Archive for the ‘Monthly Summary’ Category

Wednesday, April 12th, 2017

 

 

 

BUSINESS OPERATIONS – APRIL 12, 2017

 

Integrated Resource Plan (IRP). The Arkansas River Power Authority is in the process of preparing an Integrated Resource Plan (IRP), as required by the Western Area Power Administration (WAPA) under its Energy Planning and Management Program. ARPA will be accepting written and verbal comments from affected retail customers of the six ARPA communities at the April 27, 2017 meeting and for a ten working day period following the April meeting. At the end of the comment period, all comments received from the public will be reviewed and, if necessary, changes will be incorporated into the IRP. The final IRP will be approved at a public meeting of the ARPA Board of Directors on May 25, 2017. Interested parties may provide written comments directly to ARPA outside of the April 27 public meeting by sending them electronically or via US Mail to the following address: Rick Rigel, General Manager, Arkansas River Power Authority, P O Box 70, Lamar, CO 81052, rrigel@arpapower.org

ARPA Board Discusses Distributed Generation (DG) Policy. With utilities facing an increased interest from its customers and developers to install distributed generation such as wind and solar, it’s only natural that ARPA and its members would experience continued marketing efforts by solar companies. There are many facets to solar developments that must be considered, especially when considering large solar gardens. For instance, what impact would a mid to large solar installation have on power supply contracts, rate structures, and reliability?

The ARPA Board directed staff to continue its efforts on developing a policy for the development of renewable power generating installations including solar developments, and to ensure the policy addresses the following issues:

  • Review of rate modifications that will not increase rates, but would alter how fixed costs are recovered. ARPA’s fixed costs include debt service, administration expenses, and capacity related costs. These fixed costs differ from variable costs such as purchased power and transmission costs associated with energy sales and usage.
  • Evaluate the potential for ARPA to enter into power purchase agreements (PPA) with solar developers above a certain sized installation. For example, ARPA could consider the possibility of contracting with its member community directly for the generated output of solar installation, or contract with the solar developer directly.
  • The Board also discussed whether to place a cap or upper limit on the amount of solar installations it could support in each member community, and as a whole. There are contractual implications related to the sizing of renewable resource developments that will need to be addressed in a policy.
  • Ensure member utility operations are aware of the metering requirements for renewable installations. It is imperative that the utilities be able to capture all renewable generated energy for cost recovery and transmission capacity and scheduling purposes.

Southeastern Colorado Water Conservancy District’s (SECWCD) Pueblo Hydro Project. After an extensive review of the pricing, contract terms and compatibility with existing power purchase agreements, the ARPA Board decided to not pursue a long-term contract for hydro power with the SECWCD. The Board liked many of the attributes the project provided, but ultimately determined that the time and circumstances were not right for the long-term commitment.

Contract Power Rate. ARPA has been working with certain of its members on an economic development effort. After evaluating the potential for an economic development opportunity, and ARPA’s existing tariff structure, the Board directed staff to continue its efforts to evaluate the development of an economic development rate.

Summary of February 2017 Financial and Operating Statements. During the month of February, total operating revenues were less than budget by $44,520. Total cost of goods sold were just over budget 0.9%, and A & G expenses for the month were over budget by $51,585. There were net losses of $220,690 for the month. Total Revenues YTD are better than budget by $55,602. Member sales for February were 3.2% lower than February of 2016 and lower than budget by 2.2%. Member Sales YTD are about 1.8% better than budget.

 Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, April 27, 2017 by WebCast beginning at 9:00 a.m. ARPA board meetings are open to the public. If anyone wishes to attend, please contact the ARPA office (719) 336-3496 for additional details.

Tuesday, March 14th, 2017

 

 

BUSINESS OPERATIONS – MARCH 14, 2017

Integrated Resource Plan (IRP). The Arkansas River Power Authority is in the process of preparing an Integrated Resource Plan (IRP), as required by the Western Area Power Administration (WAPA) under its Energy Planning and Management Program (EPAMP). The IRP will consider all practicable energy efficiency and energy supply resource options to meet future needs. The IRP must adhere to several criteria, which are listed on the WAPA website under the IRP section. ARPA is working with an outside consultant to complete the IRP and submit it to WAPA by June 1, 2017.

