Message from General Manager, Steve Jones, from February 15 Board of Directors Meeting:

 

Many of you have called me or called our office with questions. Many of you have posted comments to Facebook.

 

There are three common threads among the comments.

• There are frustrations over how long people were without power during the recent ice storm.
• There are questions about high bills and new charges on your bills.
• There are questions being raised about managers and board members.

 

You were given a copy of my statement when you walked in.

In this document, we will try to answer each of your questions as best we can.

 

At the heart of everything, we know that when you reach for the switch on the wall, you want the lights to come on. We want the same thing also.

 

While our goal is to keep your lights on every day, all day, statistically we keep power on at your home or business about 98% of the time. Bad weather accounts for the two percent of the time that the power is out, with an occasional outage because of a vehicle accident or an equipment failure.

 

• That 2% of the time that you are without power can be frustrating.
• We know that it makes you mad.
• And we know you get even madder if you’ve been without power, and then shortly after a major outage, you get a high utility bill.

 

In this statement we’ll tell you what we can control and what we can’t control.

 

You’ll also hear some good news that we are able to share for the first time.

The good news is that we have found a way to lower a portion of your electric bill. We’ll share those details in a moment.

 

Let’s start with a look at the recent winter storm.

 

Unlike the February 2021 storm, which hit a smaller portion of our area, this recent storm blanketed every square mile of our territory.

 

The weight of the ice causes lines to sag until the line either breaks or the ice pulls the poles down. The weight of the ice also causes many trees and tree limbs to break and fall on powerlines.

 

From a misery standpoint, it was the perfect storm.

• We lost and had to replace 110 poles
• We had to replace 545 Fuses
• We had to replace 79 Cross Arms
• We had to replace 3 Transformer
• We had to replace 3 Breakers

 

The degree of damage we suffered is equivalent to what a coastal cooperative faces after a major hurricane. Likewise, the misery you suffered is equivalent to what residents along the coast face after a major hurricane. Whether it is hurricanes or ice storms, we have no control over the weather.

 

When the storm hit, we sent crews out as soon as the first meter went out. We brought in crews from 5 additional contractors and 4 neighboring cooperatives sent crews to help us.

 

In total, it was 6 days from start to finish, without including homes that lost a service line that required additional work.

 

Here are a few questions related to the storm outage that you asked us on Facebook:

 

During the outage last week, some of you were upset because a neighbor across the street had power and you didn’t. We understand that such a thing doesn’t seem to make sense, but here is the reality of that situation.

 

• The reality is that your side of the street might be on an entirely different substation or switch. So even though we may have replaced wires and poles down the entire street, it doesn’t mean the power will come back immediately for both sides of the street. We are sorry about that, but it is just the way the power grid is laid out.

 

• Some of you had your lights come on and then the power went out again. We hate when that happens. That is usually caused because we may have fixed the bigger problem, but not soon after, the ice causes another line to fall or another pole to break. This is always beyond our control.

 

We were asked by Karen Phillips on Facebook why the front half of Cedar Branch Estates had power from BTU and the back half served by NVEC did not have power.

 

• Once again, this comes down to the randomness of why one-line breaks, or why one pole breaks, or why one large tree falls or any of a number of random weather conditions beyond our control.

 

• It isn’t that one company has done something extraordinary that the other has not done. In fact, that neighborhood was part of a recent round of maintenance and tree trimming. So, the issue was likely caused by the weight of the ice in that particular area.

 

We were asked on Facebook if you are being charged for power when the power is out.

 

• The answer is no.

 

• However, the question came because some members were taking advantage of our online website to look at outages. Our online system shows both actual consumption and estimated consumption.

 

• When you are looking online, if you see the Code VEE, this is an estimate. VEE stands for Validation, Editing, and Estimation.

 

• You see on the slide when the power was cut off. Those little green lines at the bottom are simply there to mark the number of passing hours without power. These do not indicate power usage.

 

• At billing time, the system trues up the actual usage, so you are only billed for what you actually used.

 

We apologize if there was any confusion about this. You were not charged for power you did not use.

 

Some of you reported problems with the text message reporting system.

 

This was the first storm in which we deployed the new text messaging system to report an outage.

 

First thing to know when using the text outage system, if you have not registered your cell phone in your account, when you try to send a text to us, you will get an Error Message.

 

This doesn’t mean the system is broken. It means we need you to add your cell phone number to your account.

 

We have every indication that the system worked correctly, so if anyone had trouble with it, we will work with you to solve any issue you may have had, including helping you update your account information.

 

• Ideally, we would like every member to share their cell phone number with us. This allows you to properly report an outage.
• Call 800-443-9462 and press 4, then follow the prompts to update your phone number.
• Additionally, we have new systems in place so we can alert you of outages or approaching bad weather that might cause an outage.
• We would also like each member to update their account with an email address that allows us to send you warnings and updates.
• We can more effectively share information with you when we have an email address and a cell phone number.

 

Some of you were studying the outage maps...

 

• This one is a little harder to explain, but at the root of understanding who has power and who doesn’t, we need your help to share your cell phone number with us so we can text you during the outage to ask if you have power, so you can tell us yes or no.

 

• Our outage map is essentially an approximation map used by our engineering department so they can see the biggest areas of outage where they can make the biggest difference in the shortest amount of time.

 

• The outage map is not able to accurately show each meter that is on or off.

 

• To be more accurate, when a large area comes back on, our system will push out a text message to your phone, if you are registered.

 

• The text will say power has been restored in your area and it will ask you to confirm. Your participation and interaction with the text is the most critical way for us to know you still need help.

 

 

The next line of questioning essentially asked, “Why is my current bill so high?”

