MINUTES SOUTHSIDE ELECTRIC COOPERATIVE MEETING OF THE BOARD OF DIRECTORS SEPTEMBER 20, 1:30 P.M. HEADQUARTERS BOARD ROOM

Transcription

1 MINUTES SOUTHSIDE ELECTRIC COOPERATIVE MEETING OF THE BOARD OF DIRECTORS SEPTEMBER 20, 1:30 P.M. HEADQUARTERS BOARD ROOM PRESENT: STAFF: GUESTS: Frank W. Bacon (Chair) Earl C. Currin, Jr. (Vice Chair) Paul S. Bennett (Secretary) Brenda H. Johnson Kristie Martin-Wallace Clive C. Pettis, Sr. William T. White Frank F. Rennie (General Counsel) Christine Marston (Minute Taker) Jeffrey S. Edwards, President/CEO Danny J. Hammond, CFO Bradley V. Furr, VP of Operations George A. Felts, VP of Engineering Jean H. Morris, VP of Human Resources Ronald O. White, VP of Member & Public Relations Jason Loehr, Controller Jacob McCann, Director of Community Relations Dr. Frank Bacon presided. Ron White gave the invocation. PREVIOUS MINUTES On motion made and seconded: The Minutes of the August 16, 2018 Board Meeting are approved. ODEC REPORT The ODEC report was given by Earl Currin. PRESIDENT/CEO S REPORT MOTION CARRIED 1. The SEC Financial and Statistical report for August 2018 was reviewed and is attached to and made a part of the Minutes. 2. The Board was provided information regarding cybersecurity events during the month of August The Institute of Electrical & Electronics Engineers (IEEE) outage data and safety report for August 2018 were reviewed in detail: 1

2 IEEE Outage Data a. System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI) were above historical values for the month. b. Customer Average Interruption Duration Index (CAIDI) was below historical values for the month. c. Reliability performance in August was driven by multiple days of thunderstorm activity. d. There were no power supply outages during the month. e. There were no major event days in August. Safety Report a. There were no lost-time injuries in August. b. As of August 31 st, employees have worked 123 days without a lost time injury. 4. Operations Update: a. New overhead (OH) construction work orders activity was down 16.9% for the month. b. New underground (UG) construction work orders activity spiked in Northern District last month. c. Service order activity was in line with historical numbers for the month, except Western District which is lower than historical. d. Outage activity (minutes) with major event days removed: Central 176 Eastern 58 Northern 51 Western 139 e. August outage causes were affected primarily by isolated thunderstorms producing damaging winds and lightning: Trees 37% Weather 35% Animals 8% Fault/Failure 7% Maintenance/Planned 6% Public 3% Decay/Age 2% Unknown 2% Power Supply <1% Other <1% 2

3 f. Monthly switching savings: SAIDI with no switching 26.6 minutes (67%) SAIDI saved by manual switching 3.6 minutes (9%) SAIDI saved by automation (SCADA) switching 9.3 minutes (24%) g. Monthly Fleet Expense $88,012, up 22%: Includes labor and parts for employees and third parties The cost in October will continue to trend upward Excludes vehicle sales, fuel, depreciation and insurance h. Annual Fleet Expense $562,566 i. Fleet cost per mile by fleet asset type: Line Trucks = $2.76/mile Underground = $2.19/mile Large Buckets = $1.60/mile Service Trucks = $0.66/mile Small Buckets = $0.57/mile Pickups/SUVs = $0.16/mile 5. Annual Meeting Preparation and Update: a. Received 2,163 proxies (4.68%) b. Crewe Volunteer Fire Department will be cooking the chicken c. Catering by Brocks BBQ d. Crewe Burkeville Youth Recreation Association will be serving the drinks e Youth Tour participants will be present and speak briefly at during the Business meeting f. Singing of the National Anthem and Presentation of Colors g. Sign language interpreter for business meeting and raffle drawings h. SEC Drone program exhibit i. Serving of the meals will begin once the business meeting is complete j. Marcus Harris of ODEC will be in attendance and giving a short speech on his plans for ODEC. 6. Upcoming Events: a. Day in the Life of a Lineman program gearing up in the various districts and at Southside Virginia Community College (SVCC) for those students outside of the Cooperative s service territory to attend. b. Southside Opportunity Fund (SOF) Skeet & Trap Classic October 6 th. c. Employee Christmas banquet December 7 th. 3