One of the requirements of EPAMP is to “provide ample opportunity for full public participation.” ARPA will be accepting written and verbal comments from affected retail customers of the six ARPA communities at the March 30, and April 27, 2017 meetings and for a ten working day period following the April meeting. At the end of the comment period, all comments received from the public will be reviewed and, if necessary, changes will be incorporated into the IRP. The final IRP will be approved at a public meeting of the ARPA Board of Directors in May 2017.

Interested parties may provide written comments directly to ARPA outside of the listed public meetings by sending them electronically or via US Mail to the following address: Rick Rigel, General Manager, Arkansas River Power Authority, P O Box 70, Lamar, CO 81052, rrigel@arpapower.org

Summary of January 2017 Financial and Operating Statements. During the month of January, total operating revenues were better than budget by $100,122. Total cost of goods sold were over budget 7.5%, and A & G expenses for the month were over budget by $133,822. There were net revenues of $92,942 for the month. Member sales for January were 3.8% better than January of 2016 and better than budget by 5.3%.

Wind Generation Report. The wind turbine generator near Springfield is currently down due to a bearing failure. It is expected the generator will be repaired by mid to late March.

ARPA Scholarship Program. In 2000 the Arkansas River Power Authority Board of Directors established a College Scholarship Program. The Program is administered through our member municipalities of Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad, Colorado. The scholarship is awarded to one high school senior in each member municipality. The total scholarship award is $1,000 funded equally between ARPA and the member municipality. Application forms, scholarship requirements, and eligibility criteria are available either through the counseling offices of the member high schools or at the local office of the electric utility. To be eligible, a student must reside with a family that receives electric service from one of the ARPA member municipalities.

Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, March 30, 2017 at the Las Animas Bent County Fire Department, 435 W 5th Street, Las Animas. ARPA board meetings are open to the public.

Friday, February 17th, 2017

 

 

 

BUSINESS OPERATIONS – FEBRUARY 17, 2017

ARPA Board Reviews Power Supply Options. The ARPA Board is continually evaluating options for current and future power supply and received an update on certain options at its January Board meeting. The discussion included a review of contract terms for the Pueblo Hydro Project. The Southeast Colorado Water Conservancy District (SECWCD) has developed a plan to install a small hydro-electric power generating station at the Pueblo Dam. The ARPA Board is exploring the option of procuring 50% of the total output from the project. The Board also discussed the potential to extend its current power supply contract with Twin Eagle Resource Management. The existing agreement goes through January 31, 2025 and Twin Eagle has proposed a three-year extension to that agreement, for years 2025-2027. The Board also reviewed projections for future index pricing from JK Energy Consulting. The Board directed staff to continue contract discussions with SECWCD and Twin Eagle.

Mountain West Transmission Group (MWTG). The transmission owners in the state have been working on a project which they believe will reduce transmission costs and alleviate certain transmission constraints throughout the state. The initial goal of the group was to develop a Joint Transmission Tariff between the providers. However, after a series of meetings the group determined that the implementation of an RTO (Regional Transmission Organization) would be the most effective way to reduce costs and manage electric resources.

The RTO would manage, among other things, the operation of the transmission and electric generating assets on the grid, including ensuring the adequacy of reliability and economics of the generating resources, and develop auction based electricity products. The plan calls for the implementation of an RTO in 2019. It is difficult to determine what the impact of the RTO may have on ARPA and its members at this point, but it does represent a significant change in how electric utility transmission and generation will be managed.

Redemption of a Portion of Series 2003 Bonds. A payment in the amount of $192,483 ($190,000 principal redemption, $2,483 outstanding interest) was made to ARPA’s Bond Trustee, UMB Bank, to redeem a portion of the Series 2003 Bonds. The Board will evaluate its ability to retire more of these bonds later in the year. The 2003 bond series was for the ARPA wind turbine financing. Once the bonds are retired, ARPA will realize an annual debt service reduction of approximately $256,000.

