Sue McWilliams and Jerry Fetterman were returned to their seats on Empire Electric Associations’ board of directors at the June 20 meeting, and two amendments to the organizations bylaws were passed in member voting.

In Director District 1, Fetterman earned 1,324 votes to Brett Peterson’s 634. In District 2, McWilliams had 998, Jerrie Koskie was second at 667, and John Hernandez had 277.

Amendment 1, abolishing term limits for directors, was approved by a margin of 1,014 to 928. Amendment 2, disposition of property, was approved 1,454 to 422.

Seventy-nine members and their families attended the meeting in Cortez. All 79 members received a $10 credit on their electric bill for registering.

President Bill Bauer shared highlights from the annual report, including financials and capital credit refunds. He reported that electric rates went up in 2012 to keep up with increasing costs. Bauer briefly discussed the success of the refrigerator recycling program, renewable energy mandates, the cooperative’s 99.98 percent reliability, and future rate increases from Tri-State Generation and Transmission Association.

Secretary/Treasurer Jerry Fetterman reported on the solid financial performance of the cooperative, highlighting key ratios. A general rate increase of 6.3 percent on Jan. 1, 2012, the first rate increase since 2009, was necessitated by a 4.8 percent increase in the cost of purchased power.

Attorney Shay Denning reported on the complaint against Tri-State Generation and Transmission Association’s 2013 rate structure change that removes a demand component previously offered to its customers. Empire’s board joined a group filing a complaint with the Public Utilities Commission to address this issue.

General Manager Neal Stephens reported that following positive feedback after the 2012 annual meeting, the board will continue to minimize expenses for the annual meeting. Included in the cost-cutting changes are minimal advertising, decreasing the annual report size, holding the meeting at Empire’s headquarters, providing refreshments versus a full meal, offering a $10 credit to attending members in lieu of door prizes and registration gifts, and by providing a business-only meeting.

Empire contracted with Survey & Ballot Systems Inc., a firm specializing in cooperative voting. It provides voting services that are less expensive than in-house options. In addition, they provide the membership with a good governance practice, a verifiable nonbiased election process, accurate and certified election results including the mailing of election material to active members.

Manager Stephens commented on the 2012 year-end report:

Construction commenced on the Engineering & Operations Center located at 23999 Road L.4.

Empire’s Totten Lake Property is for sale to offset the cost of purchasing the property for the E & O Center.

Empire moved to an electric rate structure that tracks the actual cost to provide electric service. Cost based rates are designed to reflect the actual cost of providing electricity to the member. Stephens shared several examples of written communication with members providing feedback on the rate restructuring. .

2013 issues:

Empire opposed Colorado Senate Bill 252, signed by Gov. Hickenlooper on June 5, 2013. The bill is designed to double the amount of rural renewable energy that cooperatives are mandated to purchase, requiring Tri-State to provide Empire with 20 percent renewable energy by 2020. Former member survey results directed the board to stay the course with the prior 10 percent mandate. Electricity bills could go up as a consequence at least 2 percent per year for the next seven years, which amounts to a compounded increase of about 14.9 percent which will be on top of other increases from Tri-State and from Empire.

New load-growth projections by Empire’s carbon dioxide extraction customer have doubled from projections made 30 years ago. This impacts the staff that has to roll this growth into our long range projections, and it impacts Tri-State, which has to accelerate generation development and transmission plans to get power to Empire’s service territory.

Stephens recognized the professionalism of the board of directors as members collectively work for members and make decisions in the best interest of the cooperative.

Other issues being worked on:

Identifying and implementing improvements to the cooperative’s culture of safety.

Continuing refinement of Financial and Customer Information Systems to identify and implement efficiencies in the way we do business, including on-line bill payment, which is scheduled to be offered to Empire’s members as soon as Aug. 1, 2013.

Exploring the benefits of Internet voting if and when it is permitted by law.

Ongoing work associated with the 115 kV high-voltage asset transfer to Tri-State.

Developing strategies for the disposition of the old warehouse and associated facilities, adapting at the headquarters facility due to the departure of the Engineering and Operations personnel.

Relationship with Tri-State Generation and Transmission:

Empire’s ability to provide customers with 99.98 percent reliable power in 2012 is directly proportional to Tri-State’s ability to generate power and transmit it to Empire’s system.

Reliability is not cheap. Seventy-seven percent of Empire’s costs relate to electricity purchased from Tri-State.

Jim Spiers, Tri-State’s senior vice president of business strategy and chief technology officer, discussed the importance of the partnership between Empire and Tri-State. Spiers stressed what the cooperatives have in common, like increasing rate pressure and the increasing regulatory compliance issues.

Member questions and comments followed.

For more information, call Empire at (970) 565-4444 log on to www.eea.coop.