President’s Reports

President's Report

Dam Politics

The lower Snake River dams—a critical component of the Federal Columbia River Power System—produce firm, reliable, carbon-free, affordable energy and play an essential role in keeping the lights on for millions of consumers, especially during extreme winter and summer events. Yet, the light produced by this valuable resource is at risk and faces going dark—permanently.

Dam politics are playing a big role in getting the dams removed.

The Bonneville Power Administration, which manages the FCRPS, released its 2020 Columbia River Systems Operation’s final Environmental Impact Study, which stated breaching the dams would:

  • Create an additional 3.3 million metric tons of carbon dioxide, a staggering 10%
    increase in power-related carbon emissions across the Northwest.
  • More than double the region’s risk of power shortages.
  • Substantially increase wholesale electricity rates by approximately 25%.

Fast forward to this summer. Washington Gov. Jay Inslee and Washington Sen. Patty Murray, dissatisfied with some of the federal agencies’ best fisheries specialists’ conclusions, released their commissioned study to get the desirable answer. There is a path forward without the dams, with yet-to-be-determined resources at a potential cost up to $27.2 billion paid for by ratepayers or taxpayers.

However, the governor and senator’s report fails to consider the significant adverse ramifications should this happen: loss of clean, reliable and affordable power. Negative impacts on the climate. Heightened risk of blackouts. Adverse effects on regional economies. Imposition of unnecessary financial costs on vulnerable populations.

The report also ignores how the lower Snake River dams’ fish-passage technology—financed by the region’s ratepayers at almost $2 billion—achieved a juvenile dam passage survival objective of 96% for Chinook salmon and steelhead, per the federal National Oceanic and Atmospheric Administration’s 2017 study. The dams and fish can co-exist.

The White House Council on Environmental Quality, which rarely weighs in on BPA or Department of Energy issues, injected itself into the fray, releasing its review draft study endorsing the removal of the lower Snake River dams.

The CEQ interfered further and successfully delayed BPA from releasing its power replacement study should the dams be breached. BPA’s Energy, Environmental & Economics (E3) study finally came out on the same day CEQ released its review draft, but received scant coverage, unlike CEQ, which dominated the headlines.

The E3 study affirmed the value the dams bring to the Pacific Northwest. Replacing the lost power would come at a cost in the billions of dollars. That equates to anywhere from $100 to $230 per household annually. Senior citizens and those on fixed incomes should not have to choose between medicine and food or paying their electric bills.

Say no to breaching the dams and yes to keeping the lights on. Get involved! Sign up for Voices of Cooperative Power at https://voicesforcooperativepower.com/oregon, a platform to speak up about energy policies affecting your way of life.

President's Report

Did You Know?

Central Electric Cooperative’s price for residential electricity is among the lowest in the state and country.

CEC’s average residential rate is 7.5 cents per kilowatt-hour, far below the U.S. average of 13.2 cents per kWh.

 

President's Report

Remain Vigilant: Wildfire Season is Back

One may have a false sense of security after the past two months of rain, snow and cool temperatures left the upper elevations of the eastern Cascades in deep snow, with patches below 4,500 feet. While these conditions may put one at ease during wildfire season, the threat of wildfires can emerge quickly.

Central Oregon has the highest fire risk in the state. The region remains under an extreme drought classification. Any vegetation produced by wet weather serves as additional fuel in the early fall. High winds, lightning or human error can quickly turn a dry tinderbox into a raging wildfire.

Central Electric Cooperative and its employees are on high alert, engaged on various fronts: ongoing implementation of the co-op’s wildfire mitigation plan, promoting efficiency in streamlining the federal permitting process to clear vegetation and hazard trees from our power line rights-of-way, and member education.

This year’s priority vegetation management project is a 2-mile stretch of power line in Camp Sherman. This line delivers electricity to permitted tract homes, private property, water systems and the Oregon Department of Fish and Wildlife’s Wizard Falls Fish Hatchery.

Like previous maintenance projects in federal land rights-of-way, we faced a familiar obstacle: an extensive delay for the USFS to approve the permit. Last October, we submitted the request to ensure its completion before wildfire season commenced. It took seven months to get the green light. Crews finished the three-week job in May.

Since 2014, I have testified before Congress multiple times to promote solutions to improve a cumbersome and timely application process for routine power line maintenance.