Summary of Unaudited December 2016 Financial and Operating Statements. During the month of December total operating revenues were better than budget by $38,219. Total cost of goods sold were over budget 4%, and A & G expenses for the month were over budget by $72,669. There were net revenues of $207,102 for the month; year to date (YTD) net income is $3,612,411. Member sales for December were 3.9% better than December of 2015, and YTD sales are better than 2015 by approximately 4.1%.

Wind Turbine Operations. In 2016, the 5 wind turbine generators (3 Lamar; 2 ARPA) produced 18,628 MWHs. Compare this to the year 2008 when the total generation was 24,284 MWHs. Part of the reason for the reduction in generation was mechanical failures. The Baca County turbine, typically the highest producing turbine, was off line about 14 weeks (March-June) due to a transformer failure. In Prowers County, one of the four turbines was off line for 3 months (May-July) due to a gearbox failure.

Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, February 23, 2017 at the La Junta Holiday Inn Express, 27994 US Hwy 50 Frontage Road. ARPA board meetings are open to the public.

Wednesday, January 4th, 2017

 

 

 

BUSINESS OPERATIONS – JANUARY 4, 2017

 

ARPA Board Authorizes Redemption of a Portion of Series 2003 Bonds. The ARPA Board has been working with its Financial Advisor, Public Financial Management (PFM) to reduce its ongoing debt service obligations. At its December meeting, the Board passed a resolution authorizing the redemption of the 2003 Series Bonds. The Board will initially retire a portion of the bonds in the first quarter of 2017 and evaluate its ability to retire additional bonds later in the year. Once the bonds are retired, ARPA will realize an annual debt service reduction of approximately $256,000.

 2017 Budget – Power Costs Remain Stable for the Sixth Consecutive Year. At its December meeting, the ARPA Board approved a budget for 2017 that results in no power supply cost increase for the sixth consecutive year.

The budget includes total Revenues of approximately $32.7 million with sales budgeted at 266.3 million kWh. The power supply budget is approximately $13.3 million and projects that approximately 63% of the 2017 ARPA power supply will be provided by Twin Eagle Resource Management. Twenty-nine percent of the ARPA member’s power supply requirement is anticipated to be provided by federal hydro-power contracts with the Western Area Power Administration and approximately 8% will be provided by the 5 wind turbine generators owned by Lamar (3) and ARPA (2). Total Transmission cost is budgeted at $2.4 million and includes the cost for Network Transmission Service from both Tri-State and Black Hills, and point-to-point agreements with a variety of third-party transmission providers. Debt Service payments are budgeted at $10.2 million, with $7.9 million in bond interest and $2.3 million in bond principal.

2017 Wholesale Rate Review. Based on its 2017 budget, the Board of Directors adopted Resolution No. 08-16, which resolves that no changes be made to the existing ARPA Rate Tariff.

ARPA Board Approves Transmission Agreement for Service to Trinidad.  At its December meeting, the ARPA Board approved a transmission agreement with San Isabel Electric Association for service to the City of Trinidad. The agreement provides fixed transmission rates through 2019 and the means to establish future rates based on San Isabel’s actual costs to serve the City, stabilizing transmission rates for Trinidad consumers.

Summary of October 2016 Financial and Operating Statements. During the month of October total operating revenues were better than budget by $73,652. Total costs of goods sold were over budget 2.4%, and A & G expenses for the month were just over budget by $80,254. There was a net loss of $101,977 for the month; year to date (YTD) net income is $3,518,426. Member sales for October were 1.2% better than October of 2015, and YTD sales are better than 2015 by approximately 1.1%.

Board of Directors Meeting Dates and Locations for 2017. The Board once again voted to hold five of its 2017 scheduled meetings by WebCast. This alleviates the cost of travel for Board members and staff, and provides an opportunity for additional participation from the member’s governing boards and general public. If anyone wishes to receive a copy of the dates and locations for the 2017 scheduled meetings, and details regarding the WebCasts, please call the ARPA office at 719-336-3496.

