CEO's Report
Greetings Co-op Members,
I am proud and humbled to be able to report to you on some of the most noteworthy occurrences the Cooperative saw over the course of a very eventful 2021.
The year began with the cloud of COVID-19 still hanging over us, and still impacting the way we conduct day-to-day business, and both internal and external meetings. Rio Grande did relatively well in protecting both members and employees on this front.
Then, in February, the most widespread power crisis in Texas' history took place. Energy infrastructure failure such as occurred during Winter Storm Uri had never been seen before. It is because of this that "Surviving the Storm" was selected as the theme for this year's Annual Report.
According to the Electric Reliability Council of Texas (ERCOT), the Texas power grid was "seconds or minutes away from" complete failure when partial grid shutdowns were implemented. During the crisis, some energy firms made huge profits, while still others went bankrupt. Wholesale energy prices rose from normal levels of about $50 to $9,000 per Megawatt hour. While we did implement load shedding to help preserve the integrity of the grid, Rio Grande was able to spare members the extended outages and extreme billing charges many customers of investor-owned utilities were hit with. Additionally, Rio Grande Electric Cooperative (RGEC)'s Board of Directors opted for RGEXC to absorb a significant amount of the increased costs associated with the winter storm in order to save members the additional expense.
There are not enough adjectives to describe the year from an operational standpoint. Fast, challenging, exciting, rewarding, and visionary are a few words that come to mind. Fast, because the year unfolded at breakneck speed. Challenging, because the sheer volume of work for all departments, and the turnover of employees meant every one of the Co-op’s employees was working at hyper-speed to accomplish their respective missions. The year was both exciting and rewarding, due to the fact that great strides were being made in upgrading the distribution system to enable it to better withstand the rigors of storms. Visionary comes to mind when I recall all that went into the development of a new 4-year Construction Work Plan, in which projects were prioritized, and from which RGEC will operate over the coming four years. This is not to say that there will not be additional maintenance and repair projects, which will be conducted, as necessary.
The number of work orders completed totaled 770. This equates to a 7.89% decrease over the previous year. The work order process has been streamlined and is now fully integrated into the computerized workflow. This enables it to be tracked and helps ensure the timeliness of project completion.
At over 35,000 square miles, Rio Grande’s service territory is larger than many states and larger than some countries. The topography varies from region to region, each with its own beauty and set of challenges. It is in this unique, and often harsh landscape that RGEC maintained 126 miles of transmission line, 9,672 miles of overhead energized line, and 200 miles of underground energized line, for a total of 9,990 miles of energized line. Within this area, 6,941 memberships were served by a total of 14,134 meters. The Co-op’s 158 employees are among the top in their respective fields, and you will never find a more capable or dedicated assembly of professionals.
Rio Grande’s Mission, Vision & Values, and Motto continue to serve as the roadmap for the way we conduct business and are at the heart of every decision we make.
Theresa Quiroz
Interim CEO
Human Resources/Diversified Services
It is of no surprise to anyone what was in store for employers in 2021. The phenomenon, called “The “Great Resignation”, became an ongoing trend as workers looked for better opportunities. According to SHRM (the Society for Human Resource Management), as of December 2021, 4.3 million U.S. workers quit their jobs. Some of the trends the nation underwent were due to employees looking for better compensation, better work/life balance, while others took advantage of the opportunity to apply and fill vacancies at other companies. Although RGEC had its fair share of turnover in 2021, the numbers remained consistent, as in past years, and didn’t quite reflect the increase of numbers due to “phenomenon” trends.
The Human Resources department worked diligently to adapt to ongoing transformation in the work world, as we moved towards managing the workforce in a post-pandemic era. The Department leaned heavily on technology for automated HR processes. These resources, as an example, allowed the option of conducting some of the 169 interviews virtually, through the MS Teams software, and provided the ability to both conduct and attend out-of-town trainings/conferences. Overall, 37 new employees were hired. This not only was more cost-effective, but it allowed us to focus on the employees’ well-being during the high levels of the pandemic encountered during the holidays. Another noteworthy item was that we managed to see a zero percent increase in our employees’ health insurance premium, even due to the massive number of medical visits and claims associated with the pandemic.
The welfare of employees, as well as that of Co-op members, was top priority. Therefore, the Cooperative decided to continue holding the annual meeting virtually, for the 2nd year, for the safety of all. I must say, it was a great success! It was definitely one for the books, as 248 memberships registered! This is one more than RGEC’s largest in-person meeting held in Uvalde, in 2019. The Employee Service Awards were also held virtually, as 14 employees were honored for a total of 135 years of service to Rio Grande and its members. These are huge milestones that can’t go unnoticed. We take pride in the RGEC staff’s accomplishments and always want to share them with you. Did you notice our posts on social media?
