84th Annual Meeting to Be Held Drive Thru Style
Following the success and positive feedback we received from the drive thru style Annual Meeting that we had last year, the Board of Directors opted to replicate that format again this year. Just as we did last year, the meeting will be held at the Immanuel Lutheran Church in Elk Point from 9am – 11am. More details can be found in this edition of the Cooperative Connections.
First and foremost, safety is of the utmost importance at the Cooperative. Not only does that include employee safety, but also the safety of our members and the public in general. The employee group holds regular monthly safety meetings. This ensures that our employees receive updated and ongoing training throughout the year. In 2021, we were able to resume our Co-ops in the Classroom program, where we educate elementary students on being safe around electricity. This is an excellent program, which we will continue to promote. We will continue investing in our safety programs for our employees and educating our members on how to safely work around power lines.
One topic that has been on everyone’s mind recently is the status of our new facility. To bring everyone up to speed, we began the process of relocating to a property that we purchased approximately 1 mile south of Elk Point on 477th Avenue. For the past year we have been going through to process of designing a facility that will provide a safer environment for our employees and members. This facility will also meet our current and future needs. We have held meetings with various contractors to build the facility and selected Nelson Commercial Construction from Sioux City to be our general contractor. We are waiting final approval of an environmental review from the United State Department of Agriculture – Rural Utility Service to begin construction. We should receive that approval by April and construction will begin shortly after that approval is given. We hope to be in the new facility by the end of 2022 or early 2023. This 5-acre property will house our material, equipment, and offices in a 17,000 square foot building. When the appropriate time comes, we will sell our existing properties located in Elk Point.
The Cooperative continues making investment in our utility plant by upgrading and replacing aging infrastructure. As of the end of 2021, 50.5% of our 517.2 miles of power lines were underground. In 2022 our crews will convert another 2 miles of overhead line to underground in the Jefferson area. We work with our engineers to identify areas on our system that need addressed and put together a 4-year plan to accomplish those upgrades. We continue striving to improve our reliability and update the infrastructure throughout the system. In the past year we have seen lead times for materials extend out to over 12 months in some cases. This makes our planning more difficult, and we encourage our members who are planning projects to be in touch with us early in the process, so we are able to plan accordingly.
The electric industry continues going through dramatic changes in how electricity is produced and utilized. Weather related events in 2021 opened many people’s eyes to the risks we are exposed to if we limit our energy production to only a few types of sources. In February 2021, extreme cold stretched from Northern border to the Southern border. While these types of events are nothing new for us in South Dakota, our neighbors to the South are not prepared for these cold events. During this cold streak, the power grid was put to the test as load out paced generation from Texas to North Dakota. Wind generation was not available, Natural Gas generation was constrained due to a variety of issues including a lack of supply. This caused the energy market prices to spike. The lack of available generation caused temporary outages throughout the region. Fortunately for our members we were able to avoid any issues. This situation has reinvigorated the discussion of why we believe an all of the above generation approach is the most appropriate. By having an array of available generation sources, we are in a better position to be able to serve our load while having a hedge against unexpected market volatility.
We continue to monitor the developments of products such as electric vehicles. Nearly every vehicle manufacturer has announced and made plans to electrify at least a portion of their vehicle fleet. Many people still view electric vehicles as a niche market consisting of high priced, small cars with a limited usability. However, this view is beginning to change as these vehicles become more common. Within the next year, there is expected to be no fewer than 4 different full size electric trucks on the market. The electric Ford F150 Lightning has been so popular that Ford sold out of the 200,000 pre-ordered vehicles and has announced that they will increase capacity. In many cases, the total cost of ownership can be cheaper for an electric vehicle than it is with an internal combustion engine. As more competition enters the market, I expect the upfront cost to electric vehicles to decrease. From the Cooperatives perspective, these vehicles are an opportunity for growth. We will continue to explore how we fit in the electric vehicle equation to ensure that our members are able to charge their vehicles in the most advantageous way.
Each year the Board of Directors and management reviews our budget and financial forecasts. We consistently budget very conservatively, which helps keep our rates steady. For the last several years our weather has been relatively mild, which had led to stagnant kilowatt hour sales. Starting in 2021 we began experiencing rising material costs and interest rates began creeping up. This has put upward pressure on our rates in the last 12 months. However, for 2021 we still managed to meet the financial requirements set by our lenders. For 2022 we anticipate being able to keep our rates stable for another year. Assuming our forecast holds true, this will mark the 6th straight year without a rate change.
We look forward to seeing you at this year’s Annual Meeting. With you as our members, the future looks bright for Union County Electric Cooperative.
Quote of the Month:
"Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover." – Mark Twain, Author