President’s Reports

President's Report

Stay Comfortable While Keeping Bills Under Control

CEO Dave MarkhamAs cooler temperatures descend upon us this autumn, the extreme summer heatwaves will not soon be forgotten. Record-breaking temperatures strained those living in homes without air conditioning, leaving many to look for temporary solutions to keep cool.

Winter is right around the corner. Living in the high desert brings abrupt swings in temperatures and long stretches of snow and freezing temperatures. For many, it means long, cold and uncomfortable days, putting health at risk because many people do not have the financial means to pay typically higher energy bills in the winter.

Central Electric Cooperative excels in helping members in financial need pay their energy bills during extreme weather periods. Thanks to federal aid through the CARES Act and Energy Assistance Stability Coronavirus Relief program combined with regional organization NeighborImpact and CEC’s Project Helping Hand, we helped members receive $238,854 in financial assistance in 2020.

However, this financial assistance is only temporary and not a long-term solution. CEC has other ways to help members. Partnering with NeigborImpact and the federal Bonneville Power Administration, CEC can direct and guide members through various energy-efficiency programs to keep your home warmer during winter and cooler during summer or years to come while saving you money in the long run.

Working with BPA, CEC has developed 16 energy-efficiency programs to help all members, from enhanced new construction standards to high-efficiency heat pumps and water heaters.

Of those, I want to highlight our low-income ductless heat pump program.

Ductless heating and cooling systems distribute warm and cool air more evenly and are two times more efficient than electric resistance heating. The program, which started in 2015, fully pays for ductless heat pumps. By year’s end, nearly 100 qualified low-income members will have had free ductless heat pumps installed since the program’s inception.

Candidates who qualify typically have as their main heating source an electric furnace, wall heaters, baseboard heaters, plug-in heaters or another form of electric resistance heat. On average, members who install the ductless system have cut approximately 25% of their winter electric bills.

Another option is NeighborImpact’s weatherization program, from which many CEC members have benefited. It provides free services to income-qualified renters or homeowners. The program focuses on enhancing the building shell and improving its energy efficiency, including ceilings, floors, ductwork and insulation.

To learn more, please call Central Electric at 541-548-2144 to speak with an energy specialist. They can determine the best path forward by answering your questions and performing an energy audit at your home if needed. If you qualify for a low-income program, they can connect you with NeighborImpact.

Working together, we can help improve members’ quality of living no matter what weather the seasons bring.

President's Report

A Balanced Approach is Needed, Not More Litigation

CEO Dave MarkhamNot a day goes by that I don’t consider the cooperative’s long-term future and the ability to continue delivering our members clean, reliable and affordable energy.

Central Electric Cooperative relies on the federal Columbia River Power System for nearly all of its wholesale electricity. However, this renewable, carbon-free resource faces many external pressures undermining its value. The 20-year legal wrangling over federal agencies’ management of its hydropower system is one such pressure.

This summer, Oregon and special interest groups asked a federal judge to dismantle a 2018 flexible spill agreement negotiated by federal agencies, tribes and states seeking to balance the needs of salmon and electric ratepayers.

The federal agencies adopted the flexible spill agreement in its 2020 CRPS’ environmental impact statement. Oregon— which filed a lawsuit challenging the EIS in March—joined a separate legal effort in July to overturn the flexible spill agreement.

The lawsuit asks for maximum water spills on the lower Columbia and Snake River dams to aid fish migration for spawning. The round-the-clock spills would bypass the dams’ turbines and not generate electricity during critical months.

This questionable experiment will disproportionately favor fish with no guarantee of success at the expense of the region’s collective interests. It will adversely affect electric rates and grid reliability and further undermine the Columbia Basin Collaborative, created by the governors of Oregon, Idaho, Montana and Washington to find a comprehensive working solution.

Yes, Oregon is part of the CBC while simultaneously engaged in two legal actions against the federal government.

If Oregon’s lawsuit proves successful, the maximum water spill will cost the Pacific Northwest consumer-owned utility ratepayers up to $100 million, with an immediate 5% rate increase in 2022. It will also force dependence on more carbon-intensive energy market purchases to replace lost hydropower at a higher cost.

The lower Snake River dams played a critical role in keeping the lights on for millions of consumers during recent extreme weather events. The dams were a crucial energy source during last winter’s Willamette Valley ice storms and the recent heat waves that scorched Oregon.

Taking this generation offline will increase the risk of Northwest blackouts from 6.6% to 30%. This equates to blackouts every three years, which is unacceptable. Oregonians should be concerned, given recent blackouts in Texas and California.

