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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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