A Moment with the CEO

BY SUZANNE LANE

Year in Review

“The comeback is always stronger than the setback.” This is a quote that has resonated with me this year more than ever, as the disruption that COVID-19 has brought to 2020 has been the epitome of a “setback” or challenge. However, the strength of the “comebacks” or successes captures the spirit, sense of community, resiliency, and dedication that is the very definition of a cooperative…and specifically, your generation and transmission cooperative.

First and foremost, on behalf of and in service to our Members, we have accomplished a great deal in the past 12 months:

• We finished 2019 with the lowest average member rate since 2010, financially strong, meeting our debt covenants/lender requirements, and allocating about $2.8 million in capital credits;
• We successfully amended and implemented member-driven revisions to our tariff and our load management program;
• For the first time in over 20 years, we were able to retire about $700,000 in capital credits, which provided timely assistance to our Members during the pandemic;
• To assure the most professional, member-focused, cost-effective legal representation for our Members, we changed FERC legal counsel for the first time in over 25 years;
• We supported our Members’ additional distributed generation projects by providing guidance, process enhancements, technical assistance, and policy and practice revisions;
• We advocated for our Members in legislative and Congressional fronts, with key components involving the Senate Bill 69 study and the need for RUS debt refinancing. These proud advocacy efforts also earned us status as a 5-Star Co-op by NRECA;
• We completed KEPCo’s first all-inclusive risk identification and assessment process, which paves the way for a robust, crucial risk management policy;
• We entered a new, cost-reducing power purchase agreement with Evergy for the years 2021-26;
• Our owned and purchased resources continued to operate very reliably, safely, and cost-effectively, and we were heavily engaged in their operations;
• We fulfilled our Sharpe Generating Station obligations with many all-hours, lengthy operations;
• We entered a partnership regarding a new transmission project and ownership opportunity;
• We continued our advocacy and engagement at the Southwest Power Pool, Southwestern Power Resources Association, and Loveland Area Customer Association;
• We were a key player in a transmission settlement case at the Federal Energy Regulatory Commission (FERC), collaboratively reaching a result that was in the best interest of our Members, and we are currently engaged in another issue at FERC that we believe will result in significant savings for our Members; and
• We facilitated our first member survey, receiving meaningful feedback that will help us grow and assure we are providing our Members with the best service and experience possible.

None of these accomplishments would have been possible without the hard work of our team and the support of our Board!

As for setbacks or challenges – let’s re-title those as “new adventures” – there were plenty of things that occurred that no one could have predicted, planned for, or trained for as just a couple months into 2020, a historic, unprecedented, distressing, divisive, anxiety-inducing pandemic hit our country, state, counties, and towns.

• With little notice, our worlds changed in the business and personal settings, with new terms like “social distancing,” “mask mandates,” “mass gathering limits,” and “hybrid learning” becoming mainstream and our 24/7 focus.
• For the first time in its 45+ year history, KEPCo’s entire team worked from home at various times and stages, all the while successfully taking care of the needs of our Members.
• KEPCo Board meetings were held by teleconference – again, something we never thought we would need to do on a recurring basis.
• Employees, Members, and families were stressed with things like childcare, the health and safety of elderly family members, and even where the next roll of toilet paper would come from.
• All along, your G&T team did our very best to work safely, efficiently, and effectively, all while assuring your costs and reliability remained top of mind.
• As we said often, “not even a 100-year pandemic can slow us down,” “KEPCo strong,” and “Team KEPCo.” Our mantra for 2020 has been “tough times don’t last, tough teams do,” which we demonstrated each and every day.

And last but not least, your KEPCo team had quite a year of successes and new adventures as well:

• Every employee had a new, customized goal plan that assured we were all in-line with the strategic plan and focus areas desired by our Members;
• We proposed and received approval from the Board to have a new purpose statement and guiding principles;
• We remained engaged and connected by having a multitude of employee events, even converting those into virtual events like music trivia, bingo, “fashion Fridays,” and virtual yoga sessions;
• We established KEPCo’s first Safety Committee, who led the effort to completely revamp our Safety Manual;
• We completed our first employee survey, learning how we can provide our employees with the best experience possible;
• We had two retirements, and welcomed three new employees to our team;
• We supported each other through challenging health issues, new babies, marriages, and graduations;
• KSI is fully staffed and cranking out work on behalf of the members who utilize these engineering services;
• We supported our communities by volunteering for organizations and contributing over $27,000 (including CoBank’s matching funds) to local charities;
• We enhanced our cyber security with additional monitoring services and participating in NRECA’s RC3 program;
• We completed 2019 with a stellar safety/cyber record, and are on-track to finishing 2020 strong overall in this regard too;
• We held our first supervisors’ summit to assure all of our front-line supervisors have the support and tools they need to lead successfully; and
• On a personal note, we had the joy of working closely with our outgoing Board President, Dale Short, who offered the most tremendous support, honest feedback, genuine concern, and strong leadership to KEPCo; we wish him the very best as he prepares to enter the chapter of retirement.