Let’s not lose sight of the plaintiff’s overall goal: removing the lower Snake River dams. The most recent legal action, if successful, is only a stop-gap measure. As expressed in the motion, the maximum spills are only an intermediate step “until there is a comprehensive solution that includes restoring a free-flowing lower Snake River.”

Believing we can do better, I added my name to a multi-signatory letter to Gov. Kate Brown. The letter urges a comprehensive, balanced approach; foregoing the endless litigation to dictate a preferred outcome; and letting the CBC do its job.

Winston Churchill once said, “Never give up on something that you can’t go a day without thinking about.”

For me, that definitely rings true today and every day.

To learn more about the lower Snake River dams’ role in keeping the lights on, please see the article on pages 28-29.

President's Report

Legislature Addresses Clean Energy, Wildfires

CEO Dave MarkhamA sweltering June Saturday in Salem, where temperatures soared to an all-time high of 103 degrees, seemed a fitting backdrop to conclude an extraordinary state legislative session.

The state capitol’s doors were closed to the general public throughout the session due to the pandemic, leaving legislators to conduct much of their business virtually.

Under these unusual circumstances, the Legislature passed significant bills that will affect the utility industry for years to come.

After a decade of numerous attempts to pass significant clean-energy legislation in various forms, enough votes materialized to pull House Bill 2021—100% Clean Energy for All—over the finish line.

HB 2021 requires investor-owned utilities to transition to a 100% clean energy portfolio by 2040, with intermediate targets of 80% by 2030 and 90% by 2035. Consumer-owned utilities are exempt due to heavy reliance on the Bonneville Power Administration’s hydropower, which is 100% renewable energy.

The goal raises serious questions about long-term resource adequacy needs. Wind and solar should play an instrumental role in an all-of-the-above energy resources strategy, but are insufficient to serve as the backbone to the state’s energy supply. They cannot generate power consistently, often when needed most.

Yet this is where HB 2021 is taking us. One of the bill’s provisions prohibits sitings of any new gas-fired generation. No new future natural gas facilities, combined with efforts to remove the lower Snake River dams—if successful—will create an oncoming energy crisis to meet demand.

Natural gas and the lower Snake River dams play an instrumental role in delivering power in the Northwest when wind and solar aren’t available. Last year’s ice storms in the Willamette Valley and the most recent heatwaves demonstrate the need for these resources to serve as a backstop to intermittent renewable generation to prevent blackouts.

With excessive heat early and drought conditions, Oregon faces a fire season potentially surpassing last year’s historic wildfires. The Legislature took bipartisan action to beef up the state’s response to wildfire mitigation efforts, including requiring investor-owned utilities to submit to the Public Utilities Commission a wildfire mitigation plan by the end of this year. Electric cooperatives must do so by June 2022. CEC updated and formalized its plan in 2020.

The legislation includes $185 million for thinning forests and additional firefighting capacity. It compliments Gov. Kate Brown’s June executive order, which preemptively declared a state of emergency due to the imminent threat of wildfires across the state. It authorizes the Department of Forestry and the Office of Emergency Management to use other state agencies’ personnel, equipment and facilities to respond to wildfire emergencies.

CEC is doing its part, too. We continue to upgrade our system and implement our vegetation management plan, including removing hazardous trees and brush that could ignite a wildfire from a downed power line. We stand prepared to execute a Public Safety Power Shutoff in high-risk fire areas should extreme weather conditions warrant it.

Perhaps collectively, we can take the “extra” out of extraordinary for the remainder of this year.

 

President's Report

CEC Unveils EV Rebate Program

CEO Dave MarkhamDo you own or are you considering the purchase of an electric vehicle? Are you looking to buy and install a Level 2 charger at your home? If so, I have good news for you.

If you own or buy an EV, register it with CEC today and receive $50.

Buy a Level 2 charger from any retailer and you can receive a $150 rebate or $450 to install a Level 2 charger approved by the Bonneville Power Administration.

As Central Oregon’s population grows, so does our members’ interest and demand in EVs. The co-op’s service territory has the sixth-highest numbers of electric and hybrid vehicles in Oregon. Deschutes County ranks seventh-highest in Oregon for registered EVs and HEVs.

This upward trend will likely continue as EV adoption is poised to become mainstream in the decade ahead. Registering your EV with the co-op helps provide essential data to help us manage energy demands efficiently and plan for long-term electric infrastructure expansion.

The EV incentive and rebate program aligns with CEC’s historical commitment to support members’ interests. Throughout the decades, members advocated for the co-op to develop green energy and provide energy-efficiency programs.

