October 2022 board meeting summary
SDCEA Board of Directors meeting highlights, Oct. 26, 2022
Wildfire Mitigation Rate Rider– Reducing wildfire risk on SDCEA’s electrical system is the goal of SDCEA’s aggressive wildfire mitigation program, implemented in 2020 and funded by the cooperative’s current $7 a month rate rider. In 2022, the amount collected is projected to be $1,170,624. Funds generated from the rider are designated only for use in SDCEA’s wildfire mitigation program to reduce wildfire risk. Project cost year to date is $1,077,414.
At the current $7 a month rate, the project is estimated to be completed in December 2026, at a $9,150,000 price tag. The SDCEA Board will continue with SDCEA’s wildfire mitigation plan and increase the rate rider in 2023 to $8 a month. At the $8 level, the project will cost $8,830,956, saving cooperative members $319,044, and is expected to be complete at the end of 2025. Project costs, timing and additional savings attributable to increasing the rate rider to $9 a month in 2024 as planned were not discussed at this time.
SDCEA’s mitigation contractor, Integrity Tree Services, completes 5-7 miles of line per month on average. Crews work year-round, but consumers can expect to see fewer crews on the project around the holidays. Approximately 267 miles of line remains to be cleared, or 35 percent of the total system. Total miles cut so far is 53. Total acres cut so far is 206.
Integrity will increase from two to four crews working in 2023. Integrity cannot sell the trees that are cut down, but often works with homeowners in the area to give the material to them for their use.
About 50 percent of SDCEA’s system has been documented with drone imagery. SDCEA uses drone imagery to map cutting areas, prioritize efforts, and to identify potential hazards on our electrical system, the costs of which are also paid for by funding from the rate rider.
SDCEA has submitted a grant request to the Colorado State Forest Service for $480,000 for a portion of the funds for the 2022-23 Forest Restoration and Wildfire Mitigation, Fuels and Forest Health Project. If awarded, grant funds will help sunset the wildfire mitigation rider sooner.
Wildfire mitigation also has a significant added benefit to members in that it helps reduce outages caused by trees in lines.
Charitable Giving – SDCEA approved funding for its 2023-24 scholarship program, participation in Junior Livestock sales, corporate donations, the matching grant program and community grants.
Director/CEO Nominating Committee Report- Michael Robinson was selected for recommendation for appointment to the SDCEA Board by the board’s director/CEO nominating committee to fill the at-large position. Robinson brings a wealth of broad-based executive and board experience. He is an entrepreneur, technologist, global leader, mentor & investor who possesses a rich history of global executive leadership in telecom infrastructure operations and engineering, technology innovation, corporate security and fraud detection, and banking and business risk management. His current board experience includes serving on the board of a publicly owned multistate banking corporation and also as Board Chairman of Colorado Central Telecom, a local broadband service provider. The formal recommendation for board action will take place at the November board meeting. If the board votes to approve the selection of Robinson in November, he will be seated at the December board meeting.
Capital Credit Retirements– The board approved the retirement of capital credits to be paid to members who had service with SDCEA in 1997 and 2004 for a total of $239,080.
Half of the retirement, $119,540, is the patronage that Tri-State refunded to SDCEA in December of 2021. The other $119,540 is returning SDCEA’s membership patronage. SDCEA will include an insert in member bills in December, which will explain what capital credits are.
Board member Suzy Kelly read a letter from 1959 sharing how capital credits helped pay off initial infrastructure at SDCEA and discussed how payouts of capital credits have changed over the years.
Annual Meeting Date and Location– SDCEA’s annual meeting will be June 15, 2023, in the commons area at Buena Vista High/Middle School with light refreshments. Details to follow.
Mesa Hotline School Donation Request– The Mesa Hotline training school for line workers, located in Grand Junction, must relocate. The school is asking for assistance paying for infrastructure costs. SDCEA’s line workers attend the school for continuing education. Other cooperatives in the state have agreed to donate $5,000 to the school, and SDCEA will do the same.
Finance (Year-to-Date) – Revenue is under budget. SDCEA budgeted for 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 the first 5 months of 2022 were warmer than the first 5 months of 2021, SDCEA sold less energy than forecasted, therefore revenues are under budget. SDCEA is a very weather-dependent cooperative. Even though we budgeted for a slight increase in energy sales for 2022, the actual energy sales did not reach forecasted amounts, due to warmer weather.
New services that have connected to SDCEA’s system guarantee 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. This is mainly due to some contracted maintenance that was performed that was not in the budget.
Employee safety– SDCEA’s commitment to employee safety is evident in its record this year. There have been no lost time or reportable safety incidents, an impressive statistic considering the number of people and amount of equipment involved with power outages like September’s outage near Howard that lasted 13 hours for some members. SDCEA plans to rebuild a line in the area over the next few years to improve service to members and to create backup power supply options to restore power more quickly to members during outages in the area.