CEO Report

Good morning everyone,

Thank you for joining us today at emPower Summit 2021, celebrating the Co-op’s  76th Annual Meeting.. My name is Roger Andrade, CEO of Rio Grande Electric Cooperative. It is an honor and a privilege to be here today. We are gathered once again in a virtual environment in an effort to continue to promote the health and safety of our members and valuable staff. The board of directors and yours truly deliberated significantly on the decision whether to go virtual or hold an in-person meeting. It was everyone’s desire  to return to some form of normalcy and hold the meeting in person; however, given the ever-changing environment, the prudent and obvious choice was a virtual meeting.

I want to take this opportunity to thank all of the wonderful employees who  contributed to the making of this meeting. Without their dedication and support, this meeting would not have been possible. I would also thank our board for their leadership in making tough decisions throughout these times.

When December 31st 2021 rolled around, I think I can speak for everyone when I say, “I’m glad that’s over!”  We all wanted to turn the page and close that chapter of the book, along with all the challenges and difficulties that came with it.  Then along came 2021, and said “Hold my beer!”  The year started with one of the saddest events in our recent history as a nation, with the January 6th insurrection.  This was quickly followed by the costliest winter storm on record, and the second deadliest storm in North America  -- Winter Storm Uri.  After all that calamity, we started seeing a positive trend and recovery toward a post-covid era. But it was not to be, and  was stopped in its tracks by the coronavirus delta variant.  Immediately following this, were a couple of very serious cyber threats that exposed serious and far reaching vulnerabilities within the country’s critical systems in Solarwinds and the Colonial Pipeline hack.   Now more recently, and in our own backyard, the border crisis is at its worst in history.

I could easily fill today’s report and recount all the negative events that have transpired this year, but I won’t.  I think we hear and see plenty of that on our news feeds and media every day.  Instead, let me share with you what has kept the  Cooperative busy throughout this year.

We doubled down on efforts to perform maintenance on all facilities.  In doing so, we ensured that  contractor crews remained present performing system improvements in various areas of our service territory.  This is important because, not only is  aged infrastructure being updated, it also allowed us to have additional resources, or “boots on the ground”, so to speak, when storms hit, and that has paid tremendous dividends in terms of responding to outages and minimizing losses due to damages to poles and  lines down, etc. Those two things combined have contributed to  better restoration times than we have had in prior storms.

Although the pandemic continued to wreak havoc on all aspects of our lives here and around the world,  Rio Grande  took a dedicated approach to ensure that the people, the technology, and the materials were available to continue to operate and maintain the Co-op’s  infrastructure. This  brings me to another highlight that I cannot stress enough – that is the materials alliance with Texas Electric Cooperatives, and the benefit it has provided.  During the pandemic related labor, and raw material shortages, as well as through international events such as the Suez canal debacle, the global supply chains were severely impacted, making it almost impossible to source materials in a timely manner. TEC maintained strong communications with us and ensured that our materials procurement was not impacted significantly. Although we did experience some delays, much like everyone else, those were manageable. Rio Grande was  able to ensure the cost of materials did not have  the huge increases most of us experienced at local hardware and building supply  stores.

Last year, I shared with you some of the goals that were set out by the Cooperative’s Board of Directors and management, as part of the  strategic planning session that took place in 2019. I also highlighted how technology was invaluable, in order to provide business continuity and become more efficient in the way we do things on a day-to-day basis. Well, 2021 allowed us to build on that baseline and look at other opportunities to  become more efficient. The Co-op  took on a couple of pilot projects that yielded very positive results. One that I’d like to share is the use of unmanned aerial vehicles, or drones, in order to inspect, analyze and identify problems areas within our system. The inspection results provided not only visual data, but also detailed reports of the issues found in the distribution land transmission lines. These inspections  allowed us to prioritize areas to address, in order to prevent extended outages in the future.  This is another example of how a strategic objective allowed resources to be focused where they would do the most good in helping to deliver safe reliable energy to you.  Staying on the topic of technology and those employees who  work in that department to deliver you the services you need, the positions and expectations of the dispatch department have been elevated. Dispatchers now have additional tools and resources at their fingertips to provide members with better information in terms of outages, and to assist the line crews in the field with narrowing down the areas of concern, or potential areas, affected by a storm or other event.

I have a  couple more items worth noting before I proceed on with some of the latest news and upcoming projects within the Cooperative. First, we were able to secure new insurance policies, which had an increase in premiums of only 3/10 of 1% over the prior year’s policy, and required no changes in coverage. This is extremely important, given what we had seen across the state and across the nation, where insurance policies are concerned. Between the wildfires experienced in the western part of the country, and winter storm Uri, some insurance providers would not reinsure existing policyholders because of the potential risks.  Another highlight related to Insurance and premiums is that Rio Grande  was able to renew health insurance at zero increase in cost to the employees and to the Co-op,  with no changes in coverage. This is another area where significant increases in premiums were anticipated, due to the massive number  of claims and medical visits associated with the pandemic.  We continue to remain vigilant, and look at every opportunity to ensure we are efficient and mitigate any cost increases, to the extent possible.

Now to some exciting news that I’d like to share with you --  We have relaunched and revamped the Rio Grande  website, and I couldn’t be more proud of the outcome!  The website was revamped to make access to information easier, and more user-friendly. We made sure that it  was compatible with multiple devices, including mobile devices.

And finally, I wanted to reiterate what you’ve heard from CFO Shawn Stanley, as well from board president Mr. Billy Foster -- The Cooperative is in a good financial position.  Although we have faced many challenges throughout the last 18 months, we have been able to overcome those, with an emphasis on holding costs down.  Therefore, we do not anticipate having to resort to any rate increases in the near future.

II hope you have enjoyed the content of this year’s annual meeting so far. Stay with us! There is more information to share, prizes to be won,  and the chance to take home the Grand Prize!  Thank you and God Bless!