 

Three factors come into play with your current bill.

 

Factor 1 – Bills following a cold snap or a heat wave are always higher than in the milder months. Your August bill will always be higher than your April bill because you run your air conditioning more in August. Your January or February bill will always be higher than your October bill, because you run your heater more.

 

Factor 2 – The cost of fuel for the power plants changes based on global events and global prices. Up until now, this has been beyond our control. On your bill you will see the PCRF – Power Cost Recovery Factor. That amount is passed on to you from the power generating company. Remember, we don’t generate your electricity. We bring it to your home through our network after it is purchased from the power generator.

 

Historically, we have purchased power from Brazos, which relied on natural gas to generate electricity. In the past 18 months the price of natural gas has increased from $2.10/MMBtu to more than $10/MMBtu. Sometimes that price is affected by supply and demand in the United States, but it is also affected by global markets, including the war in Ukraine and sanctions placed on Russian natural gas by various European countries.

 

A requirement of Brazos’ exit from bankruptcy is that Brazos can no longer be a power supplier. We will tell you more in a moment about our new power deal that should save you money.

 

Factor 3 – It’s the bombshell we’ve all been waiting for since Winter Storm Uri in February 2021.

 

You now have something known as the SCRF – the Securitization Cost Recovery Factor, showing up on your bill. This is adding $17 to your bill for every 1,000 KWH Kilo Watt Hours of electricity you use.

 

We don’t like it any more than you do, but unfortunately, this is what the Texas legislature put in place, and we are all stuck with it.

 

Here is the background on how that came to be.

 

• As ERCOT failed during Winter Storm Uri in 2021, the price of Natural Gas went through the room. The power generators were used to paying about $2-$3 per Million British Thermal Units, also known as MMBtu. For three days the price skyrocketed to $224.56.
• Was there price gouging? We certainly think so.
• Did you become the victim of this? We certainly think so.
• Could we stop it? No, we could not.

 

• The bill for natural gas to Brazos, our power supplier, forced them to file for bankruptcy to protect you from each having a bill that no one could afford.

 

• If Brazos had not filed bankruptcy your immediate bill after Uri would have been in the thousands or tens of thousands of dollars. This happened to many people who were buying their electricity from a deregulated power company.

 

• The Brazos bankruptcy was a tool to protect you, but that only went so far. Essentially it pushed your bill pain back two years.

 

• The Texas legislature established the Scrutinization with SB3, as a way for all the electric cooperatives to pay our share of the high natural gas bills. Unfortunately, you are seeing this added to your bill on a month when your bill was already high because of the storm and because of higher natural gas prices.

 

• Sadly, we are all stuck paying that fee every month for the next 28 years.

 

• There is absolutely nothing we can do to stop it. If you want to stop it, you have to talk to your legislators.

 

The next line of questioning has to do with whether your management and your board are doing all we can to protect and serve you.

 

Some of you commented on Facebook that you don’t know the rules regarding elections and that you don’t know how to contact your board member.

 

When you walked in, you were given information about the board members, their terms of service and the election rules. We will also update our website with this same information.

 

Now to the good news that we can share with you:

 

Good News Item #1 - The best news we have for you is that we have negotiated a new agreement to buy your electricity from the Lower Colorado River Authority.

 

With Brazos out of business as a power generator, the Lower Colorado River Authority will be our new supplier.

 

We have negotiated a three-year agreement that will help levelize the Power Cost Recovery Factor. This will add some degree of stability to your monthly bill. At the end of the three years, we have to renegotiate the contract.

 

Additionally, the cost of power from the Lower Colorado River Authority is $20 per megawatt hour cheaper than our most recent cost from Brazos.

 

The lower cost for power and the three-year contract that eliminates fuel cost fluctuations should ease some of the pain you have been experiencing when your bill arrives.

 

Good News Item #2 – Right-of-way Maintenance continues to help with day-to-day reliability.

 

As part of my responsibility to the board, I give them an update every month, so this is my update to both the board and to the members.

 

• In 2022, for the right-of-way maintenance, NVEC spent $2.3 million.
• The board has approved a $2.6 million right-of-way budget for 2023. 
• The cost for right-of-way clearing is $10,000.00/mile.

 

Here is a list of the right-of-way work from 2022:

Franklin-

YTD-12-15-22

 

Sutton Sub 95.28% cleared

Hilltop Sub 55.88% cleared

Franklin/B5 Sub 75.62% cleared

Butler Sub 100% cleared

 

Total spent for clearing 2022 (Franklin) - $1.2 Million

 

Mart-

YTD as of 12-15-22

 

Oletha 2401/2402 14.2% cleared

Freestone 1204 100% cleared

Freestone 1201 70.8% cleared

Farrar 2411 100% cleared

 

Total Spent for the Mart Office in 2022 - $ 1.1 Million

 

Several of you want legacy information about right-of-way clearing.

 

While we have budget numbers, we can tell you that prior to Winter Storm Uri, there was no organized vegetation management plan.

 

• Prior to Uri, when there was an overgrowth issue that caused and outage, we sent a crew out to clear the right of way.

 

• One of the outcomes of Uri was that we learned that a more systematic approach was needed, which is the plan that we have been executing for the past two years and that we will continue to pursue into the future.

 

• Under our new approach, we have identified the areas with the greatest overgrown, we sent crews out to the nearest substation, and the crew beings working the entire length of line coming from the substation.

 

• First the crews clear the 3-Phase lines, which are the main lines. Then they crews move on to the smaller tap lines. After this is done, the crews move to the next substation and repeat the process.

 

In summary, we hope we’ve answered your most pressing questions.