CEO REPORT A
s I write this column, many of our Northwestern Electric family are still recovering from the devas- tating ice storm we experienced at the beginning of
2017. The total equipment replaced so far for this storm is around 5,500 poles, 2,800 crossarms, and 92 miles of wire. In light of all that, the start of a brand new year also gives us time to think back on what were the most memorable moments of 2016.
Most of our major outages last year were a result of the drought conditions, high winds and fires. We lost over 200 poles in fires from February to April. We lost another 60 poles in a thunderstorm at the end of April. We are always learning from these events.
We started several new projects in 2016 I’m excited to talk about. One of the projects is a new meter program. We began installing the new meters last October. As of the end of March, the contractors have installed around 7,500 new meters. These meters will enable us to receive reads every 15 seconds. The faster reads will allow us to see when your meter is not reporting and will help tremen- dously with the outage response time. For years, electric cooperatives went with the old analog-style dial meters without needing to change them. Now, because of tech- nology advancements, we may be forced to change meters every 10-15 years. These new meters will enable you to monitor your consumption more precisely so you can make more informed energy choices. The meter can also notify the utility of a power outage or allow us to remotely switch electricity service on or off.
The second project—vehicle tracking—will help us maneuver the crews during large outages and enable us to manage the crews more efficiently. This will also provide a layer of safety for the linemen, as many times they are working alone or in two-man crews. Many of our linemen will begin utilizing iPads in the field this year as well.
The third project Northwestern Electric just completed is a 125kW community solar farm directly behind our headquarters. This project will provide our members a simple and affordable option for renewable energy. Our members will have the option to purchase one or more panels, each sharing the benefits without having to in- stall or maintain solar panels on their roof or property. Members will receive a credit on their bill for the energy produced by the solar panels. Community solar benefits all of our members because it reduces peak demand power costs from WFEC. We will begin to market this project sometime late summer.
The fourth project I want to mention is our new building and warehouse expansion in Buffalo. Northwestern Electric acquired the town of Buffalo and the surround- ing area in 1943 from Panhandle Public Service Company. In 1959, we purchased the old creamery building and converted it into the district office headquarters. The facility served the members in the Buf- falo area for over 55 years. Many of you attended the open house in September for this wonderful addition to Buffalo and the surrounding areas. The employees are completely moved in and we are really proud of this building and our commitment to this community.
Tyson Littau, CEO
I also want to mention capital credits. As a member- owned cooperative, NWEC operates as a not-for-profit utility. Any profits made by the Cooperative are referred to as margins. At the end of the year, the margins are allocated to each member in proportion to the amount of electricity they purchased. We have been allocating credits since 1940 and have returned more than 12 million dollars to our members. This year, NWEC will pay the 1997 operating margins back to our members. Last year (for the first time ever), our wholesale power supplier retired capital credits. We received $920,000 from WFEC for the years 1956- 1976. We will attempt to pay those margins to our mem- bers as well. If you were on our lines from 1956-1976, or in 1997, you should see a credit this year on your bill. We plan to retire these amounts in April. Your board and Northwestern Electric personnel have worked really hard to get your capital credits paid back to you.
Maintaining dependable service at an affordable price remains the cornerstone of a cooperative’s business. To maintain the reliability, quality, and affordability of the services NWEC provides to our members, it is sometimes necessary to adjust our prices. As mentioned in the Febru- ary and March newsletters, NWEC is implementing an overall rate increase of 2.93 percent that will apply begin- ning with the April 2017 billing. The slowdown in eco- nomic growth, milder weather, changes to our power costs from Western Farmers, and increases in insurance, labor and materials all contributed to the need for an adjustment to the rates. The study was based on the 2015 fiscal year. (The 2017 ice storm is not reflected in this adjustment.)
As you can see, there is a lot going on at your coopera-
tive. Once again, I just want to thank you for supporting Northwestern Electric and encourage you to attend our 76th Annual Meeting for more updates.
2016 Annual Report 3
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