President’s Reports

At last month’s Central Electric Cooperative annual meeting (see story beginning on page 4), I had the pleasure of acknowledging our board of directors for its support of one of the Seven Cooperative principles, Concern for Community. I told the members attending that our board does not get enough credit for making our communi­ties stronger by assisting those in need or encouraging those who show an exceptional desire to work hard and excel in life.

While many causes benefit from the board’s wisdom and CEC’s support, I was able to cite but a few:

• The 4­H and FFA livestock auctions at the Crook, Jefferson and Deschutes county fairs.
• An educational scholarship for a qualified Central Oregon Community College student who is a CEC member.
• A unique kind of educational assistance awarded to a CEC member through the Soroptimists’ Live Your Dream Scholarship.
• The Oregon National Guard Youth Challenge program, which gives academically at-­risk youth a second chance at pull­ing themselves together and earning a high school diploma.
• A number of food banks, including the St. Vincent De Paul operations in Bend, Redmond and Prineville, along with the Jefferson County and Sisters food banks.
• The Washington, D.C., Youth Tour Program, which sends two CEC member high school students in their junior years to the nation’s capital each year and gives them invaluable exposure to our nation’s history, the workings of our system of gov­ernment, and the importance of public service. More than 1,700 high school students from across the country make this annual trip.

I hope each of you is pleased with how the board applies this important principle of concern for community. These causes and organizations make life better for all of our communities and I encourage each of you to learn more about them. The support your co­op provides to our communities should make all of us proud to be members of Central Electric Cooperative.

Sincerely,

Dave Markham
President and CEO

We must constantly monitor the rules, regulations and laws affecting Central Electric to protect the affordability and reliability of your electric service. With the Oregon Legislature now in session, it is peak season for CEC and the rest of Oregon’s electric co­ops tracking changes that impact electric co­op members.

The following bills are of key concern at this point of the session:

Senate Bill 301 would eliminate employers’ ability to disci­pline employees—or screen prospective employees—for mari­juana use during nonwork hours. This puts us at odds with fed­eral law that treats marijuana as a Schedule 1 drug. As holders of commercial driver licenses, our crews must comply with federal drug use regulations. We also have concerns about safety—extremely important for a workforce with everyday exposure to high ­voltage electricity and heavy equipment.

Franchise fees, levied by local governments on utilities for the use of transpor­tation corridors, are always a hot topic. We strongly support Senate Bill 840 capping city franchise fees at 5 percent—a level some cities have worked to exceed. The cap prevents municipalities from increasingly turning to utility consumers as a revenue source. A different franchise fee-­related bill demanding our opposition is House Bill 2362. It would allow counties to also charge franchise fees. We believe this is an unjus­tified attempt to reach into our members’ wallets to fund local government.

Oregon strongly promotes renewable energy development. To make it more affordable for our members who agree, CEC supports an effort to make community solar participants eligible for state tax incentives. Currently, community solar partici­pants have no access to tax incentives. State and federal tax incentives are available to people who own their own solar energy systems, and for­-profit community solar developers receive federal tax incentives. This lowers prices for their participants, but the benefit is not available to CEC because we and other cooperatives are not­for­-profit businesses. We want to make our community solar members eligible for Oregon tax incentives under the Residential Energy Tax Credit program—the same program that flows incentives to rooftop solar system owners.

These are the most prominent of a number of legislative actions that could affect electric co­op members. If you join the ORECA­-Action Network, we will keep you apprised of these and other key issues. By signing up at www.oreca­-action.org, we will not only keep you informed, we may on occasion call on you for help when we need decision-­makers to hear your voice. It is through our unified efforts we can best pro­tect your interests as a co­op member.

Respectfully,

Dave Markham
President and CEO

Friday, April 14, 2017

Deschutes County Fairgrounds South Sister Conference Hall
Redmond, Oregon

1 p.m. Registration Begins
1:30 p.m. Meeting Begins

• Business meeting
• Officer reports
• Director elections
• Door prizes
• Grand prize
• Other business

“Foolishness” is the nicest word I can use to describe a recent legal maneuver that could someday make your bills increase. In early January, environmental groups filed an injunction in federal court to require that the U.S. Army Corp of Engineers sus­pend improvements at four federally owned dams on the lower Snake River. They want to halt 11 infrastructure projects, including new turbine blades at one dam, so the dams don’t become more valuable and therefore harder to remove. That action could result from an adverse judge’s ruling following an active environmental impact study that’s at least five years from completion.

“Cynical” is another word that comes to mind. That’s how I view such attempts to end­-run the recently launched environ­mental impact study process, itself undertaken by court order. Dam­removal advocates are willing to compromise dam safety and reliability so they can boost their legal position.

At the same time, the state of Oregon is seeking a court order requiring the fed­eral government to spill more water at eight dams—bypassing the turbines—to aid young fish migrating to the ocean. This senseless request ignores scientific evidence that more spill could actually harm fish. During the past 15 ­plus years, changes to flow regimens and improvements to other fish ­passage technologies have produced fish survival rates approaching those of undammed rivers. None of the eight federally owned main stem Columbia hydroelectric projects has a yearly survival rate for chinook salmon below 95.9 percent.

I hope you will join our political grassroots network at www.oreca­action.org so we can keep you informed of related developments, along with other issues affecting the reliability and cost of our service to you. ORECA ­Action membership also gives us a way to seek your help in speaking out on issues. Every day, your voice becomes more important to our ability to protect co­op membership’s best interests.

Respectfully,

Dave Markham
President and CEO

As addressed in the story on page four in this month’s Ruralite, Central Electric is embarking on a historic change to the design of our rates. Often, when CEC adjusted rates, we applied a uniform percentage change across all rate categories, rates and facili­ties charges. The new rate design going into effect this month and first appearing on February’s bills will ensure greater fairness and balance in light of the significant changes confronting our industry driven by renewable energy growth, increasingly unpredictable weather patterns, and growth in energy­ efficiency technologies. The changes vary by rate class and member. For most members, cost increases in some areas are offset by decreases in others. The overall rate design will have no impact on revenues to CEC.

The fundamental purpose of the change allows us to distin­guish how we recover our energy costs from our fixed costs. However, the rate redesign also was adopted to bring greater balance and equity to our cost recovery among the various rate classes. This means each rate category has its own set of changes to its billing. Our article beginning on page four explains why the change was made and how it is structured, but its primary emphasis is on our residential members’ ser­vice. After all, about 87 percent of our membership accounts are residential.

To see details of how the other rate categories are affected, I recommend you visit the News and Information section of our website, www.cec.coop. While every rate class had its energy charges reduced to offset higher facilities charges, each class’s new design has other noteworthy changes. For those other than the residential class, they include:

• Commercial. This rate class also sees increases to demand charges, which mea­sure peak energy use within a given month.
• Domestic Irrigation. The facilities charge increase is more significant than for the other categories on a percentage basis due to the highly seasonal nature of this rate class’s annual activity.
• Agricultural Irrigation. The redesign introduces facilities charges for the first time for this rate category, along with reduced energy charges.
• Industrial. The facilities charge for these 18 members remains stable because our cost of service analysis determined no change was required.

The rate redesign was developed with the goal of ensuring that each member is billed fairly while at the same time planning for the long ­term financial stability of the co­op. This is particularly important now because of the historic changes the electric utility industry is experiencing.

Respectfully,

Dave Markham
President and Chief Executive Officer