Next ARPA Meeting. The next ARPA board meeting is scheduled for Thursday, January 26, 2017 and will be held by WebCast. ARPA board meetings are open to the public.

Tuesday, November 15th, 2016

 

 

 

BUSINESS OPERATIONS – NOVEMBER 15, 2016

ARPA’s Operating Committee Recommends Allocation of Funds for Safety Training and Workforce Development: The ARPA Operating Committee met recently to discuss workforce recruitment and training. The ARPA members have recognized that retaining experienced electric crews is critical to the operations and maintenance of their electric systems. And they have also recognized, and experienced the challenges of recruiting and retaining the expertise needed for their operations. To that end, the Operating Committee recommended to the ARPA Board of Directors that they commit $15,000 for safety training and workforce development in the 2017 budget. Specifically, the Operating Committee recommended the funds be allocated as follows:
• $6,000 ($1,000 to each member) to defray the cost of attendance at hot line schools;
• $1,500 for membership in the Center for Energy Workforce Development;
• $7,500 for third-party training and nominal costs associated with membership hands on training (includes annual pole-top and bucket truck rescue and mobile substation training).

The Center for Energy Workforce Development: Today’s Youth are Tomorrow’s Pipeline for Careers in Energy: ARPA staff recently attended a Center for Energy Workforce Development (CEWD) conference that focused on partnering with educators and workforce centers to create pathways for energy jobs. CEWD provides ready-to-use resources that enable energy companies to attract, train, and hire a workforce that includes youth, military, women, and transitioning adults. CEWD believes building the next generation of energy workers is critical to the future of the industry. ARPA anticipates becoming a member of the Workforce Development group and actively participating with its members to help tailor and implement proven solutions and strategies for developing a long term program to recruit and retain the expertise needed to safely and effectively operate and maintain our electric systems.

ARPA Board Authorizes Extension of Contract with IPP for Marketing and Sale of the Lamar Repowering Project: At its meeting on October 27, the ARPA Board of Directors authorized the General Manager to extend the contract with International Process Plants (IPP) to assist it with the marketing and sale of the Lamar Repowering Project (LRP). IPP will continue its attempt to sell the Plant as a complete unit including the boiler and its ancillary equipment and coal handling facilities, and the 18 mW turbine generator and ancillary equipment, including the air cooled condenser. The extension will allow IPP’s efforts to continue until November 2017.

Proposed 2017 Budget: The final proposed 2017 budget was presented to the ARPA Board of Directors at its October 27 meeting. As presented, the budget includes no base rate increase for 2017. This will be the 6th consecutive year of no power supply cost increase. The budget projects total revenues of $32.6 million, power supply costs of $13.2 million, transmission costs of $2.4 million, and A&G costs of $2.9 million. Debt Service, reflecting retirement of the 2003 bonds, would be reduced to $9.9 million and it anticipates a 1.38x debt service coverage which exceeds its requirement per ARPA’s bond covenants.

Summary of September 2016 Financial and Operating Statements: During the month of September, total revenues were better than budget by $147,666. Total cost of goods sold was under budget 6.9%, and total A&G expenses, not including LRP Engineer and Contractor expenses for the month, were over budget by $120,896. There were net revenues of $283,175 for the month of September. YTD net revenues are $3,620,478. Member sales were about 4.8% better than budget for September and 4.6% better than budget YTD. YTD sales for 2016 are 1.1% higher than 2015 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, December 8, 2016 at the Otero Junior College Student Center in La Junta. In addition to the regular meeting the Board will consider adoption of the 2017 Budget at a hearing set to begin at 10:30 a.m. ARPA board meetings are open to the public.

