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Board
Meeting Summary
February 25, 2003
The meeting was called to order by
President Bonesteele at 7 pm with all members of the board present. The meeting
agenda and consent calendar were unanimously approved.
Board members Beach and Dyer reported on their
attendance at the National Rural Electric Cooperative Association (NRECA)
Directors Conference. Both reported receiving worthwhile information.
The Board reviewed the Salem Electric Vehicle
Purchasing Policy at the request of board member Beach; after some discussion
the consensus of the board was the policy is a good one and requires no
changes.
Administrative Services Manager, Jack Belleque,
called attention to the list of the top 50 vendors doing business with Salem
Electric. Belleque additionally reported that the auditors have completed their
field work and will present the annual audit report at the April board meeting.
Engineering and Operations Manager, Roger Kuhlman,
updated the board on the Last Mile Electric Co-op.
Member Services Manager, Terry Kelly, provided the
board with the most recent data on the status of the heating assistance
program, reporting that $140,000 of the $180,000 budget has been committed. The
program is budgeted through April 30, 2003, or until funds run out. Kelly said
the funds may be depleted before April 30.
General Manager, Bob Speckman, informed the board that
he has been asked by NRECA to serve on a National Diversity Task Force.
Speckman announced that the Bonneville Power Administration may be implementing
a 15% wholesale rate increase in the fall. This equates to about a 10% retail
increase. Members will receive updates on the increase in future issues of the Info
Bulletin.
Speckman said plans are moving ahead for the annual
membership meeting scheduled for May 13. Staff members representing the Member
Services, Accounting, and Engineering & Operations departments will make
presentations at the meeting.
Action Item: The board unanimously approved the
adjustments to the 2003 budget.
New Business: Director Horn gave an update on
activities of the Oregon Rural Electric Cooperative Association (ORECA) where
she serves as Salem Electric’s board representative. ORECA is planning next
year’s budget and adopting new guidelines for the statewide political action
committee.
Bonesteele reported on her participation with the
Mid-Willamette Valley Council of Government where she serves as a
representative of Salem Electric.
Board members reported on ORECA’s Legislative Day at the Capitol, and agreed
the legislative dinner was well received.
The
meeting adjourned at 8:35 pm.
Jeff Anderson
Secretary/Treasurer
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Northwest utility rates
have been going up ever since California tried deregulating their utility
industry. Sure, there was also a low water year, but the major cause was that a
few companies saw a way to make huge profits by manipulating the market. Having
watched this over the past couple of years, I think I have figured out some
things. One is that deregulation was really just a game of “let the people who
are supposed to play by the rules, make the rules.” We all know what happens in
that kind of game. The news articles in many papers showed that the rich got
richer and, in this case, they got a lot richer, and at our expense—even here
in the Northwest.
For years we’ve been reading about how deregulation
was going to give us “choice” and that, like the telephone company, new
products would arrive. When it comes to residential electric service, I’ve
never been quite sure what they meant by “new products.” Proponents of
deregulation also like to point to the airlines and what deregulation has done
in that industry. Some would blame the bankruptcy, or near bankruptcy, of some
major airlines on September 11. It certainly was a factor, but the airline’s
problems were already obvious earlier than that. It may have gotten cheaper to
fly to Las Vegas or even New York, however, if your aunt lives in some small
Midwestern town, you might as well rent a limo and a driver to take you there,
compared to the time, effort and money you will spend trying to fly there.
Salem was even no longer profitable for
a major airline. Pure profit became the motivation when requirements to provide
service were scrapped. Yes, deregulation shut down all those less profitable
destinations.
So how does any of this affect our electricity rates.
This is just my way of pointing out once more that deregulation, even though we
aren’t directly involved in it, hasn’t finished with us yet. Our sole supplier
of power is the Bonneville Power Administration (BPA). BPA is planning yet
another increase in the rates it charges its utility customers—like Salem
Electric. The preliminary number is 15%, but that may change as they go through
their public hearings over the next few months. Whatever they end up with may
go into effect this fall. If it is 15% you can expect your bill to go up by
about 10%. Some of this cost is directly attributable to contracts that BPA
made during the California crisis to buy power for future supply needs at rates
that are now much higher than the market rate.
Salem Electric’s board and staff will watch and provide information at the
public hearings as often and as much as possible on how BPA intends to set its
rates. Organizations like the Public Power Council and the Northwest
Requirements Utilities represent Salem Electric and dozens of other
consumer-owned utilities in the BPA rate case. Our voice is heard best when it
is in concert with many other voices. That is what these organizations do for
us.
We know very well what has happened to your (and our)
electric bills in the last few years. Although Salem Electric’s rates have not
changed since October 2001, that 27% increase has made it very difficult for
some of our less fortunate members to pay their bills. The board recognized
this when it approved significant increases in the budget for our Low Income
Heating Assistance Program. 1,000 of our members received help from that
program last year and it looks like we’ll hit that number again this year.
Also, many of you help out when you add an extra dollar to your bill through
our Dollar Check-Off Program to aid those in need.
I wish this could be more optimistic. We hope to
report, in a future Board Report, that the final number will be smaller, but
know that whatever it is, we will do whatever we can to keep the increase at a
minimum. We will also do whatever we can to help our members cope, through
funding energy efficiency improvements and outright grants to those who need it
the most.
Jim Dyer
Director
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