Cordova Electric Cooperative
2017 CEO Report
Dear Owners of Cordova Electric Cooperative:
Despite strong headwinds on several fronts, your Cooperative performed well this year. A sharp drop in kilowatt hour sales had revenues down almost 10%, but we were able to operate the Cooperative without raising rates or borrowing money. In fact, we paid down $810,526 in long term debt for a new total of $14,792,228. This has increased the members’ ownership share of CEC to over 50% Equity which means the members now own more of the cooperative assets than the bank. We budgeted a margin of $408,484 and our unaudited margin was better than budgeted at $505,476 despite the low revenues. More importantly, we generated an unaudited positive cash flow of $92,677 for a cash balance of $1,709,744. We have worked hard to build a cash reserve large enough to pay fuel bills and operating emergencies through the winter without having to resort to borrowing.
Operationally, we had the highest percentage of hydro production since 2005 at 77.20%, once again breaking several all-time monthly hydro records. 2016 fuel prices were up nearly $0.50 per gallon from 2015, but still well below the recent average. Lower fuel prices and strong hydro production resulted in lower electric bills for 2016. There were no lost time work accidents by CEC employees, setting a new all-time record of over four years without a lost-time accident through 2016. This reduces insurance rates and generates rebates due to CEC employees’ focus on protecting their personal safety and that of the general public.
In October of 2016 I was invited by the U.S. State Department to travel to Greenland and participate in a workshop to share lessons learned in arctic energy development with their sponsorship. In many ways CEC is ahead of most electrical utilities in renewable energy use and best operating practices, but there are some excellent opportunities that Greenland is leading including the use of electric vehicles and solar energy generation. The CEC Board and staff are working on options to encourage the ease and cost of operating electrical vehicles in Cordova to help use our local energy resources and reduce costs and environmental impacts.
The Crater Lake feasibility study was completed this January, and is available on the City of Cordova’s website via link: http://www.cityofcordova.net/government/notices-announcements/public-notices/771-crater-lake-feasibility-study. The CEC Board will be carefully considering whether to proceed with geotechnical evaluation and design of the project this spring.
Other exciting events during the year included CoBank’s Sharing the Success Program, a $10,000 grant funded 50% by CoBank and 50% by CEC to perform electrical upgrades to the Cordova Arts and Pageants stage lighting design for the North Star Theatre. The Sharing the Success program will run for at least one more year, and provides a one-time grant to a single Cordova 501C3 not for profit of up to $10,000 and the applications will be advertised this summer. The Alaska Center for Energy and Power and Sandia National labs have nearly completed the Department of Energy study evaluating CEC as the site for advanced energy storage technologies. This project may result in a large grid-scale storage battery or other battery technologies to store more of our excess hydropower for use later instead of diesel generation. CEC also hosted a well-attended Customer Appreciation Day in August.
The faces of CEC continue to change. In November of 2016, Scott Newlun was hired as the Manager of Generation and Distribution and Emma Merritt as the Manager of Administration and Finance. Brian Wagner was hired as a power production apprentice, while Ben Simpler joined CEC as an apprentice lineman. During the course of the year we also bid farewell to Tim Dillon and Dan McIntosh who moved on to pursue their careers elsewhere. The Board of Directors welcomed Alexis Cooper and Charles (Sam) Blackadar. We have talented and committed employees and Board Directors.
Our theme for this year’s Annual Meeting is “Growing Cordova”. CEC has opportunities through our connections with the USDA to encourage economic development, food production, energy efficiency, and other opportunities for Cordova and we plan to evaluate and implement those programs if they can deliver better value to you, the members.
The Annual Meeting will again be webcast and tightly planned to last 90 minutes or less. I encourage you to attend the meeting in person to consider a Bylaw change and a Bylaw Resolution, elect your new Board Directors, hear reports of the activities and goals of the Cooperative, and communicate any concerns or expectations you have of your Cooperative.