1 MINUTES SOUTHSIDE ELECTRIC COOPERATIVE MEETING OF THE BOARD OF DIRECTORS OCTOBER 17, 2019 @ 1:30 P.M. HEADQUARTERS BOARD ROOM PRESENT: Frank W. Bacon (Chair) Earl C. Currin, Jr. (Vice Chair) Paul S. Bennett (Secretary) Charles J. Friedl (Treasurer) Brenda H. Johnson Kristie Martin-Wallace Clive C. Pettis, Sr. Sarah W. Sanders William T. White Frank F. Rennie (General Counsel) Christine Marston (Minute Taker) STAFF: Bradley V. Furr, VP of Operations George A. Felts, VP of Engineering Jason Loehr, VP of Finance & Corporate Services Jean H. Morris, VP of Human Resources Ronald O. White, VP of Member & Public Relations GUEST: Jacob McCann, Director of HR Joshua Wells, Director of Technical Services Jonny Hester, Supervisor of Operations Services Dr. Frank Bacon presided, and Jacob McCann gave the invocation. PREVIOUS MINUTES On motion made and seconded: The Minutes of the September 17, 2019 Board Meeting, 2019 Annual Meeting and 2019 Reorganizational Meeting are approved. MOTION CARRIED ODEC REPORT The ODEC report was given by Earl Currin. PRESIDENT/CEO’S REPORT 1. The SEC Financial and Statistical report for September 2019 was reviewed and is attached to and made a part of the Minutes.
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MINUTES SOUTHSIDE ELECTRIC COOPERATIVE ... Minutes/October...Penske reporting f. 2020 budget fleet replacement will be made upon Penske recommendation, district operation supervisors,
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MINUTES SOUTHSIDE ELECTRIC COOPERATIVE
MEETING OF THE BOARD OF DIRECTORS OCTOBER 17, 2019 @ 1:30 P.M. HEADQUARTERS BOARD ROOM
PRESENT: Frank W. Bacon (Chair) Earl C. Currin, Jr. (Vice Chair) Paul S. Bennett (Secretary) Charles J. Friedl (Treasurer) Brenda H. Johnson
Kristie Martin-Wallace Clive C. Pettis, Sr. Sarah W. Sanders William T. White Frank F. Rennie (General Counsel) Christine Marston (Minute Taker)
STAFF: Bradley V. Furr, VP of Operations George A. Felts, VP of Engineering
Jason Loehr, VP of Finance & Corporate Services Jean H. Morris, VP of Human Resources Ronald O. White, VP of Member & Public Relations GUEST: Jacob McCann, Director of HR
Joshua Wells, Director of Technical Services Jonny Hester, Supervisor of Operations Services
Dr. Frank Bacon presided, and Jacob McCann gave the invocation.
PREVIOUS MINUTES On motion made and seconded:
The Minutes of the September 17, 2019 Board Meeting, 2019 Annual Meeting and 2019 Reorganizational Meeting are approved.
MOTION CARRIED ODEC REPORT
The ODEC report was given by Earl Currin.
PRESIDENT/CEO’S REPORT 1. The SEC Financial and Statistical report for September 2019 was reviewed and
is attached to and made a part of the Minutes.
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2. Capital Credit retirements will begin in the latter part of November to the first part of December 2019.
3. The Board was provided information regarding cybersecurity events during the month of September 2019.
4. The Institute of Electrical & Electronics Engineers (IEEE) outage data and safety report for September 2019 were reviewed in detail: IEEE Outage Data
a. System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI) were below historical values for the month.
b. Customer Average Interruption Duration Index (CAIDI) was above historical value for the month.
c. There were no power supply outages during the month. d. Dominion Power (DE) had one momentary supply outage during the
month at Evergreen substation due to an unidentified cause. e. There were no Major Event days in September. f. Weather remained calm throughout September with limited impact on the
system. g. Received a check from the Virginia Department of Emergency
Management as a partial reimbursement of expenses related to Hurricane Michael.