4 7. A person called to express their dissatisfaction with the line extension policy. They claim a promise was made years ago that the Cooperative would reconnect them at no cost. This person made verbal threats towards the Cooperative, its facilities and employees. The police have been notified, and a no trespassing notification has been sent. 8. Information regarding directors and their responsibilities, as well as a Profile Outline, was handed out for review and discussion during next month s meeting. Once finalized, this information will be posted on SEC s website. ACTION: Chris Marston to send documents electronically to the Board. 9. Jacob McCann was recognized for completing his MBA (Master of Business Administration), the National Rural Electric Cooperative Association s (NRECA) Management Internship Program (MIP) and the NRECA Certified Key Accounts Executive certificate program (CKAE). 10. Rural Utilities Service (RUS) loan documentation and associated resolution have been received and need to be signed by officers of the Board and the President/CEO. On motion made and seconded: The Resolution associated with the RUS loan is approved. MOTION CARRIED 11. A Strategic Planning Session is scheduled for May 15 & 16, 2019 at the Headquarters office of the Cooperative. Telephone interviews will be conducted, along with an online survey, prior to the meeting. 12. Director candidate resumes will be provided in BoardPaq for directors to review in order to fill the vacancy in District I due to Michael Lobue s illness. 13. Nine SEC linemen went to Central North Carolina to assist in power restoration after Hurricane Florence. 14. Broadband discussions were held. The Cooperative continues to monitor. 15. Text Power program: a. A program providing the membership availability to text outages from mobile devices. b. All members who have provided cellular numbers have been opted in to the program. They can opt out at any time. c. Outage reporting number is (866) d. Members can text an outage by texting #out and receive updates by texting #status. e. Texting is not monitored for comments or questions, it is automated. f. It takes the information from the member s phone and provides it to Text Power which will, in turn, provide the information to the Cooperative s outage management system. 4

5 g. The program will be advertised via social media, bill stuffers and the Cooperative Living magazine. h. If a member would like to begin using the service, all they need do is provide the Cooperative a mobile number. 16. Jennings Territorial Issue: NEW BUSINESS a. A line extension concern that has turned into a territorial issue. b. A person contacted Central Virginia Electric Cooperative (CVEC) and requested service to a location in SEC s territory. An estimate for construction was provided to them by CVEC. c. CVEC then told the individual they could not provide service unless SEC agreed to forfeit that assigned territory. d. The person has asked SEC to exchange territory with CVEC. The Cooperative has denied this request. Contact by the individual has been made with the State Corporation Commission (SCC) due to the Cooperative s refusal. e. The individual references other territorial exchanges with CVEC. These exchanges occurred due to the inability to obtain easements with nonmembers. f. The Cooperative is currently answering questions from the SCC. 1. The Affirmative Action Program (AAP): a. As a federal contractor, SEC is subject to the nondiscrimination and affirmative action obligations of Executive Order 11246, as amended; Section 503 of the Rehabilitation Act of 1973, as amended; and the Vietnam Era Veterans Readjustment Assistance Act of 1974, as amended. b. The program is designed to assist the Cooperative in fulfilling the equal employment opportunity and affirmative action requirements. c. Separate written affirmative action programs for minorities and women, individuals with disabilities, and protected veterans. d. Program data has been submitted to employment legal counsel. e. The AAP documents are in order and need Board approval. On motion made and seconded: The Affirmative Action Program documents are approved as presented. 2. NRECA Group Benefits Renewal: MOTION CARRIED a. Continued/renewed other Group Benefits through NRECA (dental, basic life, long-term disability, Directors AD&D & business travel accident). Dental increase of 0.3% 5

