |
| Consumer deposits | $561,203 | $566,963 |
| Current maturities-long term debt | $1,917,000 | $1,856,046 |
| Other current and accrued liabilities | $1,069,068 | $1,009,829 |
| Regulatory Liabilities | $1,420,783 | $1,546,838 |
| Deferred credits | $834,674 | $661,109 |
| Total liabilities and other credits | $71,245,447 | $72,873,045 |
Operating Revenue & Expenses
| Operating Revenue | 2022 | % | 2023 | % |
|---|---|---|---|---|
| Residential | $16,443,249 | 73.4 | $16,885,862 | 73.4 |
| Irrigation | $121,865 | 0.5 | $150,036 | 0.7 |
| Small commercial | $4,935,929 | 22.0 | $5,047,661 | 21.9 |
| Large commercial | $651,808 | 2.9 | $654,675 | 2.8 |
| Street lighting | $97,050 | 0.4 | $98,813 | 0.4 |
| Other electric revenue | $158,031 | 0.7 | $167,579 | 0.7 |
| Sub-total | $22,407,932 | 100 | $23,004,626 | 100 |
| Revenue deferral out | $(450,000) | – | $(450,000) | – |
| Revenue deferral in | 450,000 | – | 450,000 | – |
| Total operating revenue | $22,407,932 | – | $23,004,626 | – |
| Expenditures | 2022 | % | 2023 | % |
|---|---|---|---|---|
| Cost of power | $10,603,043 | 49 | $10,708,273 | 47 |
| Operations and maintenance | $4,981,499 | 23 | $5,287,587 | 23 |
| Administrative and general | $2,537,740 | 12 | $2,706,413 | 12 |
| Depreciation and amortization | $2,168,454 | 10 | $2,471,709 | 11 |
| Taxes, interest, and other deductions | $1,437,599 | 7 | $1,485,819 | 7 |
| Total cost of electric service | $21,728,335 | 101 | $22,659,801 | 100 |
| Operating margins | $679,597 | – | $344,825 | – |
| Non-operating margins | $36,348 | – | $382,151 | – |
| G&T capital credit | $0 | – | $88,047 | – |
| Other capital credits | $346,227 | – | $327,744 | – |
| Net margins or patronage capital | $1,062,172 | – | $1,142,767 | – |
Comparative Statistics
| Stats | 2011 | 2022 | 2023 |
|---|---|---|---|
| kWh purchased | 117,249,043 | 141,441,592 | 137,258,119 |
| kWh sold | 107,083,870 | 129,252,174 | 125,737,690 |
| Number of consumers | 11,659 | 14,042 | 13,539 |
| Miles of energized line | 1,707 | 1,819 | 1,799 |
| Consumers/mile of line | 6.83 | 7.72 | 7.53 |
| Average monthly kWh used per residential consumer, excluding seasonals | 650 | 719 | 716 |
| Average monthly kWh used per residential consumer, including seasonals | 580 | 614 | 614 |
| Average monthly kWh used per account classified as part-time | 437 | 433 |
SDCEA Board of Directors
- Sandra Attebery – Chair
Custer County representative
Email Sandra Attebery - Charles A. Abel II – Vice Chair
Rural Chaffee/Lake County representative
Email Charles A. Abel II - Blake Bennetts – Secretary
Town of Buena Vista representative
Email Blake Bennetts - Dan C. Daly – Treasurer (January through Nov 2023)
At Large representative
Currently vacant with the passing of Mr. Daly in November 2023. - Jeff Fiedler – Treasurer (Dec 2023)
At Large representative
Email Jeff Fiedler - Mark Boyle – Director
Rural Lake/Chaffee County representative
Email Mark Boyle - Nick Hellbusch – Director
Fremont County representative
Email Nick Hellbusch
SDCEA Management Team
- Gary Kelly, CEO
Email Gary - Sarah Crites, CFO
Email Sarah
2023 Annual Meeting Minutes
83rd Annual Meeting Minutes
June 15, 2023 |.Buena Vista, Colorado
The 83RD Annual Meeting of the members of Sangre de Cristo Electric Association, Inc. (SDCEA) was called to order by Chair Joseph Redetzke at 10 a.m. on Thursday, June 15, 2023, at Buena Vista High School, Buena Vista, Colorado.