CEC listened and took action. As a result, we built a community solar array at our Bend office in 2015. Since 1995, we have owned a portion of the Coffin Butte Landfill Gas Generation Project north of Corvallis. In the 1970s, the cooperative created a conservation and energy-efficiency program ahead of its time. Today, our programs offer members a wide range of energy-efficiency options to conserve energy.

As EVs become more affordable—accompanied by improvements in battery life and driving range—we want to partner with members to integrate EVs into our electric system that benefits everyone.

Please note, the money going to members for these EV and charger rebates does not come at the membership’s expense. The money comes from the state of Oregon’s Clean Fuel Program, funded through the purchase of credits by regulated entities whose fuel sources do not meet the annual average carbon intensity requirements. The state wants utilities to spend the financial proceeds from selling those credits on promoting transportation electrification in their service territories.

To take advantage of our valuable rebates and incentives programs, visit us at www.cec.coop/customer-service/electric-vehicles. Here, you can quickly register your vehicle, review eligible charger models and complete the online rebate application

President's Report

Preparing for Wildfire Season

CEO Dave MarkhamAs Central Oregon enters fire season, I urge you to explore this month’s Ruralite dedicated to wildfire and Public Safety Power Shutoff preparedness. You will find information to help you prepare for a possible PSPS event, and how to protect and safely
evacuate your home should the need arise.

Last year’s Labor Day wildfires are a sober reminder of how high-wind events can quickly contribute to the spread of wildfires in wildland-urban interface areas. Combined with ongoing droughts; long, hot summers; and disruptive weather events; we must
remain vigilant in our awareness and preparation.

One only has to drive through the Cascades on Highway 126 along the McKenzie River or Highway 22 through Detroit to witness the almost instantaneous devastation incurred by the high winds and subsequent fires that ripped through those areas, tragically taking human life.

Foundations lay bare as adjacent tents and trailers serve as temporary housing. Along the winding highways, the noises of chainsaws, tree pickers and chippers fill the air.

Hope is in the air, too. Skeleton framing shapes new homes, and restrung power lines provide energy for the rebuilding. The occasional “McKenzie Strong” or “Detroit Strong” signs greet drivers, inspiring you to believe those who chose to remain will pull through.

Anyone living in Central Oregon long enough knows what happened on the west side of the Cascades can happen here. CEC’s service territory—which covers 5,300 square miles, including multiple national forests—has several high-risk areas susceptible to wildfires.

We can’t predict the next lightning strike or extreme weather event. But we are making every effort to minimize our system’s assets as a contributing factor in a wildfire’s ignition.

CEC’s wildfire mitigation plan takes an active and comprehensive approach toward that end. Goals and metrics measure their effectiveness while allowing for retooling and improving practices as they evolve, including adopting new technologies when available and feasible.

The plan also includes Public Safety Power Shutoffs as a potential tool. Turning off electricity is not a decision taken lightly. Many factors can influence a decision: the
National Weather Service’s red flag warnings, sustained high winds and low humidity, public safety concerns and live boots-on-the-ground reports.

CEC’s electric system follows the National Electrical Safety Code’s specifications to resist high winds. However, it is the threat of foreign objects contacting our power lines during a high-wind event that heightens concerns—such as trees outside of rights-of-way, tarps and canopies that can bring down poles and power lines and ignite fires. To prevent this from happening during a high-wind event, executing a PSPS can be an effective tool to protect members, homes and local communities.

Preparing for wildfire season must be a collective effort. We must be ready for the worst and hope for the best. To learn more about what CEC is doing and what you can
do, visit www.cec.coop/safety-education/wildfire-preparedness.

President's Report

CEC Sells its Telecom Subsidiary

Central Electric Cooperative (CEC) announces that it has sold its ownership interest in LS Networks (LSN). The transaction closed on March 31 with CEC receiving approximately $50 million as its share of the sale proceeds.

CEC helped create LS Networks 15 years ago with a mission to bring top-tier bandwidth and fiber-optic network connectivity services throughout the Pacific Northwest. LS Networks was owned by CEC’s subsidiary, CEC Resources, and three other cooperative shareholders. The carrier-grade network has grown to 7,800 fiber miles serving large and small commercial and individual customers in rural and urban communities, including schools, governments, healthcare organizations and businesses.

“I am incredibly pleased to see the investment CEC made over the last 15 years in LSN prove financially rewarding for the co-op,” said CEC’s President and CEO Dave Markham, former chair of the LSN Board of Directors. “Timing is everything, and now was the opportunity for the co-op to monetize its investment after all these years,” he added.