6 Basic Life will increase 1.1% due to aging workforce. No change in long-term disability, directors accidental death & dismemberment or business travel insurance Estimated total annual cost $434,000 b. NRECA Retirement Security Plan renewal: Plan A (legacy plan) increase of 2.8% Plan B (new hires) increase of 6.8% Overall annual increase 2019 Projected at $280,000 c. Overall NRECA RS Plan costs increased by 1.0% d. SEC RS Plan A & B increased additional amount due to increase in Average Age of plan participant. e. Total projected RS Plan annual cost for 2019 $3.5 million f. Recommendation to continue other group benefits, including dental, basic life, long-term disability, directors AD&D, business travel accident insurances and the retirement security plan. On motion made and seconded: NRECA group benefits will be renewed as presented. 3. American Consumer Satisfaction Index (ACSI) Survey Results: MOTION CARRIED a. This index measures the satisfaction of U. S. household consumers with the quality of products and services offered by both foreign and domestic firms with significant share in U. S. markets. b. SEC s 2 nd quarter score remained at 82 and reflects data collected in January, February & March. c. Areas of Opportunity: Outages New Service Temporary Construction Service General Population d. The national TSE cooperative average score was 74. e. National non-tse cooperative average score was 79. f. Investor-owned utilities average score was 73. g. Municipal utilities average score was Virginia, Maryland, Delaware Association of Electric Cooperatives (VMDAEC) has requested nominations for the Unsung Virginian Award, Distinguished Friend of Electric Cooperatives Award and The Good Samaritan Award. ACTION: Contact Chris Marston for any nomination suggestions. 6

7

8 STATEMENT OF GENERAL FUNDS AND OTHER ASSETS August 31, 2018 General Fund Cash in Banks 9,155, General Funds Invested CFC - CTC's 2,134, CFC - Patronage Capital 2,764, Federated Insurance Corporation 443, TEC Trading Incorporated 622, Town of Hurt 1, Notes and Accounts Receivable Electric Consumer 8,662, Other Accounts Receivable 3,068, ,851, Material and Supplies in Stock 2,038, Construction Work in Progress to be Paid from Construction Funds 0.00 TOTAL 28,890, Construction Funds Available First Citizens Bank 0.00 NOTES STATISTICS CFC RUS & FFB COBANK CFC, COBANK & FIRST CITIZENS BANK Balance Available for Advance 23,500, Gross Obligations 59,584, ,040, ,033, ,500, Interest Paid This Year 1,418, ,488, , , Page 1 of 6

9 Southside Electric Cooperative For the Month Ending August 2018 Comparative Operating Statistics Y-T-D 2017 Y-T-D 2018 August 2018 New Services Connected Meters Removed Meters Reinstalled Services Idle, Excluding Seasonal Number of Services Retired Total Consumers Receiving Service Total Miles Energized ,584 1, ,446 1, ,655 3,603 3, ,167 56,528 56,528 8,256 8,280 8,280 Meters Installed - New Services January February March April May June July August September October November December Total Page 2 of 6

10 SOUTHSIDE ELECTRIC COOPERATIVE Revision: /12/ :23:26 am General Ledger Financial And Operating Report Electric Distribution Page: 1 INCOME STATEMENT FOR AUG Year - To - Date Period - To - Date Item Last Year This Year Budget Current Budget 1. Operating Revenue and Patronage Capital 72,062, ,671, ,565, ,576, ,005, Power Production Expense 3. Cost of Purchased Power 40,496, ,945, ,279, ,166, ,913, Transmission Expense , , Regional Market Expense 6. Distribution Expense - Operation 2,803, ,463, ,010, , , Distribution Expense - Maintenance 7,093, ,953, ,986, , , Customer Accounts Expense 1,440, ,475, ,450, , , Customer Service and Informational Expense 1,793, ,783, ,932, , , Sales Expense 305, , , , , Administrative and General Expense 3,679, ,762, ,077, , , Total Operation & Maintenance Expense (2 thru 11) 57,614, ,790, ,155, ,398, ,127, Depreciation & Amortization Expense 14. Tax Expense - Property & Gross Receipts 15. Tax Expense - Other 16. Interest on Long-Term Debt 17. Interest Charged to Construction - Credit 18. Interest Expense - Other 19. Other Deductions 20. Total Cost of Electric Service (12 thru 19) 21. Patronage Capital & Operating Margins (1 minus 20) 22. Non Operating Margins - Interest 23. Allowance for Funds Used During Construction 24. Income (Loss) from Equity Investments 25. Non Operating Margins - Other 26. Generation and Transmission Capital Credits 27. Other Capital Credits and Patronage Dividends 28. Extraordinary Items 29. Patronage Capital or Margins (21 thru 28) 6,804, ,856, ,947, , , ,102, ,172, ,172, , , ,000, ,409, ,208, , , , , , , , , , , , ,617, ,300, ,540, ,046, ,800, ,445, ,370, ,024, , , , , , , , , , , , , , , , , , , , , ,478, ,594, ,899, , , Operating - Margin Non Operating - Margin Times Interest Earned Ratio - Operating Times Interest Earned Ratio - Net Times Interest Earned Ratio - Modified 3,478, ,594, ,899, , , Page 3 of /pro/rpttemplate/acct/2.42.1/gl/gl_standard_financial.xml.rpt Lynn