Safety Report a. There were no lost-time injuries in September. b. As of September 30th, employees have worked 518 days without a lost
time injury. 5. 2020 – 2022 Underground Locating Bid:
a. Bid was prepared and managed by SEC personnel b. A pre-bid meeting was held with five contractors c. Bid documents were provided with a 30-day Q&A period d. Bids were received on August 30th e. Bids were evaluated on historical number of marked/clear tickets for three
years f. United States Infrastructure Company (USIC) submitted the lowest bid at
$339,435 g. Locating expense will be presented in each annual budget for 2020 –
2022 based on this contract result
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6. Operations Update: a. New service activity was up 4.5% for the month. b. Outage activity (minutes) with major event days removed were in line with
historical data: Central – 69 Eastern – 27 Northern – 23 Western – 56
c. September outage causes were affected primarily by isolated thunderstorms producing damaging winds and lightning:
Trees 35% or 62 outages; YTD 1,508 outages Unknown 14% or 25 outages; YTD 236 outages Weather 13% or 22 outages; YTD 607 outages Animals 13% or 22 outages; YTD 204 outages Fault/Failure 11% or 19 outages; YTD 296 outages Public 9% or 16 outages; YTD 166 outages Maintenance/Planned 5% or 8 outages; YTD 90 outages Other <0.1% or 1 outage; YTD 5 outages Decay/Age 0% or 0 outages; YTD 82 outages Power Supply 0% or 0 outages; YTD 7 outages
d. Tree related outages from 2014 through September year-to-date with Major Event Days:
e. Outages by District: Central 14% (69 outages affecting 1,826 members) Eastern 4% (27 outages affecting 933 members) Northern 7% (23 outages affecting 341 members) Western 11% (56 outages affecting 2,503 members)
f. September SAIDI switching savings: Realized 10.2 minutes (92%) Saved by automation (SCADA) switching 0.9 minutes (8%) Saved by manual switching 0.0 minutes (0%)
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g. SAIDI per District: Central 4.20 minutes in September; YTD 75.4 minutes Eastern 1.41 minutes in September; YTD 46.8 minutes Northern 0.58 minutes in September; YTD 21.0 minutes Western 4.05 minutes in September; YTD 92.1 minutes
h. SAIFI per District: Central 0.026 events in September; YTD 0.63 events Eastern 0.014 events in September; YTD 0.38 events Northern 0.006 events in September; YTD 0.28 events Western 0.035 events in September; YTD 0.67 events
i. CAIDI per District: Central 164 minutes in September Eastern 104 minutes in September Northern 99 minutes in September Western 117 minutes in September
7. SEC Fleet Assessment: a. Fleet history:
Penske began working in November 2018 Expectations:
- Three full-time mechanics - Structured schedule - Discount on parts, up to 10% - Fleet insight portal
b. SEC reorganization with fleet management under Jonny Hester in August 2019
c. Findings: 46 vehicles with expired registrations (30 January or older) 6 vehicles not specified on insurance Penske issues:
- No schedule - No access or reporting from SEC
Sales Tax paid twice for new service buckets ($24,000) Fueling issues (using retired units)
d. Penske moving forward: Structured schedule Weekly update calls Fleet insight portal training
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e. 10-year vehicle replacement considerations: Age Mileage Hours Maintenance costs Penske reporting
f. 2020 budget fleet replacement will be made upon Penske recommendation, district operation supervisors, employee input and manufacturer diversification.
g. Fixed cost assumption adjustments: Projected Actual
1.3% inflation for Penske labor 1.5% inflation for Penske labor Reducing subcontractor labor
by 66% Reduced subcontractor labor
by 22% Linemen labor decreased to
0% using Penske Linemen labor increased 16%
using Penske Penske fixed cost at $32,600
per month Penske fixed cost $33.463.90
per month
h. An adjustment of $5,800 per month has been added to fleet maintenance cost
i. Subcontractor labor has increased due to: Penske’s inability to perform repairs on aerial booms Penske’s unfamiliarity of trenchers Towing for western district repairs
j. Penske’s monthly expense in March and June were elevated due to clerical errors, linemen labor and subcontractor costs.
