CEO Report

Lighting The Future

Posted on Aug 21 2020 in Steuben County REMC

Typically in this report I would discuss the previous year’s activities and share the cooperative’s future direction. However, as we have heard on way too many occasions, these are not ordinary times. To understand the cooperative’s current position, we really need to talk about 2019 and the first half of 2020 in the same breath. The contrast between the two are as drastic as night and day. As you can imagine, the effects the two periods have had on our members and the cooperative are dramatically different. 

In 2019, our local economy was strong and growing. New housing starts remained steady, local businesses were vibrant, and, in some cases, planning to grow. In fact, Pine Manor and Res PolyFlow (BrightMark Energy) had already begun their respective expansions and, to meet their increased loads, we were well on our way with the engineering of new substations for each location. Our year-end financials were strong with nearly $342,000 of margins coming from the cooperative operation and the remaining $690,000 coming from our wholesale power provider, Wabash Valley Power Alliance.

We were also assessing the importance broadband internet service will have on our members’ lives in the future; and how we could help bridge the current information gap between urban and rural America. For the most part, things were going well and Steuben County REMC’s goal of helping to improve the lives of our members and being a light for the future was on pace. 

Then in February 2020, we heard the term “COVID-19” for the first time. In the beginning, it was just a trickle but by March, it became a torrid out-of-control river of conflicting information and bad news. Our world was changing almost daily and by the time some of the dust had settled, we were all left searching for a new normal way of life. Our economy was all but shut down, businesses were closed, unemployment was sky rocketing, schools and events like our annual meeting were canceled, and our kids struggled to complete the year’s educational requirements. These outcomes occurred because the infrastructure needed did not exist or was not capable of handling the new demand

Financially, we all began to feel the pandemic’s effects. At your cooperative, these setbacks seemed to come in waves. The first was drastically reduced commercial and industrial sales. Our second wave came with a rise in accounts receivable since many of our members had difficulty paying on time due to a lack of employment and steady income. So, to help, your cooperative suspended collections and all penalties during our state’s economic shutdown. Today, as we have done throughout our history, we are dedicated to working with our members to resolve these types of issues. Please feel free to contact us if the need arises. 

In addition to this financial step, your cooperative also worked with our wholesale power provider to pull forward and ultimately double the amount of capital credits we were able to retire. Initially your cooperative planned to retire $230,500 this past spring, which represented part of our 2008/2009 patronage. However, given the economic crisis many of our members faced, the boards at both Wabash Valley Power and Steuben County REMC felt including next year’s retirement of $234,000 would be appreciated.. All together, we were able to retire $464,000 of G&T patronage, which was about the same amount of REMC patronage returned in December 2019. 

In spite of these hardships, your cooperative has continued to meet our obligation and commitments to our membership including our work on the substation at Pine Manor and Res PolyFlow (BrightMark Energy). These necessary additions to our plant will be a key component to our region’s economic recovery and future economic development.  

Another area we have not lost sight of was something I alluded to earlier: our area’s broadband internet availability. Last year in my report, I outlined how important this type of infrastructure would be to our future development and how it will reshape the way we live. During the height of the COVID-19 crisis, these concerns became even more apparent when, because of the stay-at-home orders, some members struggled to work from home alongside their children, who were trying to complete online classes online. The current system was overloaded in many locations and in some areas, there was no service at all. Having a dependable fiber optic system appears to be the only long-term option to meet not only our current needs, but those needs imagined and yet to be imagined well into the future.    

To that end, your cooperative is exploring a number of options, partnerships, and acquisitions to help make this dream a reality. In the next few months, I hope we can announce some major developments in this area. 

We all know how difficult things are right now, but we are resilient. Together, we can overcome adversity. We have done it before when our forefathers formed Steuben County REMC to improve the hardships of rural life. Together, through your cooperative, we can and will light the future again.