REGULAR BOARD MEETING June 27, 2019 PLEDGE OF A! … · OWEN ELECTRIC COOPERATIVE REGULAR BOARD...
Transcript of REGULAR BOARD MEETING June 27, 2019 PLEDGE OF A! … · OWEN ELECTRIC COOPERATIVE REGULAR BOARD...
OWEN ELECTRIC COOPERATIVE REGULAR BOARD MEETING
June 27, 2019
PRESENT The regular meeting of the Board of Directors of Owen Electric Cooperative, Inc.,was held at the Headquarters Building in Owenton, Kentucky, on June 27, 2019. All Directors were present, along with: Mark Stallons, Rusty Williams, Jim Petreshock, Scott Lawless, Teresa Hamilton, Jennifer Taylor, Christel Buffin and Attorney James Crawford. Guests present were: Kerry Bowlin, Blevins Bowlin, Shawn Murdock, and T J Scott, Charlie Cain.
CALL TO ORDER, PLEDGE OF A!-LEGIANCE AND INVOCATION
The meeting was called to order, and the Pledge of Allegiance and invocation were given by Jim Petreshock and Mr. Stallons, respectively.
ADOPTION OF AGENDA Upon a motion by Rick Messingschlager, seconded by Eddie McCord, the Board
voted unanimously to adopt the June, 2019, Board Meeting Agenda as presented.
MINUTES APPROVED Upon a motion by Charlie Richardson, seconded by Hope Kinman, the Board
voted unanimously to approve the May 28, 2019, Board Meeting Minutes as submitted.
MEMBER CONCERNS
Several board members discussed the many compliments they heard regarding good service from members at the annual meeting.
NEW MEMBERS ACCEPTED !
The Directors then reviewed and accepted the listing of 537 New Members.
REVIEW OF LISTING OF TERMINATED ACCOUNTS
The Directors then reviewed and accepted as information a listing of the terminated accounts.
REVIEW OF PRESIDENT'S CONSULTANT'S AND DIRECTORS' EXPENSES The Directors then reviewed and accepted as information a listing of the previous
month's expenses incurred by the President, Consultant and Directors.
UNCOLLECTIBLE WRITE-OFFS AND CAPITAL CREDIT PAYMENT
RegularBoard Meeting
June 27, 2019
Agenda
• Directors Present/Absent• Call to Order/Pledge of
Allegiance/Invocation
Agenda & Minutes
• Adoption of Agenda (Tab 3)
• Approval of Minutes of Previous Meeting
(Tab 4)
Review/Discuss Member
Compliments and/or Concerns
Review Agenda
• Review New Members: 537(Listing on Board Table)
• Review Listing of Terminated Accounts:268 Members at $31,974.19(Listing on Board Table)
Review Agenda
Review of President’s, Directors’ and Consultant
Expenses
May 2019
Consent Agenda Items
• Approve Uncollectible Member Write-offs: 78 Members at $15,773.34 (Listing on Board Table)
• Approve Payment of Capital Credits: $23,395.61(Tab 10)
• Approval of Consent Agenda Items– Motion ________________________– Second________________________
DepartmentalReports
Board of DirectorsJune 27, 2019
Department ReportSafety, HR, Accounting
21
22
1 3
2
2
41
1 1
3.13
5.48
3.96
2.36
-
2.22
-
1.00
2.00
3.00
4.00
5.00
6.00
0
1
2
3
4
5
6
7
8
2014 2015 2016 2017 2018 2019
Inci
dent
Rat
e
Num
ber o
f Inc
iden
ts
Lost Time Restrictions No Lost Time Incident Rate
KPI Threshold Target Stretch YTDIncident Rate 3.77 1.51 0.00 2.22Severity Rate 42.23 21.90 0.00 31.07
Safety MetricsIncident Rate
KPI Threshold Target Stretch YTDIncident Rate 3.77 1.51 0.00 2.22Severity Rate 42.23 21.90 0.00 31.07
Safety MetricsSeverity Rate
12.54
79.88 76.91
221.00
-
31.07
-
50
100
150
200
250
2014 2015 2016 2017 2018 2019
Medical Plan - OEC
• Funding = $145,555• Claims = $267,147• Deficit = ($120,592)
May 2019
• Funding = $723,467• Claims = $933,412• Deficit = ($209,945)
YTD
$- $50,000
$100,000 $150,000 $200,000 $250,000 $300,000 $350,000
Jan Feb Mar Apr May
Plan Contributions Claims Funding
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
Jan Feb Mar Apr May