k. Annual fleet expense is up slightly YTD $849,143.03 as compared to 2018 year end $887,166.29
8. Annual Meeting Review: a. Successful event b. Total proxies received: 1,824 c. Members registered by 10:30 a.m. cut-off: 640 d. Additional members registered before to noon: 90 e. Total Members registered: 730 f. Health Fair: 690 g. Flu Shots: 148 h. Barbecued chicken lunches distributed: 2,600
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9. Southside Opportunity Fund (SOF) Skeet & Trap Shoot: a. Held October 4, 2019 b. 9 teams c. 39 sponsors d. 34 prize donors e. Expected to net $14,200 for scholarships f. 2020 shoot set for Friday, October 9th
10. 2019 Truckers Parade Against Cancer: a. Held October 12th at Randolph-Henry High/Central Middle Schools in
Charlotte Court House b. SEC was a t-shirt sponsor c. Three SEC trucks participated in the parade d. Event raised almost $1.1 million for the American Cancer Society
11. 2020 Almanac calendars will be available in November 2019 for distribution 12. SEC Christmas Banquet scheduled for December 6th with SOF Silent Auction 13. Town of Blackstone meeting at the Cooperative on October 16th:
a. Blackstone officials contacted the State Corporation Commission (SCC) regarding providing power to property located in the town but served by SEC
b. SCC contacted the Cooperative and requested that a meeting be scheduled with town officials to discuss possible solutions
c. SEC’s Terms & Conditions will be used regarding line extensions d. Blackstone has requested that SEC sell power to them and allow them to
serve the property e. Secondary power supply is not an option as the Cooperative has already
used is 5% contract option with ODEC f. Discussed other technology that could possibly be used to reduce costs;
i.e. phase converters g. Member would have to purchase and manage phase converters h. The member would be required to tender a load letter in order for SEC to
provide any options/estimates i. Once the load letter is received the Cooperative will develop what the
energy consumption and demand will be to cover the cost of supply energy
14. Center Star Transmission Project: a. SEC will abandon the transmission project
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b. Easements obtained will be held on to for future use; $620,000 invested in easements
c. Expenses of $700,000 will be written off d. Delivery will be moved back to the 35kV Dominion Energy delivery point
NEW BUSINESS 1. 2020 Health Insurance Program renewal:
a. Anthem renewal decreased 5.0% for medical premiums and 3.9% in total costs for the three parts (medical, HSA & HRA).
b. Employee premium cost-sharing will remain in effect: Employees requesting Healthkeepers
- SEC will pay 95% of family premium - Employee will pay 5% of family premium
Employees requesting Keycare will need to pay the difference for the buy up
c. HSA with employer contribution: $1,750 for single $3,000 for family
d. HRA will be funded on the back end, only when an employee exceeds deductibles (15% utilization rates).
e. Total projected cost (health insurance, HSA & HRA) is $2.1 million; a 3.9% or $83,000 decrease in total costs.
f. Proposed addition to the Cooperatives 2020 benefit package: LifeLock Identity Alert System monitors for fraudulent use of
employee’s personal information in applications for credit and services
Checking and savings account monitoring and alerts 401K and investment account activity alerts Credit reports and monitoring Access to Norton security features (computer/device protection)
g. Approximate cost for identity theft coverage funded by SEC is $10,514 ($6.49 per employee per month)
On motion made and seconded: The health plan benefits will be renewed through Optima with the addition of LifeLock Identity Theft protection as presented.