So once again, over the past 12 months, while we have had our “new adventures” or setbacks, it’s the successes or comebacks that make us stronger and demonstrate our strength. We are honored and blessed to be part of this amazing cooperative family, and to serve each and every one of you, your staffs, and your members.

Thank you to the entire Board of Trustees for your support and dedication to KEPCo, and to our team, thank you for doing all that you do each and every day to serve our Members. Here’s to a safe, healthy, blessed 2021!

Generating Safety

Electrical Issues Cause 1 out of 4 Christmas Tree Fires

BY DERRIL HOLLY, NRECA

The holiday season offers great moments for building memories, but when it comes to decorating, it’s also the perfect time to think about safety.

“There are about 200 decorating-related injuries each day during the busy holiday season,” said Ann Marie Buerkle, acting chairman of the Consumer Product Safety Commission. “Make safety a part of your family’s holiday decorating this year.”

Between November 2016 and January 2017, holiday decorating injuries resulted in 18,400 emergency room visits, nationwide. Local fire departments look to the holiday season as a time of increased vigilance, often tied to many of the activities that have become family traditions.

“It’s important to use common sense when you’re dealing with holiday decorating, particularly with lighting, candles and electrical wiring,” said Bruce Bouch, a U.S. Fire Administration fire program specialist. “Holiday decorations are designed for temporary use, and that means they are essentially disposable.”

According to the National Fire Protection Association, the top three days of the year for candle fires in the U.S. are Christmas Eve, Christmas Day and New Year’s Day. NFPA statistics also indicate that one of four Christmas tree fires are caused by electrical problems.

The global safety certification company, United Laboratories, classifies holiday lighting as a seasonal product designed for no more than 90 days of use. While the actual holiday season is about six weeks, weather and busy schedules mean outdoor lighting displays are put up early and taken down late, exposed to the elements the entire time.

“It’s always important to inspect holiday lights each year before you put them up,” said Bouch. “You may find that there are pinches or torn areas on the insulation.”

Open, exposed wiring or any signs of fraying or pinching are indications of weakened wiring. Those flaws are prone to breakage and may raise the potential for heat buildup, which can cause a fire.

Bouch recommends a thorough inspection of your holiday lights to identify potential hotspots and damage to the strings.

“When you’re checking everything on the wiring and fixtures, make sure you check for chewing damage from wild animals or your own pets,” adds Bouch. “Also look for signs that the insulation itself is wearing thin enough to expose wiring.”

The U.S. Fire Administration, the CPSC and safety organizations also focus on reminding consumers that indoor and outdoor extension cords are also designed for temporary use.

“Your household wiring is a solid metal wire,” said Bouch. “Extension cords are strands of your thin wires that are twisted together. That pliability can allow them to break over time, increasing the chance that they could fail within so many years.”

Experts also warn that candle use increases the risk of accidental fires, and suggests that consumers consider battery-operated LED candles as safer alternatives. According to NFPA, candles start two out of every five home fires each year, and about 100 Christmas tree fires occur each holiday season, causing about $12 million in damage annually.

You can reduce the risks by placing your Christmas tree away from heat sources, like vents or space heaters, and topping off the water reservoir daily.

Kansas’ electric cooperatives join local firefighters, the NFPA and the CPSC in urging you to consider safety as you decorate and enjoy the holiday season with family and friends. KCL

Derrill Holly writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association.

KEPCo Holds Virtual 46th Annual Meeting

Due to the continued prevalence of the COVID-19 virus, the November Board of Trustees meeting and the 46th KEPCo Annual Meeting were held virtually this year.

At the November meeting, new KEPCo officers and Executive Committee members were elected. The KEPCo Board of Trustees elected Doug Jackson, President (Rolling Hills), Steve Foss, Vice President (FreeState), Larry Froese, Secretary (Ark Valley), and Bryan Coover, Treasurer (Twin Valley). Elected to the Executive Committee were Chuck Goeckel (Flint Hills), Mike Morton (Bluestem), and Kirk Thompson (CMS).