Plan Contributions Claims Funding
Medical Plan - KREC
• Funding = $2,110,129• Claims = $2,470,198• Deficit = ($360,069)
May 2019
• Funding = $10,627,429
• Claims = $10,630,597• Deficit = ($3,169)
YTD
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Jan Feb Mar Apr May
Plan Contributions Claims Funding
Jan Feb Mar Apr May $-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Plan Contributions Claims Funding
Statement of OperationsMAY 2019
5 Year ComparisonOperating Margins
MAY
($348) $10
$11
$12
$13
$14
$15
$16
($400)
($300)
($200)
($100)
$0
$100
$200
$300
$400
$500
2015 2016 2017 2018 2019
Mill
ions
Thou
sand
s
Operating Margins Operating Revenue Total Cost of Electric Service
Statement of OperationsYTD 2019
5 Year ComparisonOperating Margins
YTD thru MAY
$2,4
25
$1,1
55
$1,0
72 $2
,245
$1,3
70
$58
$60
$62
$64
$66
$68
$70
$72
$74
$76
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
YTD 15 YTD 16 YTD 17 YTD 18 YTD 19
Mill
ions
Thou
sand
s
Operating Margins Operating Revenue Total Cost of Electric Service
12 Month Rolling AvgControllable Cost Per
Consumer
$306.93 $307.83
$313.97
$308.37
59,410
61,881
58,000
58,500
59,000
59,500
60,000
60,500
61,000
61,500
62,000
62,500
$290
$295
$300
$305
$310
$315
$320
Expense per Consumer AVG 12-month consumers Linear (Expense per Consumer)
2019 YTDFinancial Metrics
Key MetricsMAY2019
Rolling 12 Month Benchmark
T.I.E.R 2.078 3.490 1.25O.T.I.E.R 1.861 - 1.10DSC 2.409 1.35ODSC - 1.857 1.35EQUITY w/o EKPC - 31.91% 20%-35%CURRENT RATIO - 0.862 > 1.0
Days of Liquidity
Days of Liquidity in Unrestricted Funds 36
Days of Liquidity in Credit Facility Availability 101
Days of Liquidity in Cushion of Credit 28
Total Days of Liquidity & Cushion of Credit 165
Member Services and Marketing Overview
Presented By: Scott Lawless
Member Services and Marketing Summary
May 2019 Statistics
Member Services and Marketing Summary
May 2019 Statistics
Member Services and Marketing Summary
May 2019 Statistics
Member Services and Marketing Summary
May 2019 Statistics
Youth Tour Delegates
Frankfort Youth Tour – March 5, 2019
Congratulations to the following, as they havebeen selected on the basis of application,essay and participation to represent OwenElectric Cooperative in Washington D.C. on theWashington Youth Tour in June:
Jessa Luxon, School of the Rock – FlorenceSerenity Rogers, iLEAD Academy – WorthvilleAustin Arnold, Scott High School – IndependenceNoel Baker, Notre Dame Academy - Covington
Congratulations to Owen Electric Washington Youth Tour Delegate, Jessa Luxon, on being selected to represent Kentucky on the NRECA Youth Leadership Council (YLC). One student from each state is selected and will come back to Washington, D.C., in July for a leadership workshop which will focus on the electric cooperative industry.
Each student will prepare a 5-7 minute speech about what inspired them during their Youth Tour trip. The YLC National Spokesperson will be selected to address the membership at the NRECA Annual Meeting and to address the Youth Tour delegates the following year.
Members of the YLC play an important role during NRECA’s Annual Meeting the following spring. Not only are the YLCmembers recognized on stage, they have a hands-on experience with virtually every facet of the meeting including the resolutions process and helping our members communicate with their legislators.
Youth Leadership Council members leave more poised, confident and a better developed leader with a strong determination to improve your community and make their country a better place. Further, they leave having built life-long friendships with other student leaders from across the country.