While Congress passed meaningful legislative reforms in 2018, only now have the reforms trickled down to the local level for implementation consideration.

Congressman Kurt Schrader (D-OR), a strong ally on this issue, recently visited Bend, where I had the opportunity to highlight that much still needs to be done. I greatly appreciate his listening and commitment to help ensure meaningful reforms take root locally.

There is good news: Federal funding is coming to Central Oregon to aid wildfire mitigation efforts. The USFS recently announced that $41.3 million over three years will pay for thinning and restoration projects to reduce forest fuels in areas near growing communities in Deschutes County. The money comes out of the $1.2 trillion Infrastructure and Jobs Act Congress passed earlier this year.

CEC plays a pivotal role in participating in the Oregon Public Utility Commission’s technical working group to provide input and develop solutions to reduce obstacles to allowing utilities to perform ongoing maintenance on federal lands and, thus, reducing wildfire risk.

As we experience another wildfire season, please know CEC is actively doing all it can to protect you and your community. To learn more about our efforts, and what you can do, see this month’s Ruralite or visit www.cec.coop/safety-education/wildfire-preparedness.

 

President's Report

Beware of the Scam–Call Central Electric

The recent trial of Theranos’ founder and former CEO Elizabeth Holmes in a U.S. court for fraud captured my attention. The
level of deception, hundreds of millions of dollars bilked and the number of people scammed is stunning.

You can learn many lessons from the trial, but one, in particular, stuck with me: Always call to verify.

Holmes claimed to have revolutionized blood testing, developing a technology designed to take one droplet of blood and, from it, screen patients for hundreds of diseases. A key selling point was the technology’s accessibility and convenience to the public at a low cost with rapid results.

The technology never worked, and eventually, time exposed the sham. The federal government prosecuted Holmes, and a jury found her guilty on four counts, including defrauding almost $1 billion from investors. Investors falling for the fraud included well known names such as media mogul Rupert Murdoch, former Secretary of Education Betsy DeVos and Walmart’s Walton family, to name a few.

Early on, biopharmaceutical company Pfizer refused to invest in the company because it didn’t believe the technology worked. A massive red flag.

As one reporter covering the case drily noted, an investor needed only to call Pfizer and understand something was amiss. One call.

Why do I share this story with you? During the past few months, we have had numerous reports from members receiving phone calls from persons claiming to be Central Electric Cooperative employees. Typically, the scammer declares the member is behind on their electric bill. If they don’t make a payment via credit or debit card or wire transfer, their power will be disconnected within 15 minutes.

I appreciate the number of members who have called CEC to inform us they received such a call or verify if the call was legitimate.

For those members who may get these calls in the future: If an account is past due, CEC provides two written notices before calling the member to inform them their service could be disconnected. Once we make that call, we allow the member a full business day to make a payment arrangement.

Likewise, as interest in green energy alternatives evolves, so do misleading sales pitches for rooftop solar. Members have reported receiving calls or visitors representing solar companies that claim to be partners with Central Electric to offer incentives to install rooftop solar on their homes. Some members have sent us pictures of social media ads posted by solar companies implying CEC will pay you to go solar. These ads are an attempt to get the member to call their salesperson. CEC has no partnerships with any rooftop solar companies, nor do we endorse any specific company.

If you get such a call or a visitor at your door, it only takes one call to us to verify its legitimacy. We are here to help you avoid becoming a victim of a scam.

President's Report

Above-and-Beyond Cybersecurity Measures

Last November, a small electric cooperative in Colorado became the victim of a cybersecurity attack that paralyzed the co-op’s payment processing, billing, and other internal systems. Industry news reported the co-op suffered a massive data loss and likely was the victim of ransomware, a type of malware that threatens to publish or block access to data until a ransom is paid. It took the co-op weeks to bring its systems back online.

What transpired at Delta-Montrose Electric Association—a co-op with 35,000 meters—is a sober reminder that small and rural co-ops are targets too.

Cybercriminals have expanded their targets beyond big business as they realize enormous profits by casting an ever-widening and deeper net. As a result, small business security breaches are escalating.

The amount of potential money to be extorted proves too tempting. The cybersecurity industry reported ransomware victims paid a total of $18 billion in ransoms worldwide in 2020. Another study reported the average ransomware payment jumped to over $300,000 in 2020, from $115,000 in 2019.