Friday, October 14th, 2016

 

 

 

BUSINESS OPERATIONS – OCTOBER 14, 2016

ARPA Board Exploring Possibility of a Purchase Power Agreement for Additional Hydro-Electric Energy: Kevin Meador, Principal Engineer for the Southeastern Colorado Water Conservancy District (SECWCD) provided a presentation to the ARPA Board of its plan to install hydro-electric power generation at the Pueblo Dam. The purpose of the Project is to take advantage of available hydropower and clean renewable energy opportunities, and to provide a long term economic benefit to power and water users in the SECWCD service area. SECWCD estimates that the project would generate an average of 28 million kWh annually, based on a “run of the river” schedule of the Arkansas River. The Arkansas River’s greatest water flows through Pueblo Dam are from March through August which coincides with the peak power summer demands for the ARPA members. SECWCD will own the facility and obtain Purchase Power Agreement(s) (PPA) for the energy output; Colorado Springs Utilities will provide operations expertise and maintain the facility. If SECWCD can secure a PPA within the next few months they will begin construction in 2017 with an estimated completion date in early to mid-2018.

The ARPA Board expressed an interest in securing a PPA with SECWCD and instructed staff to perform an evaluation of the pricing, transmission arrangements, and contract terms that would be necessary for an agreement.

ARPA Board Reviews Preliminary 2017 Budget: A preliminary budget was presented to the ARPA Board of Directors at its September 29 meeting. As presented, the budget includes no base rate increase for 2017. This will be the 6th consecutive year of no power supply cost increase. The budget projects total revenues of $32.6 million, power supply costs of $13.5 million, transmission costs of $2.4 million, and A&G costs of $2.9 million. Debt service, absent a refinancing, will continue at an annual cost of $10.2 million and anticipates a 1.32x debt service coverage as required by ARPA’s bond covenants.

ARPA Board to Consider Retiring 2003 Bonds: In conjunction with the budget discussion, the Board also discussed retiring its 2003 bonds. The bonds are all currently callable and would reduce ARPA’s annual debt service by approximately $256,000 and result in interest savings of approximately $387,000. The Board will continue the discussion at its October meeting.

The proposed 2017 budget for the Arkansas River Power Authority will be available for inspection beginning November 7th at the City Clerk’s office in each member city. The ARPA Board of Directors will hold a public hearing on the proposed Budget at the Otero Junior College Student Center, 2001 San Juan, La Junta, CO., on Thursday, December 8, 2016.

Summary of August 2016 Financial and Operating Statements: During the month of August, total revenues were better than budget by $154,872. Total cost of goods sold was under budget 5%, and total A&G expenses, not including LRP Engineer and Contractor expenses for the month, were over budget by $74,105. There were net revenues of $577,357 for the month of August. YTD net revenues are $3,335,363. Member sales were about 4.7% better than budget for August and 4.5% better than budget YTD. YTD sales for 2016 are 2.2% higher than 2015 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, October 27, 2016, by WebCast. If you are interested in attending the ARPA Board meeting please call the ARPA office 719-336-3496 for additional details.

Wednesday, September 14th, 2016

 

 

 

 

BUSINESS OPERATIONS – SEPTEMBER 10, 2016

ARPA Board Recognizes Lawrence Sena for Exceptional Contribution to Public Power: The ARPA Board presented its Tom Pryor award to the former mayor of Las Animas, Lawrence Sena, for his loyal support of ARPA’s mission and his “we are ARPA” attitude. Lawrence was recognized for his 25-year career that included serving as Bent County Commissioner, and Councilman and Mayor of Las Animas. Mayor Sena firmly believed in Public Power and that the “customers” of Las Animas Municipal Light and Power were its owners and all decisions should be based on the benefit of the majority of those served.
Congratulations Lawrence and good luck in your future endeavors.

ARPA Board Reviews Refinancing Alternatives: Representatives from Goldman Sachs, attended the August 25th board meeting in Las Animas to present potential refinancing options to the ARPA Board for discussion purposes. With interest rates at a historic low ARPA could realize significant savings over the life of the bonds by refinancing their current bonds that have a retirement date of 2043. The Board looked at a variety of options for refinancing that included a traditional refinancing, refinancing that would provide a higher savings in early years and lower savings in later years, and options that would extend the debt service thereby spreading the total costs over a longer period of time.