Invocation
Redetzke introduced Matt Shepherd to give the invocation.
Pledge of Allegiance
Redetzke led the Pledge of Allegiance.
National Anthem
Redetzke introduced Dawn Hollenbeck to sing the National Anthem.
Quorum Requirements
SDCEA Attorney Casey Martin reported quorum requirements are 50 members registered in person. 65 members were registered. Martin declared a quorum present.
Close Registration
Martin closed registration at 10:12 a.m.
Annual Meeting Notice, Certificate of Mailing
Martin presented the annual meeting notice and certificate of mailing. Martin reported the meeting notice was mailed on May 1, 2023, to all members of record addressed according to information on file, as of the date of record of April 13, 2023. He presented the 2022 annual report and noted it was distributed in the June 2023 issue of Colorado Country Life magazine. Of 11,926 eligible to vote, 2,687 ballots were cast (22.53%).
Introduce Director Nominees
Martin introduced director nominees.
Uncontested Candidate for Town of Buena Vista:
- Blake Bennetts (incumbent)
Contested Candidates for Rural Chaffee/Lake County:
- Joseph Redetzke (incumbent)
- Mark Boyle (candidate)
Contested Candidates for At Large:
- Michael Robinson (incumbent)
- Jeff Fiedler (candidate)
Election of Directors
Martin reported that the Rural Chaffee/Lake County results were as follows: Redetzke with 890 (33.6%) and Mark Boyle with 1,761 (66.4%). At Large results were as follows: Michael Robinson with 977 (37.0%) and Jeff Fiedler with 1,664 (63.0%). Boyle and Fiedler are elected to three-year terms.
Minutes of the 82nd Annual Meeting
Martin entertained a motion to dispense with the reading of the minutes of the 82nd annual meeting held June 9, 2022, and approve them as written. Motion was made and carried.
Introduce directors & Interim CEO
Redetzke introduced directors present. Vice Chair Daly addressed the members, welcoming newly elected directors and thanking outgoing directors. Abel, Attebery, Bennetts, Robinson, and Hellbusch each addressed the members present. Redetzke introduced Gary Kelly, Interim Chief Executive Officer (ICEO). Redetzke turned the meeting over to Daly who introduced newly elected directors Boyle and Fiedler.
Introduce Guests
Suzy Kelly, Phil DeLuca, and Geoff Gerk former SDCEA board members. Tri-State representatives: Duane Highley, CEO and Michelle Pastor, Member Relations Manager; CREA representative: Kent Singer, Executive Director; and Western United Electric Supply representative: Brandon Kibler, Account Manager.
Board Chair & Interim Chief Executive Officer Report
Redetzke outlined the future trajectory of SDCEA, emphasizing the crucial task of finding a new CEO to lead the cooperative forward. The Board has enlisted the support of NRECA to aid in this search. Despite this transition, addressing SDCEA’s rates remains a priority, highlighting that business must continue uninterrupted.
Strengthening relationships with members, including seasonal and second homeowners, is paramount, acknowledging that challenges extend beyond technical and financial realms. Member surveys have been conducted to glean valuable insights and better understand member needs and expectations. SDCEA is committed to advancing initiatives for member welfare, guided by a vision of a responsive, sustainable, and member-focused cooperative, grounded in honesty, accountability, and thorough analysis by its directors.
Active participation from all members, not just specific interest groups, is vital. SDCEA offers various avenues for engagement, including social media platforms and direct office contact. Listening sessions will be scheduled throughout the year to foster member-SDCEA interaction.
Kelly recounted the impact of a recent heavy snowstorm, which caused damage to 12 power poles. Despite the challenges, SDCEA employees replaced the poles within nine hours, aided by office staff maintaining operations. Emphasizing proactive measures, Kelly discussed aggressive tree trimming efforts to mitigate risks posed by trees to electric lines, such as property damage and safety hazards.
