2018 CEO Report
Dear Owners of Cordova Electric Cooperative:
This was a year of transition for CEC as we shifted from reduced capital budgets, debt reduction, and training and developing new staff to larger scale maintenance and improvement projects. From high-resolution fuel metering to geotechnical explorations at Crater Lake to solar evaluation and site explorations we are continuing to pursue projects that reduce our use and cost of diesel fuel and deliver more renewable energy. With the Power Creek hydroelectric project nearly 20 years old, we are also replacing aging and outdated electronics and a deteriorating rubber dam. At Humpback Creek hydroelectric project, we are also replacing old electronics and making repairs to weakening rock along the pipeline. We installed new fiber optic feeds to both projects to improve the speed and capacity of communications and reduce outages and callouts.
One of the most exciting events this year was the first-time return of patronage capital to the members of CEC. A strong equity position with lower debt and a strong cash reserve allowed CEC to return capital credits to the membership for the first time in CEC history. As we celebrate our 40th anniversary, it is exciting to find our balanced stride as a Cooperative – taking care of what we own, building a path to the future, and returning value to the customers.
We completed the first year of the RADIANCE grid modernization project with the Department of Energy, Sandia-Idaho-Pacific Northwest National Laboratories, the Alaska Center for Energy and Power (ACEP), and others. Our work with Sandia National Laboratories will result in installation of a new grid scale battery that is estimated to save 35,000 gallons of diesel fuel annually and create better opportunities for wind, solar, and other renewables. Crater Lake Water and Power project may be suitable for pumped storage to bring us near to 100% renewable energy year-round. Other RADIANCE projects include advanced metering to provide new services to homes and businesses, special timing and rates for electric vehicle charging, a new electric boiler that can use excess hydro to save 10,000 gallons of fuel used to keep our diesel engines warm and ready to run in summer and other system upgrades.
2018 was an average year financially. We budgeted a margin of $466,123 and our unaudited margin is $583,708. Sales were down from last year due to a smaller pink salmon run and reduced ferry service. We generated an unaudited negative cash flow of -$122,360 for a cash balance of $2,387,563. As mentioned in last year’s report, significant system upgrades and maintenance plus rising interest rates resulted in negative cash flows and a loan of $1,400,000 for the battery energy storage system (BESS).
We thank retiring Board Directors Cully Wooden and David Little for service as they completed their terms and retired from the Board in March of 2018. The membership elected returning Board member and Chairman Scott Pegau and new board members Kara Johnson and Dede Srb.
The theme for this year’s annual meeting is “Continually Moving Forward”. We are working toward modernizing and improving our system to enable us to produce electricity more efficiently for all our members. The Annual Meeting will start with dinner, then conduct the business meeting which will last about an hour. I encourage you to attend this brief but informative meeting to learn more about your Cooperative’s goal and offer any questions or comments you’d like to share.
Respectfully,
Clay Koplin, CEO