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Cordova Electric Cooperative > CEO  > 2017 CEO Report
Cordova Electric Cooperative

2017 CEO Report

Dear Owners of Cordova Electric Cooperative:

It has been another year of strong financial and operational performance for your Cooperative.  Kilowatt hour sales rebounded from last year’s drop with a 12.5% increase over last year. Once again we were able to operate the Cooperative without increasing rates or borrowing money. Our debt dropped below $14,000,000 and member equity rose to over 54%.  Strong sales and operating within our budget increased cash reserves to over $2,500,000 going into winter, positioning CEC to pay Capital Credits for the first time in 2018. We will be explaining what Capital Credits are at our Annual Meeting on March 19 at Mount Eccles Elementary School.

We budgeted a margin of $429,013 and our unaudited margin is $1,032,416 due in large part to a strong fish processing season. We generated an unaudited positive cash flow of $800,179 for a cash balance of $2,509,923. While the past few years of strong financial performance and debt retirement have positioned CEC with a very strong financial footing, new pressures will be facing us as we move forward. Our Power Creek Plant, system automation, and diesel plant are all aging and in need of maintenance. Interest rates are rising, which creates both cash flow and borrowing pressures for the Cooperative.

CEC has partnered with the Department of Energy (DOE) and the US National Laboratories in a grid modernization lab project (Google: GMLC) that will help analyze our system to get the most value out of our investment upgrades.  Specifically, the DOE will assist with installation of a grid scale battery, while the Labs will provide research and modeling of system automation.  A grid scale battery, plus an increase in the amount of water the regulatory agencies allow us to use at Power Creek, will result in approximately 115,000 gallons of fuel savings starting in 2018.  Our excellent loss control record of no major accidents, legal issues, or insurance claims has continued to reduce our insurance costs and apply all of our resources to operating and maintaining your energy system.  Other initiatives like electric vehicle use will help us grow sales and fully utilize our available hydropower to keep rates in line.

I will be working with our Congressional Delegation to seek assistance for developing more hydro on our grid to get CEC completely free of diesel fuel costs.  Even at 68% hydro this year, fuel costs were $1,510,662 or 23% of the total cost of power production. Hydro presents our best opportunity to manage the rising cost of energy in Cordova.

The Board of Directors welcomed new director Stephen Phillips this spring, who was appointed by the CEC Board to fill a vacancy, and Joe Cook, who was elected by the membership to serve on the Board after taking a break from his many years of service from the 1990’s through early 2010’s.

Our theme for this year’s Annual Meeting is “CEC–Serving our members and our community”.  CEC employees and Board participate in a variety of community service opportunities ranging from Mayor/City Council to Boards and Commissions to non-profits. CEC makes direct donations to such community events and services as the community Christmas Tree, Iceworm Festival, Cordova Trap and Gun Club, Ducks Unlimited, a variety of school and community related events, and through the CoBank Sharing Success program to donate to a worthy cause that will benefit the community.  We make small, strategic donations of cash and/or services that benefit the whole membership or help CEC in communicating energy safety and efficiency for the community to manage the cost of electric energy use.

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 hear reports of the activities and goals of the Cooperative, and communicate any concerns or expectations you have of your Cooperative.

Respectfully,
Clay Koplin, CEO

NOTICE

The Power Cost Equalization (PCE) program is currently unfunded for the State’s fiscal year 2020. If not resolved by month end, electric bills for July usage may not receive PCE credit. Please be aware of this potential increase and, as always, continue to practice electrical conservation.