(School of the Rock, from Florence)
Washington Youth Tour
2019 Member Appreciation Day and Annual Meeting
2019 Member Appreciation Day and Annual Meeting
2018 Registered Members compared to 2019 Registered Members
2019 Member Appreciation Day and Annual Meeting
020406080
100120140160180
Number Registered Per Half Hour
2019 Member Appreciation Day and Annual Meeting
0
200
400
600
800
1000
1200
1400
1600
1800
2000
8:30 9:00 9:30 10:00 10:30 11:00 11:30 12:00 12:30 1:00 1:30 2:00 2:30 3:00 3:30 4:00 4:30 5:00 5:30 6:00
Total Registered Members Timeline
2019 Member Appreciation Day and Annual Meeting
194 Scholarship Entries
Congratulations to winners of (12) $1,000 scholarships from our annual drawing:
Lauren Reinersman (California) Megan Wells (Verona)Maria Seiter (California) Allison Lenox (California)Nathan Harrigan (Burlington) Kirsten Bartlett (Burlington)Nolan Calhoun (Corinth) Ellie Martin (California)Megan Hugenberg (Union) Sophie Blaine (Dry Ridge)Tanner Green (Independence) Madelyn Kim (California)
2019 Member Appreciation Day and Annual Meeting
Member Appreciation Day & Annual Meeting Prize Drawings
Grand Prize - $1,000 Energy Star Appliance Gift Certificate: Anita Boyer42” LED TV: Dwight and Debra Vater$150 Kentucky State Park Gift Card: Gregory & Jacqueline Mattan$150 Kentucky State Park Gift Card: Matthew & Danita SchwallerYeti Roadie 20 Cooler: Phillipp and Kitty HaberzKitchenAid Classic 4.5 Quart Mixer: Jeff and Linda MyersChar-Griller Wrangler Charcoal Grill: Angie GibsonFarberware 3.2 Quart Digital Oil-Less Fryer: Gary BrockApollo 53-Piece Roadside Emergency Kit: Joseph & Amy GregoryGirls 20” Bike: Destiny JacobsBoys 20” Bike: Kaden Lusby
Questions / Discussion
Operations Board Report
June 2019
2019 Right-of-Way
ROW program is now approximately 200 miles behind schedule:•100 miles carryover from 2018•100 miles YTD for 2019
This is due to weather and labor shortage.
YTD Target – 2019 % Complete
Trimming Miles 167.64 927 18%
Spraying Miles 0 790 0%
Capital vs Expense
Outage Expense YTD5 year comparison
Construction
1,377
219368
1,571
166
440
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jobs Worked Total Temporaries Connects
2018
2019
YTD
Construction
163141
0.58
132
259
0.470
50
100
150
200
250
300
Inactive Tear Outs Poles Changed Out Reconductor JobsWorked (Miles)
2018
2019
PSC Line Inspection
YTD Target - 2019 % CompleteNumber of Feeders 31 54 57%Number of Meters 17,503 29,035 60%Miles of Line 1,167 2038.80 57%
Inspection Hours 612.00Cost $56,268.50Inspection Hours/Meter .03Cost/Meter $3.21Cost/Mile of Line $48.21
Out of Town CrewsStorm Restoration
West KY RECCJune 21-25
(4) 2 men crews
(1) 4 men Construction Crew
Technology Report
June 2019
May Outages
178298
654534
0
200
400
600
800
Monthly 2019
Adjusted
2019 YTD
Adjusted
2018 YTD
Adjusted
Monthly 2018
Adjusted
9.21
53.40 53.2044.54
0
20
40
60
80
SAID
IIn
terr
uptio
ns
Interruptions by Outage TypeYTD & Monthly [May]
38
128
310
225
81
32 31
245
46
0
50
100
150
200
250
300
Q1 Q2* Q3 Q4 YTD
SAIDI 33.30 25.76 0.0 0.0 59.08
SAIFI 0.45 0.58 0.0 0.0 0.70MED 0 0 0 0 0
THRESHOLD
TARGET
STRETCH
Reliability KPIs
MonthMonthly
PeakMW
Shaved Times HrsKW Demand
SavingsKwh
Sales Loss
Jun-19** 1748.0 0.00 2 2.1 $0.00 $2,33707
** Current monthly peak as of this report
System Operations
Total MW
ShedPeaks
Caught
Total DVR
Periods
Total DVR
Hours
Total Yearly
Demand Savings
RunningTotal
Demand Savings
38.0 5 of 6 19 51.3 $113,789.98 $1,154,729.04
YTD DVR**
Monthly DVR
Phishing KPI
Phish Prone Limits Risk Level
>15% High Risk2.5 – 15% Medium Risk
< 2.5% Low Risk
Technology
Cyber Security Training KPI
Uncompleted Limits Risk Level
>20% High Risk
5 – 20% Medium Risk< 5% Low Risk
Technology
Technology
Questions??
Engineering ReportPresented By: Jennifer Taylor
June 2019
Engineering UpdateDG Unit
Runtime Efficiency
March 88.8% 39.5%April 85.0% 40.0%May 83.3% 37.9%Since start up 83.9% 39.4%
DG Stats
Runtime hit due to CAT installing new heads and gaskets (free) and a replacement of a spark plug (CAT provided plug).
Efficiency hit due to reduced runtime and a crack in the air intake (repaired early June).
