A Moment with the CEO

BY SUZANNE LANE

In November, KEPCo held its 48th annual meeting of the G&T cooperative. During the business meeting, I provided a “presentation of reports”—or a “state of the cooperative” address. This year in review, being the 5th such address I have had the privilege of giving as KEPCo’s leader, differed from years’ past in that we have experienced new and unique challenges over the past 12 months, but it was similar to other reviews in that we once again were blessed to work through our hurdles together as a cooperative family. This past year brought many changes and challenges to our industry. While previously used to describe the pandemic, words like “unprecedented,” “historical,” and “surreal” can now be used to describe the pace of change we are seeing in the electric utility industry. Electric vehicles, battery storage, carbon reduction, resource aggregation, supply chain disruption, record-breaking heat, renewable resource deployment, high natural gas and energy prices, and unfathomable federal funding opportunities are key examples of topics that utilities are being forced to deal with all at once. In my almost 25 years in the industry, I’ve never seen anything like it, and I know many of the folks reading this article who have been in the industry even longer would agree.

While change should be encouraged, is often positive, and helps us evolve in order to serve the needs of the nearly 200,000 rural Kansans we proudly serve, finding the right pace for change is key. Affordability and reliability have to remain our top priorities. These priorities are being threatened by the many pressures and aggressive goals coming from special interest groups and policymakers, which is very concerning. One of the many threats to our priorities involves climate policy and specifically, carbon reduction. While KEPCo is already in a strong position when it comes to carbon—a position that so many utilities are striving for and/or feeling the pressure to strive for—cost and reliability will continue to be placed at risk for this G&T as other utilities in the region move this direction—especially if that transition is made too quickly.

In regard to affordability, cost pressures have been one of the biggest challenges for the electric utility industry this past year. Natural gas hit prices this past summer we haven’t seen in our region since 2008, and at times were more than double what they were in the summer of 2021. Likewise, SPP market energy prices were also more than double what they were a year ago. Timely, consistent coal delivery was challenged due to railroad labor shortages and the concern of a potential union strike. And all of these issues came at a time when our region experienced one of the longest, hottest summers in recent years. To add to the cost pressures for our members, electric industry supply chain disruptions have made it difficult to mitigate costs, serve new load, and in some cases, reliably continue to serve existing load. Inflation has driven prices at the gas pumps, grocery stores, and other essential goods and services through the roof. These cost pressures this past year have been felt by all of us—and all of our rural electric member-consumers.

So from a power supply perspective, how has this G&T cooperative mitigated cost pressures to the rural Kansans we serve? Our diverse power supply, flexible rate structure, regulatory successes, reliable resources, and load management efforts have allowed us to keep prices more stable than many utilities across the country. Even at a time when natural gas and energy prices were double what they were a year ago, KEPCo’s rates remained stable and only increased on average by 6-7% when comparing that same year-over-year period.

Rate stability and reliability constantly remain front-of-mind. With that focus in mind, highlights from the past year—both successes and challenges—include but are definitely not limited to the following:

• Safety:
  • We concluded 2021 with ZERO safety incidents and one cyber security incident.
  • We are on-track to end 2022 with ZERO safety and cyber security incidents.
• Power Supply:
  • We developed and implemented KEPCo’s first energy hedging policy, strategy, and product purchase.
  • Our owned resources—Wolf Creek, Iatan 2, Prairie Sky, and Sharp—remained overall reliable and provided continued value to our membership.
  • We successfully developed and issued a request for proposals for 50 MW of our power supply starting in 2027, finding capacity and energy at reasonable costs that will continue to assure rate stability for our members.
• Finances:
  • We ended 2021 with a solid net margin and strong equity-to-asset ratio and met our lender requirements, and we are on-track to do the same for 2022.
  • We also ended 2021 with a successful, profitable year for our for-profit engineering subsidiary, KEPCo Services, Inc., and are on-track to do the same for 2022.
• Regulatory/Advocacy:
  • In close partnership with our “extended family”—outside consultants—we remained engaged at FERC, resulting in significant savings for our membership—advocating for accuracy, appropriate accounting principles, and protocol adherence along the way.
  • We remained engaged at SPP, advocating for Members in areas involving reliability, cost allocation, distributed energy resources, energy storage, and the value of fuel diversity.
• Member Services:
  • We successfully facilitated the 2022 load management season, garnering significant savings for Members over the related 12-month period.
  • We developed and implemented KEPCo’s first energy emergency policy, incorporating the lessons learned during and after Winter Storm Uri.
• Team:
  • We persevered through a time of tremendous staffing turn-over, overcoming a period where we had more than 20% of our positions open at one time. Delightedly, 6 new team members joined KEPCo in the past few months, providing a full staff of dedicated and hard-working employees who bring the genuine service heart we strive to portray as a co-op serving other co-ops.
• Member Rates:
  • We continued to mitigate the cost impacts from Winter Storm Uri by amortizing the costs at a reasonable recovery rate to our members, typically resulting in fractions of a cent per kWh each month.
  • As mentioned, we maintained stable rates notwithstanding the increased costs referenced earlier, and we are on-track to end 2022 with an average member rate at or slightly below budget—a tremendous victory considering the rate pressures already mentioned.

None of these achievements would have been possible without the hard work of our staff, industry partners, and Board of Trustees. While many of the changes and challenges will continue to keep us on our toes in the coming year, working through those hurdles will be possible because of the dedication and cooperation among all who “bleed KEPCo.” I’m truly honored to be part of this cooperative family and most importantly, I’m honored to serve our Board, our entire membership, and our employees.