11 SOUTHSIDE ELECTRIC COOPERATIVE Revision: /12/ :23:28 am General Ledger Financial And Operating Report Electric Distribution Page: 1 BALANCE SHEET FOR AUG 2018 Last Year This Year Variance ASSETS AND OTHER DEBITS 1. Total Utility Plant in Service 343,383, ,455, ,072, Construction Work in Progress 21,243, ,472, ,770, Total Utility Plant (1 + 2) 364,626, ,928, ,301, Accum. Provision for Depreciation and Amort. 105,972, ,533, ,561, Net Utility Plant (3-4) 258,654, ,394, ,259, Non-Utility Property (Net) 25, , , Invest. in Subsidiary Companies Invest. in Assoc. Org. - Patronage Capital 47,102, ,160, ,058, Invest. in Assoc. Org. - Other - General Funds 2,549, ,578, , Invest. in Assoc. Org. - Other - Nongeneral Funds Invest. in Economic Development Projects Other Investments 687, , , Special Funds Total Other Property & Investments (6 thru 13) 50,363, ,460, ,096, Cash - General Funds 4,798, ,155, ,356, Cash - Construction Funds - Trustee Special Deposits Temporary Investments Notes Receivable (Net) , , Accounts Receivable - Sales of Energy (Net) 7,634, ,662, ,027, Accounts Receivable - Other (Net) 3,218, ,068, , Renewable Energy Credits Material and Supplies - Electric & Other 2,126, ,038, , Prepayments 1,214, ,236, , Other Current and Accrued Assets 6,428, ,993, , Total Current and Accrued Assets (15 thru 25) 25,421, ,189, ,768, Regulatory Assets 14, , Other Deferred Debits 4,650, ,810, , Total Assets and Other Debits ( thru 28) 339,105, ,855, ,750, Page 4 of /pro/rpttemplate/acct/2.42.1/gl/gl_standard_financial_bal_sheet.xml.rpt Lynn

12 SOUTHSIDE ELECTRIC COOPERATIVE Revision: /12/ :23:28 am General Ledger Financial And Operating Report Electric Distribution Page: 2 BALANCE SHEET FOR AUG 2018 Last Year This Year Variance LIABILITIES AND OTHER CREDITS 30. Memberships 231, , , Patronage Capital 99,661, ,997, ,336, Operating Margins - Prior Years Operating Margins - Current Year 3,478, ,594, ,115, Non-Operating Margins Other Margins and Equities 1,017, ,217, , Total Margins & Equities (30 thru 35) 104,388, ,042, ,653, Long-Term Debt - RUS (Net) Long-Term Debt - FFB - RUS Guaranteed 124,472, ,258, ,785, Long-Term Debt - Other - RUS Guaranteed Long-Term Debt - Other (Net) 63,333, ,149, ,816, Long-Term Debt - RUS Econ. Devel. (Net) Payments - Unapplied Total Long-Term Debt (37 thru 41-42) 187,805, ,408, ,602, Obligations Under Capital Leases - Noncurrent Accumulated Operating Provisions 115, , , Total Other Noncurrent Liabilities ( ) 115, , , Notes Payable 21,500, ,500, ,000, Accounts Payable 6,501, ,183, , Consumers Deposits 2,249, ,209, , Current Maturities Long-Term Debt 7,813, ,251, , Current Maturities Long-Term Debt - Econ. Devel Current Maturities Capital Leases Other Current and Accrued Liabilities 3,496, ,655, , Total Current & Accrued Liabilities (47 thru 53) 41,560, ,800, ,760, Regulatory Liabilities Other Deferred Credits 5,234, ,565, ,669, Total Liab. & Other Credits ( thru 56) 339,105, ,855, ,750, Current Assets To Current Liabilities 0.61 to to 1 Margins and Equities To Total Assets % % Long-Term Debt To Total Utility Plant % % Page 5 of /pro/rpttemplate/acct/2.42.1/gl/gl_standard_financial_bal_sheet.xml.rpt Lynn