Our Communications department, in addition to a vast number of tasks, handles our social media pages. RGEC’s Facebook page recorded a Reach of 113,559, up 107.5% over 2020, and had 18,248 page visits. This is in addition to our posts on Twitter and Instagram. Just to name a few, we highlighted the historic Winter Storm in February, the 76th Annual meeting, and honored our very own Veterans. There was only one retiree to honor, but 2022 already brings us to a much larger group of upcoming retirees. Be sure to keep following us for more highlights!
The new website is also something to be recognized. We decided to give it a complete overhaul and new look! I hope you have had the opportunity to visit us on our new website, as we highlighted over $32,000 in available scholarships and asked for nominees to be the recipients of the Sharing Success Grant Program, in which RGEC and our energy partners, teamed up to provide grants to deserving non-profit organizations in Rio Grande’s service territory. Additionally, the Co-op was also able to donate over $21,000 to 4-H, and other community youth and service organizations within the Co-op’s service territory.
Rio Grande’s motto, “Empowering Communities; Enhancing Lives” is reflective of the 7th Cooperative Principle, which is “Concern for Community”. RGEC is active in supporting communities in the regions it serves because we all live and work in these communities, too. We innately understand the challenges and triumphs of both our rural and more urban areas. The Co-op is owned and governed by those who receive service from it, so all the decisions are made by your peers. The money with which you pay your electric bills stays in Rio Grande’s territory, instead of going to stockholders in some distant state or city. The jobs created are local to our communities. RGEC employees are often found on local committees, and in volunteer positions. Their children are likely raised on the same traditions and values as yours. At Rio Grande, we firmly believe that by working together, we can all accomplish much more – for our communities, our families, and our cooperative. That’s what is meant by “Empowering Communities; Enhancing Lives”, and that’s what a cooperative is all about.
Martha Gerardo
Chief HR and Diversified Services Officer
Technology Department
2021 started dramatically with the Texas power crisis. Rio Grande used its technology and personnel to help stabilize its portion of the electric grid. Rio Grande employed its Supervisory Control and Data Acquisition (SCADA) system along with the dispatch department to meet the load shedding obligation requests to help stabilize and restore the Texas ERCOT power grid. The Technology department also made improvements in technology that helped improve system reliability, safety, and communication. These included installing distribution line sensors, performing aerial drone inspections, implementing smart tags, and switching orders in the Outage Management System (OMS).
In the early hours of February 15th, RGEC started receiving alerts from LCRA regarding the decreasing reserve margin on the Texas power grid. SCADA personnel quickly acted and came to the office to prepare for the real potential of load shedding. At 1:23 AM load-shedding began and quickly ramped our obligation up to 12.5 megawatts of load shedding. This was an unprecedented situation facing our company and membership. We carefully examined our existing feeders and resources and started rotating load amongst our distribution feeders in the Texas system. This provided rotational blackouts to members and kept power on for blocks of time each day.
During the nearly 71 hours the Texas power crisis lasted, technology personnel shed a total of 518 megawatts, provided a total of 139 load shedding and feeder restoration operations, and provided an average of 46 feeder restorations per day. While the first night was a bit overwhelming, we were very pleased to provide rotational load shedding by bringing power in and out for periods each day. In the town of Brackettville, the major investor-owned utility dropped the power for the entire duration of the EEA Level 3 crisis plus took an additional 12 hours to restore power to the City of Brackettville. RGEC was able to have its load shedding feeders fully restored by 11:20 PM on Wednesday the 17th.
Throughout the Texas power crisis, the Dispatch department came through and clearly demonstrated their growth. Dispatch, using the real-time outage status in OMS and smart tags in the system, was quickly able to advise SCADA personnel whether the feeders were clear, allowing safe restoration. The real-time outages were reported to the Public Utility Commission every eight hours during the crisis, and outage information and outage graphics were available to RGEC personnel through AppSuite on their iPads. Dispatch also provided 26 predicted distance to fault location maps to the line crews during this time. Distance to fault uses the outage fault values in SCADA and the circuit information in the system model to predict in OMS where the fault may have occurred. This saved the line crews precious time restoring member outages.
After the Texas power crisis, RGEC installed distribution line sensors to four key feeders on Rio Grande’s distribution system to help improve system reliability. The line sensors record the amperage of any faults that occur on the line and report recurring events. In cases where recurring events take place, SCADA sends the operations department maps of where the recurring events are predicted to occur. The line crews inspect these locations and correct any issues they identify. So far, the line sensors have helped locate and correct several issues. These include lines on the ground, lines off the insulators, broken lightning arrestors, and trees making contact with the lines. There has been a significant reduction in recurring events on the feeders since the installation of the line sensors.
