November 2022 board meeting summary
SDCEA Board of Directors meeting highlights, Nov. 29, 2022
Longtime board director retirement – Suzy Kelly, SDCEA board member for nearly 33 years, led the Pledge of Allegiance to begin the meeting. The board meeting was her final as a director, as she announced her November retirement earlier this year.
The board later adopted the Director/CEO vacancy committee’s recommendation to appoint Michael Robinson to fill the remainder of Kelly’s term, which expires in June 2023. Vice-president Dan Daly thanked Kelly for her years of service to the organization and expressed his appreciation of her comprehensive knowledge about SDCEA. Director Attebery said it had been an honor to get to know Kelly and absorb her knowledge of the cooperative’s operations. Director Abel praised Kelly for bringing balance to the board, and that the board would miss her and thanked her for her work. Kelly thanked the board for a reception held in her honor the night before. “It’s a great organization. We get good people in here,” Kelly said. Kelly was also honored at the Colorado Rural Electric Association Innovations Summit meeting in November.
Board Chair Joe Redetzke was unable to attend the meeting due to a family obligation. Board member Nick Hellbusch was absent from the meeting.
Growth and energy sales – While SDCEA has experienced growth in the number of services provided by the cooperative, 476 more than last year as of October, that growth also comes with the need for increased staff and operating costs. New consumer-members pay for installation of electric service to their individual homes or businesses, but there are ongoing expenses to pay for the maintenance and operation of SDCEA’s electric system. The cooperative continues to have comparatively low energy sales on new services relative to other co-ops. This is because many new and existing services use energy for only a portion of the year, either on occasional weeks or weekends or during the summer only.
2023 budget – On November 17, the Board’s Finance Committee met to review, discuss, and analyze the budget presented by staff. The result of that meeting was a recommendation from the Finance Committee at this board meeting to adopt the 2023 budget. The board adopted the budget as presented.
Bylaw changes – SDCEA attorney Casey Martin presented a proposed change to SDCEA bylaws to allow a 60-day notice of member meetings. Previously, the notice window was 30 days. The change would allow more notice of the member meeting and time for members to return ballots, as well as avoiding two separate mailings at a cost of more than $10,000 each.
The second change would add a provision to the qualifications to serve as an SDCEA director. Directors must protect the confidentiality of personal identifiable information and other confidential information provided to SDCEA by members, consumers, employees, directors, vendors, and the public.
The board was unable to vote on bylaw provisions because a minimum of six directors must vote on a bylaw change. With two directors absent, that was not possible, and the measure was tabled.
Policy changes – The board approved two policy changes. The first, to policy C-12, Capital Credits, clarifies that capital credits of a deceased member may be dispersed to an estate managed by a trust. The second change, to policy C-20, puts in writing SDCEA’s policy and process for consumer interconnection applications regarding net metering. This mimics Public Utility Commission rules.
Energy Outreach Colorado donation – The board voted to donate $3,000 to Energy Outreach Colorado in 2023, an organization that provides assistance to consumers in need of help in paying their heating bills.
Legal items – Martin said SDCEA has agreed on a contract with Colorado Central Telecom regarding terms of payment for work on the now-complete line and fiber project along CR 162 in Chaffee County.
No communication has been received from the town of Buena Vista regarding SDCEA and the town’s franchise agreement.
In response to a law enforcement request, SDCEA has been summoned to testify in a trial in Fremont County regarding an alleged illegal marijuana grow operation. It is SDCEA’s policy to respond to such requests only if issued by a court order or administrative subpoena. The cooperative is otherwise obligated to protect members’ personal and account information. The exception to this requirement is when required to respond to a legal order.
Finance (Year-to-Date, October 31, 2022) – Revenue is under budget by 2.1 percent. SDCEA budgeted for a 1.5% increase in energy sales (kWh) for 2022 vs. 2021. This forecast was based on SDCEA’s average energy sales growth year over year for the last 5 years which averages about a 2% increase each year. Because 4 of the first 5 months of 2022 were warmer than the first 5 months of 2021, SDCEA sold less energy than forecasted, and therefore revenues are under budget. Because of the high percentage of residential services, SDCEA is a very weather-dependent cooperative for energy sales primarily in the heating season months from November through March. Even though we budgeted for a slight increase in energy sales for 2022, the actual energy sales did not reach forecasted amounts.
New services that are connected to SDCEA’s system guarantee additional revenue from the Service Availability Charge, but not necessarily an increase in energy sales. SDCEA’s Service Availability Charge revenue is tracked and is on budget.
Expenses are slightly over budget by about 1.2%. This is mainly due to some contracted maintenance that was performed that was not in the budget, as well as the impact of inflation’s higher prices for fuel and other supplies and services in 2022. The cooperative is on schedule to meet its debt ratios by the end of the year.
Capital Credits will be issued with November billing. An insert will be sent with bills for eligible account holders explaining capital credits.
SDCEA’s billing team is working on a process in our software to credit Net-meter accounts with excess banked production on their 2022 December bill instead of a check in the mail in January. This was a suggestion by member-consumers and will save the cooperative significant postage and labor in issuing the checks.
Employee safety– SDCEA’s commitment to employee safety is evident in its record this year, as there have been no lost time or reportable safety incidents as of November. SDCEA’s safety record will allow a $5,974 insurance premium reduction next year.
Operations – Placement of a new SDCEA antenna on the Badger Mountain communication tower is expected to improve radio coverage in the eastern portion of the service territory.
Operations and engineering are investigating a new delivery point in the Querida substation area.
SDCEA plans to issue a contract to Altitude Energy to rebuild 12 miles of line along the Fremont County cutoff along CR 1A to Custer County. The project is expected to improve service to members served from the Howard substation and to create alternative power supply options to restore power more quickly to members during outages in the area.
SDCEA met with Colorado Central Telecommunications to investigate both companies’ long-term fiber optics needs. Both companies could benefit from federal funding opportunities.
2022 Vegetation Management Progress Year-to Date progress:
St. Elmo; 42 acres, 11 miles
Independence Pass; 30 acres, 8 miles
Cotopaxi North; 72 acres, 18 miles
Cotopaxi East; 28 acres, 7 miles
BV to Twin Lakes 34 acres, 9 miles
Crews currently working in Lake, Fremont, and Custer counties
Spending Year to date (Jan-Oct) $1,198,279
Projected spending through 2022 $1,662,414 (includes droning)
Projected Spending in 2023 $2,480,400