Dale Short (Butler), KEPCo president since 2018, announced his retirement effective February 2021 and, as such, did not seek re-election. “It has been an honor and privilege working with Dale the past two years. From KEPCo and the Board of Trustees, thank you, Dale, for your decades of service to the cooperative family and to KEPCo. We wish you a long and healthy retirement,” said Suzanne Lane, KEPCo Executive Vice President & CEO.

Newly elected KEPCo President Doug Jackson thanked the board for their support and confidence in him stating, “With all of us working together, KEPCo will continue to be successful.” Jackson added, “And many thanks to Dale Short for your years of service and guidance to KEPCo. It has been a privilege working with you.”

The KEPCo Annual Meeting followed the board meeting at which Suzanne Lane reviewed a host of accomplishments during 2020, including retiring $700,000 in capital credits, completing a risk identification and assessment process, entering into a new, cost-reducing power purchase agreement with Evergy for the years 2021-26, and successfully amending and implementing revisions to KEPCo’s tariff and load management program, to name a few.

KEPCo Restates Mission and Vision Statements

At the KEPCo Board of Trustees meeting in October, the Board approved important enhancements to KEPCo’s long-standing mission and vision statements. A strong, meaningful, accurate mission and vision are key to an organization’s success and KEPCo has been very successful following mission and vision statements that were established over 15 years ago. Over the past couple of months, the KEPCo Board of Trustees and staff have collaborated to develop a new purpose statement and supporting guiding principles that align with the organization’s strategic initiatives, goals, and the overall vision of leadership.

KEPCo EVP & CEO Suzanne Lane said, “We are very appreciative of the Board’s support and approval of these key statements, which focus on the aspects that drive and define us: our Members, our employees, safety, reliability, and cost-effectiveness.” Lane added, “These statements will provide guidance to the Board and staff for years to come.”

PURPOSE STATEMENT:

KEPCo strives for excellence in providing safe, reliable, economical, and environmentally responsible power supply, exceptional support, and innovative services to our Members and the Kansans they serve.

GUIDING PRINCIPLES:

Safety: We are devoted to a culture of safety to assure an accident-free, secure, and healthy work environment.

Innovation: We promote continuous learning, development, and creative thinking to encourage innovative, proactive, cost-effective, and technologically relevant business and energy solutions.

Engagement: We strive to provide a positive, professional, and respectful work environment for our employees and Members, and we are committed to building relationships based on genuine caring and understanding.

Integrity: We expect our team to be completely transparent, open to new ideas, honest, trustworthy, fully accountable, ethical, and to do the right thing for our Members, our industry partners, the general public, and each other.

Financial Responsibility: We strive to provide power supply, support, and services to our Members at the lowest possible cost, consistent with sound business practices, Board policies, and cooperative principles.

Sharpe Generating Station Provides Congestion Relief

The Southwest Power Pool, Inc. (SPP) dispatches generation across its 17-state footprint to meet the load requirements in real time at the lowest possible cost while also maintaining system reliability. Predominantly during the spring and fall, particularly at night, when the load is down and renewable energy production (wind) is high, transmission congestion can occur. Similar to a traffic jam, in times of transmission congestion, actions are taken by SPP to relieve or reduce the impacts of the congestion. 

Several actions are being taken to reduce transmission congestion in this area. Wolf Creek has begun to make itself available for flexible operations, thus reducing production during times of low load or high wind production. Wolf Creek is also planning some switch yard improvements in 2022 and 2023. In addition, the new Wolf Creek to Blackberry 345 kV transmission line is scheduled be in service in 2026. All of these actions are expected to reduce congestion on area transmission facilities. Until then, KEPCo’s Sharpe Generating Station will continue to be a valuable asset to KEPCo and the SPP as a tool to reduce area transmission congestion and ensure system reliability.

Get to Know KEPCo Employees

KEPCo Cybersecurity Audit

Cybersecurity is an area that receives a great deal of attention in the electric utility industry. KEPCo’s cybersecurity programs provide for protection, education, and evaluation by deploying active and passive measures to protect its cyber assets. Staff and board members receive regular training and education on emerging threats and protections, as well as regular testing and assessments to guide future education and to re-enforce training goals. 

KEPCo Donates to Local Charities

Through KEPCo’s Charitable Giving Program, KEPCo staff donated nearly $16,000 to local charities for 2021. The charities chosen by KEPCo staff are TARC, Topeka Rescue Mission, Ronald McDonald House, CASA, Harvesters, and the Salvation Army. These charities provide valuable services in our local communities and KEPCo staff is proud to support their efforts.

