Message for You...
Super Bowl LI has to go down in the history books as one of the greatest games of all times! Not just in the sport of football, but in the arena of sports in general. There were just so many “1st time evers” recorded in this game such as the 1st super bowl ever to go into overtime and the first time ever a team came back from a deficit of 25 points to win the game. Prior Super Bowl LI, the largest deficit ever overcame by the winner was 10 points, so what a game it was! I’m neither a Patriots nor Falcons fan, but in the spirit of sportsmanship you simply have to take your hat off to Tom Brady and the New England Patriots! I am reminded of what John Maxwell, pastor and author, said in regards to leadership – “A leader is one who knows the way, goes the way, and shows the way”. In my opinion, that sums up what others deemed impossible from a 25 point deficit when Tom Brady led the New England Patriots to victory in Super Bowl LI!
We received some great news last month from NCEMC, our Statewide Association. LREMC will receive a credit on our 2017 Power Bill to the sum of $7.1M. We budgeted $5.5M for 2017, but Statewide had an exceptional December 2016 pushing our total WPCA, wholesale power cost adjustment, credit for 2017 to $7.1M. Please do not confuse the WPCA with your Capital Credit Return you receive in October of each year. The WPCA is a cost adjustment to address the cost differential between the price of power and what would normally be billed through the standard rate blocks. Capital Credits are annual operating margins remaining after all expenses have been paid. The margins are then returned to the membership on a specified cycle representing each member’s share of the cooperative’s margins and ownership. Our goal for retirement of capital credits is 24 years, so in 2017 we hope to pay out margins from 1993 at the minimum. What I would like to focus on is the effect of the WPCA on you, the membership. If you recall, in 2016 we returned approximately $5.3M in a WPCA averaging approximately $30/member over the months of July, August, and September. Of course, this is an average/member as some saw more and some saw less as the credit was based on usage. So, I am sure your question is how does the 2017 WPCA of $7.1M affect me, the member? The short answer to that is we plan to credit on an average approximately $118/member over the calendar year 2017. As a reminder, your actual credit may be higher or lower depending on your usage for 2016. The question at hand is do we continue to manage the WPCA via a credit on a yearly basis or make a change to our standard rate blocks allowing the rate to manage the credit on a monthly basis. Rate decreases are easy topics to discuss with the membership, but if the WPCA becomes a debit in 2018 that could potentially call for a rate increase and that is never an easy discussion with the membership. The last thing we want to do is “jockey” the rates up and down frequently creating undue concern in your life. As of right now, it seems prudent not to adjust the rates, but manage the WPCA via a credit on your power bill as the WPCA is a variable mainly driven by the cost of fuel such as coal, gas, oil, and etc. which we have no direct control over. I will keep you posted throughout the year, but currently your cooperative is very financially stable and managing your assets through much discussion and analysis.
As always, if I can ever be of any assistance to you, please do not hesitate to contact me. I am more than willing to share our financial reports with you discussing our strategic plans for the future. Most importantly, I would simply love to hear your thoughts and desires on where you want the cooperative to be in the next 5 years or so. We, LREMC, have lots of strengths and are doing a lot of great things, but in order for us to get stronger, we have to be committed to working on our weaknesses that much harder. Bill Gates sums it up this way – “We all need people who will give us feedback. That's how we improve!”
Steven C. Hunt, President &
Steven C. Hunt, President & CEO
Past Messages (click on title below for PDF version):
January 2017 - Message from CEO
February 2017 - Message from CEO
March 2017 - Message from CEO
April 2016 - Message from CEO
May 2016 - Message from CEO
June 2016 - Message from CEO
July 2016 - Message from CEO
August 2016 - Message from CEO
September 2016 - Message from CEO
October 2016 - Message from CEO
November 2016 - Message from CEO
December 2016 - Message from CEO