Without Depreciation May-2019 YTD 2019 LTD
Purchased Power Savings $ 66,468 $ 373,098 $ 2,499,119
Power Production Costs $ 45,410 $ 276,084 $ 1,859,048
Net Savings $ 21,058 $ 97,014 $ 640,071
May-2019 YTD 2019 LTD
EKPC Power Cost/kWh $ 0.069303 $ 0.066606 $ 0.067829
DG Total Power Cost/kWh $ 0.043073 $ 0.044067 $ 0.045731
Net Savings $ 0.026023 $ 0.022538 $ 0.022098
Power Cost for 1 MWh(May)EKPC = $69.30DG Unit = $43.07Savings = $26.02
Engineering UpdateDG Unit
Power Cost for 1 MWh (LTD)EKPC = $67.83DG Unit = $45.73Savings = $22.10
Action Items
Action Items
Review/Discuss/Approve
– Motion ________________________– Second________________________
Approve Committee Rotations Election of Officers for 2019-2020 Term
Review/Discuss/ApprovePURPA Cogen
– Motion ________________________– Second________________________
Action Items
PURPA/Cogen TariffPresented By: Mark Stallons
• Existing Facts– Amendment 3 ruling and existing Cogeneration
(Cogen) tariff specifies that EKPC negotiates with third party Cogen production facility
– Maximum Cogen project is 80MW at avoided cost– At avoided cost no Cogen projects are probable
• Positives to joining EKPC FERC Filing– Mitigates 80MW Cogeneration project to 20MW
PURPA/Cogen TariffPresented By: Mark Stallons
• Negatives to joining EKPC FERC filing– As long as EKPC is well managed and rates are
competitive there is no downside in the short term or long term
– Should our relationship with EKPC change we would need to
• Refile our Cogen tariff with the Kentucky PSC • Unwind the FERC agreement with EKPC
Action Items
Review/Discuss/Approve
Policies 308 & 316
-Motion ________________________-Second________________________
Action Items
Review/Discuss/Approve
RUS Loan/CFC Investment
-Motion ________________________-Second________________________
AV8 Loan – RUS/FFB approved funds from the 2014-2017 Construction Work Plan
• Final draw down for any more advances on the approved AV8 loan was on June 26th
• The next approval for advances from a construction work plan is potentially 12 – 18 months
• Due to time frame, it was decided to draw down $10 million with RUS @ 2.21% (2.34% with adder) and invest the funds with CFC Commercial paper at 2.41% until needed.
Oversight Agenda
EKPC Report
Report Presented by: Alan Ahrman
KEC Report
Report Presented by: Bob True
Attorney’s Report
Presented By: Jim Crawford
President’s ReportJune 2019Presented By: Mark Stallons
President’s Report OverviewPresented By: Mark Stallons
• Broadband Feasibility Study– We are looking at two options:
• Retail service to underserved Owen Electric territory• Partnership with White Cloud Communication where
Owen Electric provides mid-mile service.
– The May & June BROC meetings have been rescheduled.
– White Cloud Communications will be at our June board meeting.
President’s Report OverviewPresented By: Mark Stallons
• Enterprise Risk Management(ERM) – EKPC has included our Regulatory/Legislative risk profile into
their risk assessment process.– We have arranged a meeting with EKPC to discuss Nucor’s
credit risk profile.– Other risk profiles will be presented as follows:
• July 25th- Cyber security risk• Aug 29th – Safety risk & NG risk• Sep 26th - Interest Rate Risk• Oct 31st – Culture Risk profile• Dec 12th - DER risk (Home automation, solar & micro grids)
President’s Report OverviewPresented By: Mark Stallons
• Ark Encounter– No new information available.
President’s Report OverviewPresented By: Mark Stallons
• Cumberland Electric Membership Corp., Clarksville, Tennessee, 90,000 Members.Nashville NBC’s News4 reported that:1. Members “left in the dark” when told they couldn’t
attend Board meetings (May 28, 2019);2. Co-op employees received DUI’s, in “co-op vehicles” (May
29, 2019);and
3. Electric Co-op’s board pay among highest in state (June 10, 2019).
President’s Report OverviewPresented By: Mark Stallons
• Miscellaneous
InformationAgenda
2019 Board Meetings & Training
July 1-3, 2019 – CFC Forum; New York, NY July 16-18, 2019-CoBank Energy Directors Conference; Asheville, North Carolina July 25, 2019 – Regular Board MeetingAugust 29, 2019 – Regular Board MeetingSeptember 26, 2019 – Regular Board MeetingOctober 9-10, 2019 – NRECA Regional Meeting (Regions 2 & 3); Louisville, KYOctober 31, 2019 – Regular Board MeetingNovember 18-19, 2019 – KAEC Annual Meeting; Louisville, KYNovember 21, 2019 – Regular Board Meeting (changed due to Thanksgiving)December 12, 2019 – Regular Board Meeting and Christmas Luncheon
Information Agenda
• Conference Reports– As needed
• Old Business• New Business• Executive Session• Miscellaneous• Adjourn
– Motion ________________________– Second________________________