First and foremost, Central Electric focuses on keeping members’ data safe. Throughout the years, our information technology team has implemented multiple layers of security protection to safeguard the co-op and members’ information. To learn more, I encourage you to read the article on page 4, which highlights those measures and suggests steps you can take to protect yourself from cybercrime.

Just more than 85% of data breaches involve a “human element” as cybercriminals prey on individuals to gain access to one’s computer or a business’ computer system’s portal. The primary tactic deployed by cybercriminals is through social engineering, the attempt to manipulate an individual’s emotions to prompt them to take immediate action. The most common tools of their trade to do this are phishing (emails), smishing (text messages), vishing (voice messages).

Phishing is the most prevalent. Almost anyone who has an email account has received one. A relative or friend who needs money sent to them immediately or your credit card company is urging you to take action because of fraudulent use are just two of countless scenarios. While some phishing emails are easy to detect, cybercriminals have become increasingly sophisticated in their deception and luring individuals to act before realizing their mistake too late.

While CEC employees are daily targets of numerous phishing emails, one rarely shows up in their inbox. Our information technology team has implemented extensive technological controls that scan and filter out malicious emails.

If, however, a phishing email breaks through, our employees—the human firewall—are trained year-round to recognize them and report them immediately to our IT personnel. Our mantra is: STOP, LOOK, and THINK.

While past success is no guarantee for the future, members can take comfort in knowing we continually strive to go above and beyond to ensure our IT systems and your data remains protected.

President's Report

Capital Credit Returns Reflect Co-op Success

CEO Dave MarkhamIn mid-December, the Central Electric Cooperative Board of Directors returned $4 million in capital credits to current and former cooperative members who bought electricity in 1996. The ability to return this money is due to CEC’s financial strength–a direct reflection of efforts by the board of directors and employees to manage your cooperative efficiently.

Annually, after all operating expenses are paid, CEC’s remaining margins are allocated to members’ capital credit accounts based on the amount of electricity they bought throughout the year. After an extended period–historically within 25 years, based on the cooperative’s financial condition–capital credits are returned to members in the form of a check.

Since 1958, CEC has returned more than $40 million to members. In fact, capital credits have been returned every year since 2001 and in 38 of the past 41 years.

Capital credits are just one of the many benefits a CEC member-owner enjoys. As a not-for-profit electric utility, we focus on the quality of service, not profit. Members may participate in a democratic process to choose their respective board directors. Members may also benefit from our donations of time and funding to various organizations in local communities.

You enjoy the benefit of clean energy that is nearly 96% carbon-free, reliable and affordable, with some of the lowest electric rates in the state. On average, CEC’s residential rates are 15% lower than the local investor-owned utility’s comparable residential rate. There will be no change in CEC’s retail rate this year.

Successfully keeping our rates low relies on our members and their investment in the cooperative. As a not-for-profit, CEC has limits to obtaining funding for capital projects. We can borrow money from banks with interest or borrow funds from members through rates. Sometimes, CEC uses a combination of both options, but the latter enables us to keep borrowing costs and your rates low.

Over an extended period, CEC uses these funds to pay for long-term projects to maintain and upgrade the electric system. The effort proves challenging. Central Oregon is growing steadily, and the demand for electricity comes with ensuring reliability, enhancing safety and reducing threats to communities in high-risk wildfire areas.

Toward that end, we have strategically expanded substations to increase capacity to meet growth while replacing underground distribution cables in conduits to enhance reliability. We continue to upgrade outdated poles, aggressively expand wildfire mitigation practices such as tree trimming and vegetation management, and install specialized equipment on distribution and transmission lines in high-risk fire areas to protect members and their communities.

None of this is possible without our employees’ daily efforts to manage costs and operate the utility efficiently, led by the board of directors’ vision and guidance. Collectively, we work to ensure CEC members’ money is spent judiciously and provides the highest value.

If you have any questions about capital credits, please call one of our customer service representatives at 541-548-2144 or visit www.cec.coop/customer-service/capital-credits to learn more.

 

President's Report

A Year of CEC Highlights

CEO Dave MarkhamDuring another year in the grip of COVID-19, Central Electric Cooperative experienced challenges and successes worth highlighting.

When the first case of COVID-19 showed up in Central Oregon, CEC prioritized members’ and employees’ safety by continuously adapting and implementing new business practices. I am proud of our employees and their ability to adjust to the changing business environment while maintaining the service levels our members expect.

