July 2024 Board Summary
PrintSDCEA (Sangre de Cristo Electric Association) Board of Directors Meeting Summary, July 24, 2024
SDCEA Headquarters HVAC System and Lighting Replacement – The Board authorized entering a contract with a general contractor, Bassett Construction, to spend up to $3,474,037 plus 10 percent contingency to replace the HVAC, lighting, and electrical system at the 39,000 sq. ft. SDCEA Buena Vista Headquarters office, shop, and warehouse building.
The proposed project will not be paid for entirely by SDCEA. Since 2022, the cooperative has budgeted $2 million for the project. The cooperative has applied for grant (USDA REAP) funding of $770,000 and will receive a $71,000 energy efficiency rebate for the HVAC and lighting from Tri State. Tri-State may also provide financing for the project with a below-market loan. In addition to having a new system and better lighting, the new equipment will reduce energy use and will reduce operating costs.
Acknowledging the cost of replacing the system, CEO Gary Kelly noted several engineers and HVAC companies have evaluated the existing system over the past three years. The evaluations revealed the existing HVAC system is malfunctioning and does not meet national (ASHRAE) health and safety standards and codes and cannot be repaired due to the age (more than 20 years) of the equipment. Life expectancy of a commercial system is 15-20 years. The current heating system is Steffes Electric Thermal Storage. The cooling is traditional AC units. All evaluations recommended a complete removal of the existing system and replacement with a highly energy-efficient system based on heat-pump technology. The new system will also include better zone control and more efficient duct and venting.
Included in the project will be reconstruction of the drop ceiling throughout the building since it will need to be removed to replace the HVAC system. Existing ceiling lighting in the building will also need to be removed during HVAC demolition. The decision was made not to salvage and reuse the original lighting instead replace it with new energy-efficient LED lighting.
At present, the building is without cooling, or fresh air exchange. Recently, the malfunctioning system triggered the building’s fire alarm, necessitating a response from the local fire department. Additionally, the building has not had a functioning heating system for 2 years.
A request for bids to replace the HVAC and lighting was sent out three times during the past 2 years. The first time, no contractors bid. The second time, there was only one bid that far exceeded the budget. On the third try, three bids were received; Bestway Mechanical at $1,575,530; Bassett Construction at $3,474,037; and Trane at $4.2 million. A bid offer was originally awarded to Bestway, but contract terms were not met.
Bassett Construction submitted the next lowest bid, and a contract for the project is being prepared. SDCEA and the consulting engineer met with Bassett to review the project schedule. As part of this meeting SDCEA asked the contractor to look for areas where they could provide value engineering which would reduce their price. Bassett felt there were areas where savings could be achieved.
Special Capital Credit Retirement – The board approved a special capital credit retirement to apply to uncollectable accounts.
Every year, SDCEA allocates its operating margins (profits) back to our customers who pay an electric bill. Each fall, the board of directors assesses SDCEA’s financial health to determine if we can “retire” or refund these profits to our members in the form of a bill credit or check sent if someone is no longer using electricity from SDCEA. This is known as a general retirement. During a general retirement, a specific amount from certain years’ profits is returned to the members, based on the amount of power a member used in that year.
In addition to general retirements, SDCEA has a system for special capital credit retirements. These retirements apply to members who left SDCEA with an outstanding bill. Their capital credit balance will be applied to that unpaid bill.
Systemwide solar/distributed generation Hosting-Capacity study – Initial results of a completed systemwide solar/distributed electric generation study were presented to the board. This study aims to assess the overall amount and impact of consumer-owned distributed generation (such as rooftop solar) on SDCEA’s energy distribution system.
Financial Report
Year-to-date (June 2024): Revenues are 1.5 percent under budget.
- 2024 has been warmer compared to 2023.
- A cooler May pushed kwh sales up a bit.
Year-to-date (June 2024): Total expenses are 4.4% under budget
- Purchase power costs are down because we are not selling as much power as budgeted.
- A&G expenses are below budget due to open positions.
- Interest expenses are under budget due to delayed borrowing for large construction projects.
Grant Submission information:
- New ERA Funding – Submitted letter of intent for potential solar and batteries for Querida/Kettle substations in Custer County. Notification may be sent out at the end of July.
- Submitted a joint application with San Luis and United Power and other cooperatives for GRIP 2 funding. Projects are for Grid Hardening and Fiber Optics installation. Total SDCEA Grant request is for $9,674,701.
SDCEA would need to contribute $3,224,900. Total amount $12,899,601. Notifications may be sent out this fall.
Executive Session – The board adjourned the executive session to discuss matters held in confidence. No action was taken after the executive session.