The savings could well exceed a million dollars annually depending on interest rates at the time of the refinancing. This amount of savings would provide ARPA the opportunity to continue its rate stabilization efforts. ARPA has not increased power supply costs to its members since 2011 and does not anticipate a rate increase in 2017.

ARPA Board Reviews Preliminary 2017 Budget: A preliminary budget was presented to the ARPA Board of Directors at its August 25 meeting. As presented, the budget includes no base rate increase for 2017. This will be the 6th consecutive year of no power supply cost increase. The budget projects total revenues of $30.9 million, power supply costs of $13.4 million, transmission costs of $2.4 million, and A&G costs of $1.7 million. Debt service, absent a refinancing, will continue at an annual cost of $10.2 million. The budget also includes achieving the 1.25x debt service coverage and full funding for bond reserve accounts as required by ARPA’s bond covenants.

The proposed 2017 budget for the Arkansas River Power Authority will be available for inspection beginning November 8th at the City Clerk’s office in each member city. Any interested elector in an ARPA member community or electricity consumer of an ARPA member (Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad, Colorado) may register objections to the proposed Budget prior to its final adoption. The ARPA Board of Directors will hold a public hearing on the proposed Budget at the Otero Junior College Student Center, 2001 San Juan, La Junta, CO., on Thursday, December 8, 2016.

Summary of July 2016 Financial and Operating Statements: During the month of July, total revenues were better than budget by $381,046. Total cost of goods sold was over budget 3.1%, and total A&G expenses not including LRP Engineer and Contractor for the month were over budget by $156,285. There were net revenues of $788,756 for the month of July. YTD net revenues are $2,758,061. Member sales were about 13.5% better than budget for July and 4.5% better than budget YTD. YTD sales for 2016 are 3.2% higher than 2015 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, September 29, 2016, in Springfield. ARPA Board meetings are open to the public.

Wednesday, August 10th, 2016

 

 

 

 

BUSINESS OPERATIONS – AUGUST 10, 2016

ARPA Board Hears Various Scenarios for Refunding/Refinancing its Bond Debt: The ARPA Board discussed various scenarios presented by Goldman Sachs for refinancing and/or restructuring ARPA’s debt. The scenarios range from a traditional refunding which would take advantage of lower interest rates currently available in the market, to restructuring the debt to realize more savings in near-term years and less or no savings in later years, to extending the debt beyond the current bond retirement date which would increase annual savings, but would result in higher interest costs over the long-term. Joseph Natoli, from Goldman Sachs, is scheduled to attend the August 25th board meeting in Las Animas to review the scenarios in detail and address questions from the Board.

Policy on Distributed Generation (DG) Must Include Fixed Cost Recovery: With utilities facing an increased interest from its customers to install distributed generation, such as wind and solar, ARPA and its members are working to develop a policy to adequately address the impact that DG could have on its fixed cost. The ARPA Board is exploring rate modifications that will not increase rates, but would alter how its fixed costs are recovered through its rates. Options include implementing a fixed rate recovery charge or establishing a base rate for capacity and energy. ARPA’s fixed costs include debt service, A&G, and capacity related costs, which may not be fully recovered in its current rate structure if a DG system was installed. These fixed costs differ from incremental costs such as purchased power and transmission costs that are associated with energy sales and usage. The Board will continue to analyze its options regarding fixed cost recovery.

Arbitrage Calculation Results in Refund from the IRS: ARPA’s Bonds are designated as “qualified tax-exempt obligations” under the Internal Revenue Code. For tax exempt financing, bond accounts are prohibited from collecting more interest than what the bonds were issued for; you can’t collect more in interest bearing accounts than you paid in interest rates on the bonds. In 2011, ARPA paid an arbitrage payment to the IRS of $145,474 for interest collected over the interest rates of the bonds. However, since 2011, interest rates on the bond accounts have been at an all-time low creating a situation of negative arbitrage. Through a five-year arbitrage calculation performed by ARPA’s Bond Counsel, it was determined that ARPA is eligible to receive a refund from the IRS for the entire amount that was paid in 2011.