SDCEA prioritizes affordable energy usage while incorporating new technologies sensibly to avoid undue financial burden on members. The cooperative is actively pursuing grants to support the implementation of new technologies without imposing excessive costs on members.
The SDCEA staff constitutes the cooperative’s backbone, with ensuring employee safety as its foremost duty. The directors and management prioritize this by furnishing necessary tools and investing in professional growth. Equipping employees for effective and, crucially, safe work enables SDCEA’s progress and adoption of innovative technology. This positions us as pioneers in energy innovation.
Treasurer’s Report
Abel presented the Treasurer’s report, focusing on the financial data from 2022 as outlined in the annual report. The year experienced mild temperatures until its conclusion, with 90% residential and 40% second-home occupancy. Notably, SDCEA reported the lowest sales in the state. An increase in electric bills was attributed to the Wildfire Mitigation rider, with related statistics available on our website. The rider will be discontinued upon completion of the associated work. Loans from USDA RUS were secured for infrastructure development, motivated by favorable interest rates and the aim to uphold fiscal responsibility. Equity undergoes annual review by the board and is returned or retired to members as capital credits. In 2022, a total of $239,080 was distributed back to members.
Power Supply Report
Abel introduced Duane Highley, CEO of Tri-State Generation & Transmission (TSGT), during the power supply report. Highley highlighted TSGT’s extensive service area, spanning 200,000 square miles from Montana to the Mexican border. He emphasized the pursuit of clean, uninterrupted power generation, particularly through geothermal projects, with a focus on locations like Chaffee County. Reliability remains paramount, though increasingly challenging, while affordability ranks as a close second priority. Managing costs is crucial, especially in remote areas where providing service to consumers proves challenging due to low population density. Notably, TSGT has not implemented a rate increase since 2017. Tri-State projects a 6.6% increase for 2024, despite efforts to cut costs by $1 million. By 2025, TSGT aims to source 50% of its energy from renewable resources and is in the process of shuttering coal plants in its territory. The company has committed to an 80% reduction in emissions, and with federal funding will actually achieve an 89% reduction despite increased power usage. Notably, Kit Carson Electric Cooperative left TSGT to pursue faster renewable energy adoption, achieving 100% renewable energy during the day. However, they face challenges in meeting nighttime demand, currently sourcing only 30% from renewables during those hours. In contrast, TSGT already provides a significant portion of its energy from renewable sources, peaking at 70% last month. Remaining with TSGT accelerates the transition to higher renewable energy proportions. Departing cooperatives may anticipate cheaper power but often face rate increases post-exit, while those remaining with TSGT have maintained stable rates.
Colorado Rural Electric Association Report
Kent Singer, Executive Director of CREA, heads a trade association comprising 21 member cooperatives. The association offers various services to Colorado co-ops, including communications, director education, safety programs to ensure the safety of co-op line crews, and legislative advocacy to prevent cost increases for members. CREA also focuses on resource adequacy, ensuring consistent power supply, and meeting new reporting requirements to governmental offices, a bill they supported. Additionally, they opposed a consumer protection bill that was deemed excessive, which fortunately did not pass. Singer also acknowledged Redetzke’s contributions to the CREA board.
Old, Unfinished, or New Business
There was no old, unfinished, or new business.
Questions
Kelly opened the floor for questions from the members.
Door Prize Drawing
Drawings were held for one $100 bill credit, two $50 bill credits, four $25 bill credits, one $100 Ace gift card from Western United, one Carhartt tool bag from Altitude Energy, one wine, chocolate gift bag, and a $1,000 Estate Planning certificate from JVAM. Three lucky members won the raffle for: an electric leaf blower donated by TSGT, an electric smoker, donated by CREA, and a YETI cooler donated by Integrity Tree Services. Raffle proceeds will go to the Shine Your Light charitable program.
Meeting adjourned at 12:25 p.m.
