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The January meeting of the
board of directors of Salem Electric opened with a welcome to Bob Speckman as
the utility's new General Manager and to Terry Kelly as the Member Services
Manager.
Administrative Services Manager Jack
Belleque presented the Statement of Operations for year-end 1996 noting that
the margin is the largest the co-op has ever had. According to Speckman, this
year's margin could be tied to growth. It is difficult to predict margins a
year ahead. Belleque noted that margins will be larger as the years go by
because of inflationary dollars and growth, making larger margins necessary. He
also noted that, though this year's margin is large, it is not much larger than
Salem Electric's capital expenditures for the year.
Regarding capital
expenditures, Bonesteele asked, on behalf of a member she had spoken with, if
Salem Electric would be installing underground lines for the widening of
Wallace Road. Engineering Manager Roger Kuhlman said the underground lines had
not been proposed. He noted that it is far more expensive to go underground
than to go overhead. Kelly said he is involved in a City of Salem community
group called the NEEDS Program that has discussed putting the power lines
underground. Director Culver asked what additional costs are involved with
underground installation. Kuhlman answered that it would take much more labor
to inspect and maintain underground than overhead facilities. Bonesteele asked
for a ballpark figure on the difference in cost to move the existing poles
versus putting the service underground. Kuhlman estimated a cost of $1.6
million to go underground, with an outlay of $400,000 to move the overhead
service.
In regard to the Credit
Review, Belleque said the 1996 writeoffs were higher than the previous year,
partially due to several businesses that entered the writeoff status during the
year. Speckman said he is very impressed with the work staff member Paul Nelson
does with credit. He does a great balancing act and works well with customers.
Director Koho agreed, as did the other directors.
In the Summary of Operations
Activities for 1996, Kuhlman noted that ending 100.4% of budget was great. He
reminded the board that Salem Electric sustained little damage from the weather
and noted that the outage time per customer in 1996 was 8.1 minutes,
considerably lower than national averages for either public or investor-owned
utilities. Kuhlman said that Salem Electric had 470 new services connected in
1996, the second highest number in the co-op's history for a one-year period.
Staff member Cecelia Darby
provided the board with a summary of the customer contact system, how it works
and the types of contacts from customers. Director Dyer noted that the utility
has an extremely good relationship with its members.
Kelly gave a positive report
on Salem Electric's participation in conservation. The utility goal for 1996 of
saving 3 million kwhs was exceeded by 10% while spending $100,000 less than
budgeted. 1997 will be the first year the co-op won't be relying on any funding
from Bonneville.
Speckman called attention to a
letter received from the Federal Department of Energy giving Salem Electric
recognition for energy efficiency and renewable energy.
A letter was received from the
Keizer Heritage Foundation as a thank you for moving a flag pole donated to the
foundation by a business no longer in operation. At management's discretion,
Salem Electric sent a crew to cover the removal procedure. It was the feeling
of the board that such requests be considered on a one-to one basis.
As a follow-up of the
discussion in January regarding the director education policy, approved in
March 1996, the current directors approved a change that could readily be
achieved. A synopsis of the new policy reads that "all directors are encouraged
to attend at least four industry-related educational conferences a year..."
Speckman reminded the board of
the Annual Meeting, scheduled for May 13. The speaker for the meeting is yet to
be determined. Director positions #l and #2, currently held by Anderson and
Towslee, will be up for election.
Northwest Conservation Act
Coalition (NCAC) representative, Steve Weiss was in attendance and spoke
briefly about bills before the legislature regarding retail wheeling.
Bonesteele thanked the
department heads for their informative monthly reports. She suggested that the
board appoint a committee that can look into the financial operation of the
cooperative and review the general operations of the company. She said she felt
such an activity was appropriate in light of the change in management after
such a long tenure (29 years). Director Culver said the cooperative is entering
a new era and it would behoove the board to have a look at things and see what
they want to do. After much discussion, it was decided to meet as a full board
to determine goals and a purpose for further focus.
The meeting adjourned at 8:50 p.m.
-- Alicia Bonesteele,
Secretary/Treasurer
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