MOTION CARRIED 2. The Affirmative Action Program (AAP):
a. As a federal contractor, SEC is subject to the nondiscrimination and affirmative action obligations of Executive Order 11246, as amended;
General FundCash in Banks 7,825,740.07
General Funds Invested CFC - CTC's 2,115,131.78 CFC - Patronage Capital 2,949,022.91 Federated Insurance Corporation 461,679.00 TEC Trading Incorporated 622,500.00 Town of Hurt 1,000.00
Notes and Accounts Receivable Electric Consumer 8,346,077.16 Other Accounts Receivable 7,540,221.11
29,861,372.03 Material and Supplies in Stock 1,985,116.37
Construction Work in Progress to be Paid from Construction Funds 0.00
TOTAL 31,846,488.40
Construction Funds Available First Citizens Bank 0.00
0.00 0.00 0.00 0.00 0.0017. Interest Charged to Construction - Credit17,856.37 32,670.59 20,250.00 3,674.65 2,250.0018. Interest Expense - Other62,493.34 169,911.63 56,250.00 9,008.17 6,250.0019. Other Deductions
85,821,786.32 93,314,138.51 93,488,243.06 9,707,702.58 9,579,505.5320. Total Cost of Electric Service (12 thru 19)
4,970,309.96 1,455,346.86 -38,700.76 187,097.50 -626,673.1521. Patronage Capital & Operating Margins (1 minus 20)96,732.11 102,082.78 94,275.00 10,679.16 10,475.0022. Non Operating Margins - Interest
0.00 0.00 0.00 0.00 0.0023. Allowance for Funds Used During Construction0.00 0.00 0.00 0.00 0.0024. Income (Loss) from Equity Investments
-7,124.24 -8,293.40 -8,249.94 -1,476.24 -916.6625. Non Operating Margins - Other540,000.00 532,573.97 524,999.97 58,333.33 58,333.3326. Generation and Transmission Capital Credits669,664.82 597,958.27 595,000.00 277,252.20 250,000.0027. Other Capital Credits and Patronage Dividends
0.00 0.00 0.00 0.00 0.0028. Extraordinary Items6,269,582.65 2,679,668.48 1,167,324.27 531,885.95 -308,781.4829. Patronage Capital or Margins (21 thru 28)
Cash flows provided by operating activities 10,088,404 14,155,945
Cash flows from investing activities
Investment in electric plant,net (5,025,622) (7,554,894)
Installment loans issued (1,292,014) (981,707)
Proceeds from retirement of CTC's 19,642 18,383
Cash flows used in investing activities (6,297,994) (8,518,218)
Cash flows from financing activities
Payments on lines of credit ‐ (12,000,000)
Proceeds from long term debt ‐ 12,900,000
Principal payments on long term debt (6,797,915) (6,819,977)
Capital credits paid to members, net (475,017) (443,619)
Proceeds from capital credits 331,032 1,983,248
Deposits collected from customers 66,005 25,988
Net change in memberships 1,145 875
Cash flows (used) provided by financing activities (6,874,750) (4,353,485)
Net change in cash (3,084,340) 1,284,242
Cash at December 31, 2018 and 2017 10,910,081 4,360,481
Cash at September 30, 2019 and 2018 7,825,741$ 5,644,723$
No. Receiving Service
a.
No. Minimum Bills d.
Avg. No. Receiving Service
e.
kWh Sold Cumulative
f.
Amount Cumulative
g.1. Residential Sales (excl seas.) 54,537 16 54,369 589,511,759 79,769,9132. Residential Sales Seasonal3. Irrigation Sales4. Comm. & Ind 1000 KVA or Less 1,969 11 1,964 43,634,992 5,313,7815. Comm. & Ind Over 1000 KVA 16 0 17 59,076,044 4,561,4176. Public St. & Highway Lighting7. Other Sales to Public Authority 409 0 402 40,890,148 4,259,6638. Sales for Resale - REA Borr.9. Sales for Resale - Other
10.
(1 thru 9) 56,931 27 56,752 733,112,943 93,904,77511. Other Electric Revenue xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 864,71012. Total (10 + 11) xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 94,769,485