Another avenue through which technology helped improve reliability was through the implementation of aerial drone inspections. Rio Grande deployed aerial drone inspections on two feeders and one transmission line. The inspections provided multiple high-resolution images of each pole. Any issues found on the poles were identified and categorized by severity. This information enabled engineering, operations, and project management to put plans and schedules together to address the issues identified in the inspections.
Improving the Dispatch department’s capabilities was an important goal during 2021. Smart tags and switching orders were implemented in the outage management system. The smart tags allow easy entry and reporting of activities and events the line crews report to dispatch. A few examples of different types of smart tags include crews on location, clearance orders, hot-line orders, etc. Switching orders provide a centralized system for the line crews to safely interact with the distribution system. The switching orders are placed on the RGEC mapping system for quick visual reference using unique colors for each type of tag. With dispatch using the newly implemented smart tags and switching orders, they are displaying real-time events on the map and also creating and recording switching information. Both smart tags and switching orders are helping Rio Grande to improve safety and enhance communication in the Cooperative.
The performance of our personnel and use of the SCADA and outage management systems allowed Rio Grande to do its part in stabilizing the ERCOT Texas grid during the energy crisis. Incorporating distribution line sensors and aerial drone inspections helped improve system reliability and the improvements made with Dispatch and the outage management system with smart tags and switching orders helped Rio Grande improve safety and communication. The performance of personnel and improvements made with technology demonstrate Rio Grande’s commitment to reliability, safety, and communication. All of which help improve the level of service provided to members.
Conrad Dalton
Chief Technical Officer
Specialized Project Development
Periodically, it is necessary to systematically reevaluate the state of the Cooperative’s native electrical system, which serves our members within 18 counties in the State of Texas and 2 counties in New Mexico. This endeavor ultimately results in the determination of the specific system upgrades and electrical facility improvement projects that will be necessary to help assure proper system operation, as well as the delivery of efficient, reliable service.
As a borrower of loan funds from the USDA Rural Utilities Service (RUS) to accomplish such improvements, Rio Grande Electric Cooperative follows structured guidelines to develop a very comprehensive Construction Work Plan (CWP) approximately every four years. This entails the development of a thorough system-wide load forecast based on a study of such factors as current and projected economic trends, weather conditions, and even the effect of such events as a global pandemic. Actual load data coupled with this load forecast data are applied to each substation and distribution circuit to analyze the effect on the system. Power quality issues, such as the occurrences of low voltage, are predicted and analyzed in conjunction with other factors such as frequency and duration of power outages, age and condition of the facilities, and even equipment accessibility. System upgrade and maintenance projects are then conceived to address the identified system issues or problems. With the guidance and professional engineering support of our consultant, combined with the efforts from all of RGEC’s departments, this latest RUS CWP was completed in 2021. This plan, with the goal of maintaining and improving cost-effective electric service to our members, outlines the necessary system improvement projects to be accomplished over the next four years.
In collaboration with RGEC’s main transmission service provider, Lower Colorado River Authority (LCRA), two new permanent substation power sources were designed, constructed, and put into service in Pecos County in 2021.
The new Ft. Stockton 138kV substation was constructed adjacent to and as a replacement for, RGEC’s original 69kV substation (which was constructed in 1955 and retired in 2021). The new substation provides much-increased power capacity and boasts modernized power monitoring, controls and protection equipment, and has provisions for an additional power transformer and multiple distribution feeders. As well, the new Ft. Stockton substation is interconnected to newly constructed 138kV transmission facilities, which were installed as part of an overall transmission grid improvement plan within the ERCOT system.
The new Hayter Ranch 138kV substation was constructed with features very similar to the Ft. Stockton substation and is situated to provide service to several new petroleum/industrial-related loads in the vicinity. These two new substations are now tied together with a common distribution feeder line such that one substation can completely “back up” the other substation, should the need arise. These new substations and distribution line facilities provide service to members located generally in the Ft. Stockton area including the Balmorhea, Saragosa, and Coyanosa vicinities.
A major modernization project was completed at the Carrizo Springs substation in Dimmit County. Various system improvements and several reliability enhancements were performed, which included a major upgrade of the voltage regulation equipment. Coupled with the system improvement project completed at the Crystal City substation in 2020, these efforts combine to increase reliability, reduce power outage times and improve overall service to the members primarily located in Dimmit County, southern Zavala County, and northern Webb County.
Three major architectural and facility improvement projects were completed in 2021.