Kansas Election Recap

The commercials have ended, the yard signs are gone, and mailboxes are a little less cluttered. With the elections over, let’s look at how the statehouse shapes up for the 2021 session.

Leadership in the House remains the same as last session. Rep. Ron Ryckman, Jr. (Olathe) was re-elected Speaker of the House, Rep. Blaine Finch (Ottawa) was re-elected Speaker Pro-Tem, Rep. Dan Hawkins (Wichita) was re-elected Majority Leader, and Rep. Tom Sawyer (Wichita) was re-elected Minority Leader.

The Senate Utilities Committee will have several new members, including the chairman (formerly held by Sen. Ty Masterson), as six Senators will need to be appointed to the eleven-member committee. The House Utilities Committee will have a few new members, but leadership in the committee likely will remain the same as last session. Committee appointments will be made later.

The Republicans have retained a supermajority in both chambers, which will enable overrides of governor vetoes.

Expected energy-related bills for the 2021 session include a securitization bill and an energy efficiency bill, both to be introduced by Evergy. Potential bills include distributed generation changes, third party-owned electric vehicle charging stations, generation fuel choice by cities, state energy plan, and bill(s) resulting from the Sub. for Sen. Bill No. 69 retail rate study that is scheduled to be presented to the legislature in early January.

“2021 is shaping-up to be an interesting and challenging year at the statehouse. KEPCo is looking forward to working with our fellow cooperatives and other utilities on the important issues to be debated,” said Susan Cunningham, SVP, Regulatory & Government Affairs & General Counsel.

KEPCo’s Member Cooperatives Join Forces on Solar Project

Utility scale solar is a cost-effective way to provide members of a cooperative with year-round renewable energy and reduce peak demand during the summer months. Recently, 12 KEPCo member cooperatives banded together to provide their members with solar energy, under the newly created banner of the Kansas Cooperative Sun Power Program. 

The solar farms will be 20MW in aggregate and will span more than 800 miles across rural Kansas. A number of the projects are scheduled to be completed and in service for the 2021 peak season, with the remainder to be completed in 2022.

KEPCo Submits REDLG Application

KEPCo submitted a $480,000 Rural Economic Development Loan and Grant program application for a project in the Heartland service territory. If selected, the project will save eight current jobs, add approximately five new positions, and keep a valued business in the community.

Victory and Prairie Land End Membership

Effective January 1, 2021, Victory and Prairie Land will end their membership in KEPCo. Victory and Prairie Land became members of KEPCo in 1977 and 1978, respectively, and in 2005, notified KEPCo of their decision to not renew their memberships, which expire at the end of this year. Victory and Prairie Land are also members of Sunflower Electric Power Corporation and will receive all their energy requirements from Sunflower starting in 2021. 

On behalf of KEPCo and the Board of Trustees, thank you to both cooperatives, their managers, trustees, and staff for supporting and contributing to KEPCo for over four decades.

Settlement Reached in Sunflower Merger Docket at FERC

In November 2020, regional transmission organization Southwest Power Pool, Inc. (SPP) filed a proposed transmission rate settlement with the Federal Energy Regulatory Commission (FERC) on behalf of Sunflower Electric Power Corporation (Sunflower). The proposed settlement resolves all issues concerning Sunflower’s proposed changes to its transmission formula rate and its protocols implementing the transmission formula rate, related to the merger of Mid-Kansas Electric Company, Inc. (Mid-Kansas) and Sunflower. Although an interim order approving the settlement was issued in November 2020, the matter will need to be considered and approved in a final order by FERC. KEPCo was an active participant in the case. 

Sunflower’s transmission formula rate and protocols are part of the SPP tariff and, therefore, subject to federal regulatory oversight. Because the proposed changes raised issues of material fact that could not be resolved on the existing record, FERC set the proposed changes for hearing and settlement judge procedures. 

The settlement negotiated by Sunflower, Kansas intervenors (including KEPCo), and FERC staff was filed in November 2020 and is expected to reduce Sunflower’s annual transmission revenue requirement from $78.17 million to $72.36 – about $6 million or 7.4% for the 2020 rate year. The settlement further provides for the new, reduced rates to go into effect in December 2020, and an accelerated refund process. The refund process allows for transmission customers like KEPCo to be refunded before FERC issues its order on the settlement. The refunds due are the difference between transmission charges calculated under the proposed transmission formula rate and the settlement transmission formula rate for the January to November 2020 period. The settlement also includes revised protocols that will benefit transmission customers and provide greater transparency and an expanded process for review of inputs to the annual transmission rates and true-ups of prior period rates.