CEC holds annual membership meeting

Cordovans Jeff Hamberger and Bret Hodges cast their votes for two new board members and bylaw changes, during Cordova Electric Cooperative’s annual meeting March 27. Photo by Cinthia Gibbens-Stimson/The Cordova Times

Cordova Electric Cooperative members voted on two new board members and bylaw revisions, and got an update on the co-op’s 2016 performance during CEC’s 39th annual meeting March 27.

Election results are unofficial, noted Barbara Bailer, the coop’s executive assistant and human resources coordinator. The election/tally committee will certify the results as soon as possible, she said.

Cordova Electric Cooperative’s Chairman of the Board, Scott Pegau, addressed the membership regarding highlights of the past year, during the annual membership meeting. From left are Pegau, CEO Clay Koplin, board member Alexis Cooper, and vice-chairwoman Patience Faulkner.
Photo by Cinthia Gibbens-Stimson/The Cordova Times

Incumbent candidate Patience Faulkner ran against Joe Cook, and Edgar Tabilas, with Cook receiving 214 votes, Faulkner receiving 149 votes, and Tabilas received 142 votes.

Once the election results are official, Faulkner and Cook will each serve three-year terms. Board member Dave Zastrow, whose tenure on the board was up, did not seek re-election.

According to the annual member report, CEC’s 2016 operating revenue was $6,338,065. Expenses listed included power production, $1,633,305; fuel costs, $888,808; distribution of operations and maintenance, $695,938; consumer accounts and information, $319,123; and administrative and general costs, $1,177,447, for a total of $4,714,621 in operating and maintenance expenses.

Depreciation and amortization was listed at $1,006,569; taxes, $44,057; interest, $374,726, which brought the total cost of electric service in 2016 to $6,139,973. Operating margins of $198,092, plus interest income of $15,046, other capital credits and patronage dividends of $288,528, and other non-operating margins of $3,810, result in $505,476 in patronage capital and margins. CEC’s total assets for 2016 are $32,024,850, and total liabilities are $15,476,493, according to the report.

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Cordova Mayor Clay Koplin, who serves as the chief executive officer of the co-op, said that despite strong headwinds on several fronts, the CEC performed well.

“A sharp drop in kilowatt-hour sales had revenues down by almost 10-percent, but we were able to operate the cooperative without raising rates or borrowing money,” he said.

“CEC paid down $810,526 in long-term debt for a new total of $14,792,228. This has increased the members’ ownership share of CEC to over 50-percent equity, which means the members now own more of the cooperative assets than the bank,” he said. “We generated an unaudited positive cash flow of $92,677, for a cash balance of $1,709,744. We have worked hard to build a cash reserve large enough to pay fuel bills and operating emergencies throughout the winter without having to resort to borrowing.”

CEC had the highest percentage of hydro-production since 2005, at 77.20-percent, “Once again breaking several all-time monthly hydro records,” the CEO said. “Lower fuel prices and strong hydro production resulted in lower electric bills last year.”

Koplin spoke about the possibility of CEC tapping Crater Lake as a new hydropower resource, and the geotechnical assessment, research, and funding that the potential project will require to start.

CEC board chairman Scott Pegau said while 2016 was a good year for CEC, it was a poor year for the fishing industry, resulting in reduced sales of electricity.

“The good news is, is that we were able to meet generation needs using hydro (power), even in the winter, because it was rain instead of snow. In the end, we were able to complete a major overhaul of a diesel and repairs on a Humpback Creek turbine without needing to borrow any money. This meant that we continued to reduce debt,” Pegau said.

CEC’s debt has now been reduced to a level that triggers a board discussion on capital credits, and if and when, to pay down member equity in them, he said.

“The board continues to focus on board orientation, training, and development to continuously improve the governance of the cooperative. In addition to reviewing the bylaws and policies, we added a code of conduct policy, and updated the conflict of interest policy. We review our equity management plan, look at CEC succession planning, and review and update the strategic plan. These are done to ensure that the board provides the proper oversight of CEC, and looks forward to new opportunities and challenges,” he said.

“CEC received a clean audit from our auditing firm, Moss Adams, thanks to the hard efforts of Val (Covel) and Emma (Merritt),” he said.

Perhaps one of the board’s most important accomplishments was signing a new contract with Koplin, and attracting and maintaining a capable workforce, he said.

In fact, CEC holds a record 1,545 days without lost time work accidents by employees.

CEC employees Nate Cain, Jeff Field, and Heath Kocan were presented with five-year service pins. Board member David Little also received his five-year pin, in service to the cooperative.

The cooperative, in conjunction with CoBank, presented Cordova Arts and Pageants with a $10,000 donation through CoBank’s Sharing Success charitable contribution program. The funds paid for stage lighting and controls at the North Start Theater, in the Cordova Center.

“This program is offered thru CoBank to any 501C3 non-profit organization in Cordova. CoBank will match CEC’s donation up to $5,000. We encourage eligible organizations to apply for this year’s grant; advertising will begin soon,” Pegau said.

Pegau noted that CEC had not received any applicants for its scholarship programs, and so the application deadline is extended to April 14.

“As we look outside this annual meeting, we see a more normal winter for Cordova,” he said. “This means that Power Creek and Humpback Creek are mostly frozen, and our hydropower production is lower than it has been the last couple of winters. That means we are more reliant on diesel power. The strategic plan, which the board reviews and updates each year, is very focused on reducing diesel fuel use — a major portion of the cost of electrical.”

Coop members are encouraged to provide feedback on projects, future projects that should be considered, and ways to better serve the membership.

A suggestion box is available at the cooperative.

Cordova Electric Cooperative Unofficial Election Results:

CEC bylaw changes

Article VI, Section 4

REASON FOR THE CHANGE: To allow the board to make amendments to the policy manual at one meeting, rather than three.

Yes = 191 votes; No = 74 votes.

Article IV, Section 7

RESOLVE that board members may receive the fixed amount of $75 for each day, or portion thereof, spent on authorized cooperative business.

REASON FOR THE CHANGE:  To allow directors the option of receiving a stipend for time spent on authorized cooperative business.

Yes = 131 votes; No = 133 votes.

CEC Board of Directors Election:

Joe Cook received 214 votes

Patience Faulkner received 149 votes

Edgar Tabilas received 142 votes

CEC Election/Tally Committee: Diana Rubio, Ruth Steele, Lisa Laird, and Marleen Moffitt.

Cordova Electric Cooperative’s members enjoy a meal of chicken cordon bleu, salad, rice, vegetables, and dessert, at the annual meeting March 27, held at Mt. Eccles Elementary School.
Photo by Cinthia Gibbens-Stimson/The Cordova Times
CEC board member David Little receives his five-year service pin from Scott Pegau at CEC’s annual membership meeting, as board member Dave Zastrow and board secretary/treasurer Cully Wooden look on.
Photo by Cinthia Gibbens-Stimson/The Cordova Times
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Cinthia Gibbens-Stimson
Cinthia Gibbens-Stimson is a staff writer and photographer for The Cordova Times. She has been writing in one form or another for 30-plus years and has had a longstanding relationship with The Cordova Times starting in 1989. She's been an Alaskan since 1976 and first moved to Cordova in 1978. She's lived in various West Texas towns; in Denver, Colorado; in McGrath, Cordova, Galena, Kodiak, Wasilla, Anchorage and Fairbanks, Alaska and in Bangalore, India. She has two children and three grandchildren. She can be reached at [email protected] or follow her on Instagram @alaskatoindia.