In 2000, CEC formed CEC Resources consisting of for-profit companies offering propane and telecommunication products and services. Born out of necessity due to energy deregulation, which threatened to up-end the electric utility business model and create financial uncertainty, the subsidiaries allowed CEC to diversify and generate additional income streams.

William B. Keeton, CEC’s board chairman, recalls those early days. Keeton and fellow CEC board member Tom Strand, both board members at that time, stated, “The CEC board made the challenging but right decision for the co-op to invest in LSN.”

Fifteen years later, having stayed the course through some tumultuous times, the board’s foresight and intuition proved correct.

Dave Markham and CEC’s Chief Financial Officer Rawleigh White, who joined the LSN board in 2008, helped guide LSN through its challenging years and, eventually, on the path towards long-term growth and economic viability. They advocated for LSN to reconfigure its business model to aggressively fund and build out a “last mile” network to generate greater market penetration and stability. Over time, the investment and expansion into commercial, government, education, medical and wireless carrier business propelled LSN’s revenue upward over the last three years.

CEC Board Director Bill Rainey, who chairs CEC Resources, lent his 35 years of business and legal acumen to help navigate the sale’s complexities and deliver this significant achievement.

“The CEC Board of Directors’ prudent decision to sell LSN has enhanced the co-op’s long-term financial well-being,” said Rainey. “It was a privilege to take part in this effort.”

 

President's Report

State Legislative Priorities for Co-Op Members

CEO Dave MarkhamThe 81st Oregon Legislative Assembly is underway. Significant bill proposals could financially affect Central Electric Cooperative and the state’s consumer-owned utilities. We will try to work effectively within the legislative process to educate and serve as a solution-oriented leader to provide safe, reliable and affordable service to our members.

Wildfire Mitigation Plans

Senate Bill 287 takes an essential step toward protecting Oregonians against catastrophic wildfires. The legislation’s primary provision requires electric utilities to file a wildfire mitigation plan with the Oregon Public Utilities Commission. CEC believes developing a thorough plan and submitting it to OPUC is prudent and responsible.

Last year, we updated and formalized our existing plan, which will undergo a biennial internal review and revision accordingly. CEC also participated in OPUC’s wildfire workshops to highlight ongoing challenges and the wildfire assessment tools CEC deploys to mitigate wildfire risk.

Clean Fuels Program

House Bill 2188 would undermine local control by imposing a 20% transfer of consumer-owned utilities’ energy credit dollars from the state’s Clean Fuels Program to its Public Purpose Fund, where it would be spent in metropolitan areas to promote transportation electrification.

The Clean Fuels Program requires regulated entities’ fuel sources to comply with an annual average carbon intensity. If they meet or come under the average, the utility receives credits with a financial value.

A consumer-owned utility such as CEC may participate. Since the co-op relies almost 100% on carbon-free hydropower from the federal Columbia River power system, CEC generates credits, which may be sold to private parties looking to offset their carbon-intense energy portfolio. However, the entirety of the financial proceeds should remain in CEC’s service territory to promote transportation electrification and not be redistributed to urban areas at rural communities’ expense.

100% Clean Energy

Environmental and special interest groups are pursuing a 100% clean energy goal by 2050. Proposals in circulation lack specifics. One aims for 100% by 2035 and defers to state agencies to define renewables. The other calls for 100% by 2045.

The paramount concern for consumer owned utilities is how the bills will treat hydropower. CEC can claim an almost 100% carbon emission-free energy portfolio due to this resource.

Yet Oregon’s renewable portfolio standard only considers hydropower renewable under limited circumstances. If the 100% clean energy proposals do the same, CEC would be significantly disadvantaged and out of compliance, forcing us to buy more expensive alternative renewables, such as wind or solar. As these legislative proposals evolve, they must recognize hydropower as a carbon-free and critical resource to reach a 100% clean energy future.

You Can Help

We need your help as the legislative year unfolds. I urge you to join the ORECAAction Network, where we will keep you informed and may occasionally call on you when decision-makers need to hear your voice. Sign up at www.oreca-action.org.

Working together, we can best protect your interests as a co-op member.

President and CEO Dave Markham

President's Report

CEC Formalizes Wildfire Mitigation Plan

CEO Dave MarkhamLast year, Central Electric Cooperative undertook a comprehensive effort to update and formalize its existing wildfire mitigation plan. The plan will undergo a biennial review and be updated as needed or required.

More than 5 million acres burned in California, Oregon and Washington in 2020, marking it the most active fire year on record for the West Coast. In Oregon, extreme windstorms instigated catastrophic wildfires, which burned more than 1.5 million acres, taking human life and thousands of homes. Last year’s wildfires put an exclamation point on a decade in which the West experienced its deadliest and most extensive wildfires in history.