While these practices seem to be the new norm, this year brought the pandemic’s cascading effects into focus. Like most businesses, we dealt with significant supply-chain delays and shortages in contract labor, but employees found creative solutions to the challenges to minimize the impacts to members.

An early wildfire season started with the 6,000-acre Grandview Fire northeast of Sisters. CEC stood ready, having developed and finalized a Public Safety Power Shutoff plan earlier in the year as part of its wildfire mitigation plan. Thankfully, we did not need to execute it.

Our wildfire mitigation protocols required using more sensitive settings on-field equipment in high-risk wildfire areas during the fire season, resulting in a greater number of power outages and for longer periods. Line personnel had to visually inspect entire sections of power lines before reenergizing to ensure nothing was in the power line to start a fire. The trade-off helped ensure public safety in high-risk areas.

CEC became the first co-op in Oregon to install distribution fault anticipation technology on power lines in high-risk wildfire areas. The groundbreaking technology detects low-level electric disturbances caused by weather, foreign objects in contact with the power line or deteriorating equipment, relaying the information to us so we can fix the equipment before it fails—another measure to protect against wildfires.

As Central Oregon’s population grows, CEC anticipated members’ increasing interest and demand for electric vehicles. This summer, we rolled out our EV rebate program, which offers rebates for members who own an EV and install Level 2 chargers. I am pleased with the positive response. We look to build on the program’s initial success.

Lastly, a federal judge paused Gov. Kate Brown’s lawsuit asking for maximum water spills on the lower Columbia and lower Snake River dams. If successful, it would likely cost Pacific Northwest consumer-owned utilities $100 million or more a year, with an immediate 5% rate impact in 2022.

Almost all parties involved agreed to a temporary settlement, putting a nine-month hold on litigation until a long-term solution materializes.

Consumer-owned utilities will not incur any rate increases in 2022 due to the lawsuit. The Bonneville Power Administration will absorb cost increases incurred by the lost energy production due to additional water spills as part of the temporary settlement.

While we don’t know what is in store for 2022, you can be confident CEC is doing all it can to anticipate and prepare for whatever may come our way.

From everyone at Central Electric, we wish you a happy holiday season.

President's Report

We Appreciate Our Veterans In Word and Deed

CEO Dave MarkhamVeterans Day is November 11, and this month’s magazine honors Central Oregon’s veterans. We understand the debt owed to these men and women and want to recognize and show our appreciation with not just words, but deeds.

For that reason, Central Electric has worked with Honor Flight of Central Oregon and is partnering with Bend Heroes Foundation and its newest initiative, Central Oregon Veterans Village.

CEC’s involvement in these endeavors is consistent with the co-op’s commitment to one of its seven guiding principles: Concern for Community. This concern is rooted in the belief that the cooperative works for the sustainable development of the communities and members we serve.

Bend Heroes Foundation developed a program to address the veterans’ homeless crisis in Central Oregon, combining the best attributes of two successful programs in Clackamas County and Kansas City, Missouri. The Central Oregon Veterans Village will consist of 15 tiny houses—of which CEC funded one—and a community center. The temporary housing will include help for veterans to find gainful employment and eventually transition into long-term housing. To learn more about this project, see pages 4 and 5.

Many of you are likely familiar with the Honor Flight of Central Oregon program. After taking a two-year hiatus due to COVID-19, the program resumed flight this year, enjoying much local media coverage. In September, 28 veterans of the Korean War and Vietnam War made the flight to Washington, D.C., to visit many famous memorials— including those dedicated to the conflicts they participated in—and Arlington National Cemetery.

This trip is often one of a lifetime for these veterans who answered their nation’s call to go halfway around the world to defend the free world. We owe much to these veterans, and they deserve to be honored for their sacrifices. CEC is proud to have sponsored six of the 28 veterans who are co-op members. See page 8 to read more about this trip.

November is also when we celebrate Thanksgiving and reflect and express gratitude. Enduring and working through a pandemic brings greater awareness to what we can sometimes take for granted, such as family, good health and employment.

As CEO and president of Central Electric, I want to take a moment to express my appreciation and thankfulness for the co-op’s employees. They have demonstrated a get[1]it-done attitude without sacrificing the quality of service expected by members while dealing with the adversity and disruption imposed by COVID-19.

On behalf of our employees and board of directors, I wish you a safe and happy Thanksgiving.