Thank you to the Board for your service this past year and thank you to our employee team for doing all that you do each and every day to serve our Members. Here’s to a bright 48th year, a joyful Christmas, and a safe, healthy 2023.

Generating Safety:

Snow Removal Safety Tips

• Stretch before you go out. If you go out to shovel snow, do a few stretching exercises to warm up your body. This may prevent injury.
• Cover your mouth. Protect your lungs from extremely cold air by covering your mouth when outdoors.
• Avoid overexertion. Cold weather puts an added strain on the heart. Unfamiliar exercise, such as shoveling snow or pushing a car, can bring on a heart attack or make other medical conditions worse. Take frequent rest breaks, and drink plenty of fluids to avoid dehydration.
• Keep dry. Change wet clothes frequently to prevent a loss of body heat. Wet clothing loses all of its insulating value and transmits heat rapidly.
• Stay safe. Walk carefully on snowy or icy sidewalks. If using a snowblower, NEVER use your hands to unclog the machine.
• Maintain an awareness of utilities when shoveling snow. Do not cover fire hydrants with snow when clearing sidewalks and driveways. Do not shovel snow into manholes and catch basins.
• Offer to help individuals who require special assistance, including seniors and people with disabilities.

If You Must Drive a Vehicle in a Snowstorm:

Whenever possible, avoid driving in a winter storm. However, if you must drive, or get caught in a storm while already on the road, heed the following tips:

• Avoid traveling alone, but if you do, let someone know your destination, route, and when you expect to arrive.
• Dress warmly. Wear loose-fitting, lightweight clothing in layers.
• Listen to the radio or call the state highway patrol for the latest road conditions.
• Use major streets or highways for travel whenever possible; these roadways will be cleared first.
• Drive slowly. Posted speed limits are for ideal weather conditions. Vehicles take longer to stop on snow and ice than on dry pavement.
• Four-wheel drive vehicles may make it easier to drive on snow-covered roads, but they do not stop quicker than other vehicles.
• If you skid, steer into the skid and straighten the wheel when control is regained.
• Know your vehicle’s braking system. Vehicles with antilock brakes require a different braking technique than vehicles without antilock brakes in icy or snowy conditions.
• Keep your vehicle’s gas tank as full as possible.
• Carry a cell phone and ensure it is fully charged.
• Keep an emergency kit in your vehicle. In addition to first aid supplies, make sure you include roadside reflective signs or flares, jumper cables, shovel, blankets, water, candle, matches or lighter, water, and snacks.

KEPCo Hires Staff

Julie Spielman has joined KEPCo as an Accounts Payable/Payroll Specialist 2. Julie is not new to the electric cooperative family as she previously worked ten years as an accountant at 4 Rivers Electric Cooperative.

Julie attended Topeka Technical College and graduated with an associate degree in business.

Julie was born and raised in Pomona where she resides with her husband, Jason, and their son, Jagger (13).

When away from work, Julie enjoys watching her son play sports and spending time with the family outdoors.

Keith Burk has been hired as an Information Specialist 2. He graduated from Washburn University with an associate degree in industrial technology.

Keith comes to KEPCo from Security Benefit SE2, where he spent six years as a Desktop Support Specialist II.

In his spare time, Keith enjoys physical fitness activities and spending time with friends.

Kristina Kuebler joins KEPCo as an Administrative Assistant. She is from Sabetha and graduated from Allen County Community College with an associate degree in psychology.

Kristina has vast professional experience, with her most recent position as the Agency and Community Engagement Administrator at the Kansas Department of Children & Families.

She is married to Rick, and they have three children, Amber (21), Zacharia (18), and Isaiah(13). Kristina enjoys baking, sewing, and spending time with family.

Welcome Julie, Keith, and Kristina!

KEPCo Attends Co-ops Vote Events

Co-ops Vote is a non-partisan campaign focused on enhancing the political strength of electric cooperatives through relationship building and voter engagement. Working in collaboration with our member cooperatives, this effort educates and engages legislators and co-op staff on important issues, such as expanding broadband coverage throughout rural Kansas, ensuring continued access to reliable and affordable electricity, and promoting the work of co-ops within the communities they serve.

KEPCo Conducts Annual Meeting

KEPCo’s 48th Annual Membership Meeting was held November 16 in Wichita. At the meeting, Suzanne Lane, KEPCo EVP & CEO, commented on the status of KEPCo and the utility industry as a whole, highlighting the unprecedented and rapid pace of industry changes, the challenges and opportunities that change brings, and the policies and resources in place that will enable KEPCo to navigate through the changes.

KEPCo Conducts Strategic Planning

At its October board meeting, the KEPCo Board of Trustees enlisted the services of Aaron Stallings, Jason Mowery, and Mike Lewis of National Rural Utilities Cooperative Finance Corporation (CFC) to assist the board in developing a strategic plan for KEPCo. During the two-day meeting, the goal was to achieve consensus on the strategic goals on which KEPCo will focus over the next three-to-five years and to develop an implementation plan for the goals.

“A significant benefit of strategic planning is that it creates a forward-focused vision for the organization, developed and supported by our membership—which is key to the co-op model. By developing and finalizing KEPCo’s goals and defining the action items and timelines required to achieve those goals, staff clearly understands the priorities and expectations of our membership over the planning horizon. This is key to assuring we successfully meet our members’ needs,” said Suzanne Lane, KEPCo EVP & CEO.