13 Statements of Cash Flows Southside Electric Cooperative Cash flows from operating activities Period ended Period ended August 31, 2018 August 31, 2017 Electric revenue received $ 83,291,924 $ 74,446,583 Power supply paid (47,640,797) (41,251,738) Operating expenses paid (18,022,505) (18,157,884) Interest received 86,592 73,202 Interest paid (3,528,947) (3,156,025) Cash flows provided by operating activities 14,186,267 11,954,138 Cash flows from investing activities Investment in electric plant,net (6,383,222) (10,774,433) Installment loans issued (798,152) (1,047,107) Proceeds from retirement of CTC's 18,383 17,207 Cash flows used in investing activities (7,162,991) (11,804,333) Cash flows from financing activities Proceeds from lines of credit 6,500,000 Payments on lines of credit (12,000,000) Proceeds from long term debt 12,900,000 Principal payments on long term debt (4,696,484) (4,559,693) Capital credits paid to members, net (406,397) (301,460) Proceeds from capital credits 1,956, ,848 Deposits collected from customers 17,117 (63,796) Net change in memberships Cash flows (used) provided by financing activities (2,228,575) 2,431,829 Net change in cash 4,794,701 2,581,634 Cash at December 31, 2017 and ,360,481 2,216,595 Cash at August 31, 2018 and 2017 $ 9,155,182 $ 4,798,229

14 CLASS OF SERVICE No. Receiving Service a. No. Minimum Bills d. Avg. No. Receiving Service e. kwh Sold Cumulative f. Amount Cumulative g. 1. Residential Sales (excl seas.) 54,169 67,200,893 8,887, , ,627,563 69,217, Residential Sales Seasonal 3. Irrigation Sales 4. Comm. & Ind 1000 KVA or Less 1,948 5,689, , ,943 39,676,247 4,500, Comm. & Ind Over 1000 KVA 19 5,383, , ,924,023 3,632, Public St. & Highway Lighting 7. Other Sales to Public Authority 392 4,470, , ,845,968 3,545, Sales for Resale - REA Borr. 9. Sales for Resale - Other PART D. CONSUMER SALES AND REVENUE DATA August 2018 kwh Sold b. THIS MONTH Amount c. YEAR-TO-DATE 10. (1 thru 9) 56,528 82,744,018 10,446, , ,073,801 80,896, Other Electric Revenue xxxxxxxxxxxx xxxxxxxxxxxx 130,114 xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 774, Total ( ) xxxxxxxxxxxx xxxxxxxxxxxx 10,576,329 xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 81,671,317 PART D. CONSUMER SALES AND REVENUE DATA ITEM THIS MONTH YEAR-TO-DATE THIS MONTH YEAR-TO-DATE a. ITEM b. a. b. 1. Net kwh Generated Office Use ,627 1,902, kwh Purchased ,162, ,727, Total unaccounted For 3. Interchange kwh - Net Total kwh (1 thru 3) ,162, ,727,656 (4 less 5 & 6), Percent System Loss (7/4)x ,233, ,751, Maximum Demand (kw) , , Total kwh - Sold ,744, ,073, Month When Maximum Demand Occurred... January 2018 Page 6 of 6