In California, investor-owned utilities came under intense public scrutiny and state legislative oversight. Pacific Gas & Electric—the state’s largest IOU—was proved responsible for igniting the Camp Fire in Paradise and other wildfires.

As a result, California’s governor signed a bill into law in 2018, requiring every electric utility to prepare a wildfire mitigation plan. This was one of many legislative attempts to promote wildfire safety and accountability.

Oregon public utilities and cooperatives are not yet legislatively mandated to file a plan with the Oregon Public Utilities Commission. However, that could change this year because there is a wildfire legislative proposal with such a provision. Gov. Kate Brown supports such a measure and will likely sign it into law should the state Legislature approve.

CEC believes developing a thorough plan and submitting it to the OPUC is prudent and responsible. To ensure the highest standards, CEC worked with a long-established firm in the Pacific Northwest that provides services to consumer-owned utilities throughout the region, including assessments, reviews or the development of wildfire mitigation plans.

The plan takes an active and comprehensive approach tailored for CEC’s service territory with the ultimate objective to minimize CEC’s assets as the origin or contributing factor in a wildfire’s ignition. Goals and metrics measure effectiveness while allowing for retooling and improving it as practices evolve to adopt new technologies when available and feasible.

The plan also includes public safety power shut-offs as a tool to reduce wildfire threats. A PSPS may occur when the National Weather Service issues severe weather warnings for events such as extremely high winds. A recent example occurred on Labor Day when the NWS warned of winds reaching 70 mph on the Cascades’ west side. Thankfully, those winds topped out at 35 mph in CEC’s service territory and did not require the co-op to turn off power to any of its communities. However, there may come a time when such action is required. If so, CEC’s plan lays out general guidelines to follow.

Upcoming Ruralite issues will include information on protecting your home from wildfires, equipping you with emergency preparedness tips and sharing how the co-op will communicate with members should a PSPS scenario occur. For now, go to www.cec.coop/safety-education/wildfire-preparedness/ to read our wildfire mitigation plan and find other helpful materials.

We can anticipate, plan and prepare for the unexpected. With safety as our highest priority, CEC continues to take constructive steps toward mitigating the threat of wildfires in the communities where we live and serve.

President's Report

Governor Should Reconsider

CEO Dave MarkhamUpon hearing Gov. Kate Brown’s intent to sue the federal government over how it manages the federal Columbia River system, I was disappointed but not surprised at her decision. I encourage her to reconsider.

In October, the governor committed to participating with Washington, Idaho and Montana—known as the four-state process—to define a collaborative framework to find common ground to restore a healthy salmon population without adversely impacting affordable electricity and local economies.

Yet right before Thanksgiving, Brown directed the state of Oregon to file a 60-day notice of intent to sue the federal government over the National Oceanic and Atmospheric Administration’s 2020 environmental impact statement. The scientific study examined the potential impacts on fish and wildlife from proposed hydroelectric operations and found the recommended operations were consistent with the Endangered Species Act.

At issue is the governor’s unwillingness to accept the EIS’s recommendations. The three-year study, produced by multiple federal agencies, did not include breaching or removing the lower Snake River dams in Eastern Washington, a critical component of the Bonneville Power Administration’s hydroelectric Columbia River system. The dams produce 1,000 average megawatts of reliable, carbon-free energy annually—enough to power more than 800,000 Northwest homes, including 500,000 in Oregon.

Instead, through her actions, the governor dismissed the EIS before its completion as she publicly released a letter early last year calling for the removal or breaching of the four lower Snake River dams.

Brown claimed removing the dams would “simultaneously address both the orca and salmon recovery dilemma” in the region. However, she chooses to ignore that successful fish-passage technology at the lower Snake River dams achieved a juvenile dam passage survival objective of 96% to Chinook salmon and steelhead, according to a 2017 NOAA Fisheries study.

I have shared in this space before that removing the dams would create the need to replace lost energy at an estimated cost of $860 million to ratepayers. Ironically, the loss of available energy would need to be offset by energy sources with higher carbon content, undermining the governor’s long-term carbon reduction goals.

All parties involved come to the discussions with different perspectives but are committed to finding a consensus on a viable solution. What is so disappointing in the latest turn of events is how the governor’s litigation threatens to undermine the four-state process before it has earnestly begun and stalls momentum for any collaborative dialogue. As a result, the legitimacy of the process may be dead on arrival.

Rather than resort to litigation, I respectfully urge the governor to reconsider and come back to the table for the good of Oregon and the region.