Congratulations Darwin Hansen (Springfield): CAMU (Colorado Association of Municipal Utilities) held its annual conference in Aspen in July. Darwin Hansen (ARPA Board representative from Springfield and former Electric Superintendent at Springfield Municipal Utilities) was awarded the cherished “Sheepherder” award by CAMU. The annual award is given to individuals that have promoted Public Power throughout the state of Colorado. It is named in honor of Darryl T. Davis, a long time Public Power advocate from Center, Colorado.

Summary of June 2016 Financial and Operating Statements: During the month of June, total revenues were better than budget by $248,648. Total cost of goods sold was over budget 3.1%, and total A&G expenses not including LRP Engineer and Contractor for the month were over budget by $58,426. There were net revenues of $485,240 for the month of June. YTD net revenues are $1,969,306. Member sales were about 8% better than budget for June and 1.3% better than budget YTD, and 2.4% higher than 2015 sales.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, August 25, 2016, in Las Animas. ARPA Board meetings are open to the public.

Friday, June 17th, 2016

 

 

 

BUSINESS OPERATIONS – JUNE 17, 2016

ARPA Board Reviews Policy on Distributed Generation: The ARPA Board continues to review a policy on Distributed Generation (DG). Given its commitment to not increasing rates (ARPA rates have not increased since 2011), the development of DG must ensure that there are no negative rate implications for ARPA member rate payers. This includes the impact DG installations (solar, wind, etc.) may have on both ARPA’s fixed costs, and the impact it could have on its member utilities’ fixed costs. The DG installation typically produces a portion of the electric needs for an electric consumer; however, there are many times that the DG unit is not producing power and the electric consumer must still rely on the electric grid for its power supply. Much of these costs are fixed costs and must be recovered by the utility regardless of the amount of energy being provided. ARPA staff will draft a DG policy for Board review at its next meeting.

ARPA Board Reviews 2015 Audit: ARPA auditor, Ronny Farmer, rfarmer, llc, presented and briefed the Board on the 2015 Audit. ARPA had an increase in unrestricted cash of $2,002,317 from 2014 to 2015 and achieved the 1.25 times Debt Service Coverage required by its bond covenants. Net income for 2015 was $2,015,809. There were total revenues of $31,545,506 and total operating expenses of $18,851,527 in 2015. Sales were up 1% compared to 2014.

ARPA Sells its Rail Facilities Associated with the Lamar Repowering Project: GP Aggregates, LLC (“GP”), a Colorado company conducting various business activities, including aggregate mining operations in and around Lamar has purchased rail facilities and a rail spur that formerly served the Lamar Repowering Project power plant. The rail facilities include track improvements connected to the main BNSF rail line that serves Lamar and a rail spur that extends from the track improvements north to the Arkansas River. The sale of the rail facilities is part of ARPA’s plan to sell the Lamar Repowering Project assets for the financial benefit of the ARPA member communities. The acquisition of the rail facilities by GP will allow it to expand its industrial operation east of Lamar and enhance its burgeoning business operations.

Summary of April 2016 Financial and Operating Statements: During the month of April total revenues not including LRP Misc. Income were slightly better than budget. Total cost of goods sold was under budget 1.5%, and total A&G expenses not including LRP Engineer and Contractor for the month were over budget by $32,534. There were net revenues of $28,278 for the month of April. YTD net revenues are $56,958. Member sales were about 2% better than budget for April and are 1.6% better than budget YTD.

