January 2024 Board Meeting Summary

SDCEA Board of Directors meeting highlights, January 24, 2024 

Demand Side Energy Management– Demand side management of the electric grid refers to the development of programs aimed at altering the timing or amount of energy consumption by individuals or entities utilizing the grid. This is desirable because sudden increases in energy consumption can lead to power outages, raise market costs for consumers and utilities, and necessitate the construction, operation, maintenance and use of backup fossil-fueled energy production sources such as gas or coal plants to meet high demand if it is at a time where renewable energy sources are not producing (such as solar at night or days without wind). Battery technology at this time is insufficient to meet those demands. 

Tri-State Generation and Transmission Chief Energy Innovation Officer Reg Rudolph and Tri-State Demand Response Manager Hisham Noman attended the board meeting to discuss programs being developed and implemented by Tri-State to encourage consumers to become more efficient in energy use and cut back on energy use at peak times. Tri-State is the wholesale power supplier of electricity to SDCEA.  

Tri-State has received $26.8 million to implement new programs. These programs include distributed energy resource management, which involves using member-generated energy in real time to balance supply-side demand with demand-side resources. Additionally, there are pilot demand response programs in place for irrigation, smart thermostats, oil and gas, and water heaters.  

Tri-State is obligated by the state mandate to enroll 4 percent of Colorado’s peak 60MW load in demand side energy management programs by 2025. 

Revenue Deferral Plan – SDCEA has a Revenue Deferral Plan (RDP). This is like a savings account, established to offset unexpected events or expenses, while at the same time allowing the Cooperative to meet all the financial performance requirements set by its lenders – Rural Utilities Service, National Rural Utilities Cooperative Finance Corporation, and CoBank. 

The board voted to approve the 2023 RDP. The plan defers $450,000 that was deferred in 2018 and redeemed, as required, in 2023. The RDP requires SDCEA to redeem the deferral back into revenue between the years of 2024 to 2028 as needed to meet the Cooperative’s obligations and mortgage requirements and to maintain financial viability. 

Revenue deferral does not impact the allocation of margins to the membership or the payment of capital credits. 

SDCEA Headquarters HVAC system – The board decided to delay the vote on spending $170,000 with the company Trane for the time devoted to working with the design team and preconstruction services. This is pending more information on alternatives to the project. The payment would only occur if SDCEA does not sign a construction contract within six weeks after receiving the final pricing for the headquarters building’s HVAC replacement. 

Strategic planning session – The board and staff will hold a strategic planning session February 8 and 9, in executive session. 

Financial Report        

Year-to-date (December 2023): Revenues are 3.1% over budget due to selling more energy (kWh) than forecasted in the budget. The 2023 budget is based on SDCEA’s year-over-year average of energy (kWh) sales, with a slight increase for growth in number of consumers and sales.  

Year-to-Date, more energy (kWh) sales (2.46% higher) have occurred than 2022. The cooperative in turn purchased additional power to cover this increase in sales. This increased purchased power expense was primarily offset by a decrease in operating expenses due to several employment positions being open and lower than budgeted interest expenses on long-term debt. Overall, total expenses are within 1% of the budget.