Supplemental Environmental Project Completed: The Supplemental Environmental Project (SEP) ARPA began early in 2014 to convert lighting in public facilities to low usage LED lighting, was completed on April 15. The Project primarily consisted of converting 48” T-8 fluorescent (28-32 watt) and 48” T-12 fluorescent (40-60 watt) to LED 18 watt lamps. The conversions were performed in a total of 13 facilities in southeast Colorado including libraries, senior centers, community buildings, daycare centers and museums. A total of 3,174 LED lamps were installed for a total annual kWh savings of 186,213, or $26,070 annually. The average annual energy cost savings realized in the facilities is in excess of 41%. ARPA expended over $128,000.00 on the Project. ARPA member’s electric departments provided in-kind labor to install the LED lighting which was valued at nearly $16,000.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, July 28, 2016, beginning at 9:00 a.m. by WebCast. ARPA Board meetings are open to the public. If any member of the public is interested in attending please call the ARPA office for more information.

Tuesday, May 10th, 2016

 

BUSINESS OPERATIONS – MAY 10, 2016

ARPA Holds its Annual Election of Officers: The Board held officer elections at its meeting on April 28, 2016. Board Members elected to serve as officers for April 2016 through 2017 include David Willhite (Holly), President; Rick Stwalley (Las Animas), Vice President; and Michelle Miles (Trinidad), Treasurer. David Willhite has been on the ARPA Board of Directors since 2001 and has served as President since September 2014. Rick Stwalley was appointed to the ARPA Board by the City of Las Animas in January 2010 and has served as Vice President since April 2011. The City of Trinidad appointed Michelle Miles to the ARPA Board in November 2011 and she was elected to the office of Treasurer in April 2015. Arvenia Morris, ARPA Office Manager was also elected as Board Secretary.

ARPA-LUB Complete Settlement Actions: ARPA and the Lamar Utilities Board (“LUB”) recently completed the action items that effectively settled the lawsuit between the two entities. The Settlement resulted in LUB dismissing its lawsuit against ARPA and disconnecting the Lamar Repowering Project (“LRP”) from the LUB electric system. The responsibility for maintenance of the LRP was transferred to ARPA and LUB assumed all responsibility for costs associated with LUB assets. ARPA also agreed to reimburse LUB for staffing costs that had been withheld during the dispute. The Settlement allows ARPA to manage the maintenance of the plant and paves the way for a significant reduction in maintenance costs for the facility.

ARPA Operating Committee Discusses Member Staffing and Training Options: The ARPA Operating Committee is evaluating staffing and training options for its power plant operators and line-workers. One of the issues that is forefront for ARPA member’s operations is the ability to recruit and retain staffing with the necessary expertise for electric system operations. In addition, affordable safety and training opportunities are a relevant factor for the issue. The Operating Committee is researching training options and opportunities for funding to support the effort. The Committee hopes to build on the recent bucket truck and pole top rescue training exercise it held. This safety training was led by La Junta and Las Animas head linemen and was attended by 40 personnel from member cities’ electric departments, parks workers, and other personnel that operate bucket trucks.

ARPA Board Discusses Developing a Policy on Distributed Generation Resources: ARPA and its members are exploring the possibility of developing a uniform policy on Distributed Generation Resources (“DG”) installations. DG’s are electric generating resources that are constructed on-site/at a point of use, as opposed to a conventional utility owned power station. A DG is typically small in size and is fueled by using renewable resources such as solar or wind. There are a variety of ownership models for DG development ranging from a home owner putting solar panels on their roof to the development of a solar garden in which a variety of people can participate as investors/owners, to much larger utility grade developments. When utilities such as ARPA or its member electric systems consider DG development, several issues come into play including the impact on power supply contracts, rate structures, and reliability. ARPA will continue to explore the various approaches for DG development and the opportunities it may present.

Summary of March 2016 Financial and Operating Statements: During the month of March total revenues not including LRP Misc. Income were slightly better than budget. Total cost of goods sold were under budget 8.7%, and total A&G expenses not including LRP Misc. Income for the month were over budget by $38,753. There were net revenues of $207,461 for the month of March. YTD net revenues are $21,150. Member sales were 1.7% better than budget for March and are 1.4% better than budget YTD.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, May 26, 2016, beginning at 10:00 a.m. at the Lamar Community Building, 610 South 6th Street, Lamar. ARPA Board meetings are open to the public.