Subsequent to the office relocation of, and initial building improvements to the new El Paso office in 2019, a major “Phase II” building renovation and construction project was accomplished through the architectural design, planning, and construction management efforts of RGEC’s Project Management and Engineering staff. This entailed the reconfiguration and interior construction of facilities primarily to accommodate the Operations, Technical Services, and Information Technology departments while providing training and meeting rooms, as well as much-needed additional office and storage space.
Progressing with RGEC’s initiative to provide an improved member experience at area offices while providing an enhanced work environment and increased security for employees, two office renovation projects were completed in 2021. With construction oversight and planning provided by RGEC’s Project Management personnel, the lobby and customer service representative sections of the Carrizo Springs and Brackettville area offices were completely renovated and subsequently updated with fresh interior decoration.
Larry Powell
Chief Specialized Project Development Officer
Operations Department
No other group knows or understands better how, and to what extent, Winter Storm Uri directly affected the operations of Rio Grande Electric Cooperative. The professionalism and expertise of the Operations Managers and their dedicated crews helped prevent the extended outages experienced by many consumers outside of RGEC’s service territory. However, the work the Operations department conducted in 2021 really had relatively little to do with the winter storm. There were 51 other weeks in the year, in which it was work as usual - maintenance, system improvements, and restoring individual outages. Operations remain on the job 24/7/365.
The following is a brief overview of the activities, by operations area, over the course of 2021:
| Alpine | January to June | July to December | Total |
|---|---|---|---|
| Number of Linemen | 8 | 7 | – |
| Miles Driven | 1,112,671 | 92,847 | 1,205,518 |
| Outages | 458 | 623 | 1,077 |
| Meters Connected | 62 | 83 | 145 |
| Meters Reconnected Idle | 33 | 16 | 49 |
| New Construction | 17 | 25 | 42 |
| CIAC Work Orders Completed | 18 | 15 | 33 |
| System Improvements | 1 | N/A | 1 |
At 1,205,518, the miles driven in the Alpine Operations Area is a noteworthy statistic. That’s because it serves Brewster County, the largest county in the state, with an area of 6,192 sq. miles, which is over three times the size of the state of Delaware and over 500 sq. miles bigger than Connecticut. Not only does this operations area cover Brewster County. It also maintains service in Presidio County (3,857 sq. mi.), and Jeff Davis County (2,265 sq. miles). The terrain encompasses both rugged mountains and desolate desert. It is freezing cold in the winter and scorching hot in the summer. This is not country for the faint of heart. The setting of nearly every pole means digging into rock. Crews often must have bulldozers pull the digger and service trucks up mountains, in order to conduct their work, because normal vehicles just can’t make the climb.
System improvements in the Alpine Operations Area in 2021 under the watchful eye of Area Operations Manager Shane Trussell included Panther Junction to Rio Grande Village upgrading of poles, and design changes; and the rerouting of the Fort Ranch line, which included the installation of approximately 140 poles, cross arms, and associated hardware, as well as regular system repair, maintenance, and right of way clearing.
| Brackettville | January to June | July to December | Total |
|---|---|---|---|
| Number of Linemen | 13 | 12 | – |
| Miles Driven | 51,111 | 185,616 | 236,727 |
| Outages | 698 | 846 | 1,544 |
| Meters Connected | 130 | 51 | 181 |
| Meters Reconnected Idle | 27 | N/A | N/A |
| New Construction | 15 | 28 | 43 |
| CIAC Work Orders Completed | 36 | 18 | 64 |
| System Improvements | 6 | 2 | 8 |
The Brackettville Operations Area, headed by Area Operations Manager Daniel Garza, is possibly one of the most varied in the RGEC system. A large portion of service connections are residential, including Fort Clark Springs, a housing and recreational community in Brackettville. Representing the “Seasonal/Recreational” classification are numerous hunting ranches, fishing camps, and recreational vehicle pads in this popular region for outdoor enthusiasts. RGEC’s military privatization contract at Laughlin Air Force Base is also primarily serviced by line crews based in the Brackettville Operations Area.
A major system improvement highlight in this area is the Fawcett Tap project, which included replacement of approximately 14 miles of line from the Comstock Substation to the Dolan Creek area. It required the replacement of approximately 200 poles and associated hardware. As you can see from the photo, some of the miles were more vertical than linear.
| Carrizo Springs | January to June | July to December | Total |
|---|---|---|---|
| Number of Linemen (Dell City/El Paso) | 11 | 14 | – |
| Miles Driven | 34,605 | 201,046 | 235,651 |
| Outages | 861 | 1,032 | 1,923 |
| Meters Connected | 5 | 78 | 83 |
| Meters Reconnected Idle | 71 | N/A | N/A |
| New Construction | 58 | 26 | 84 |
| CIAC Work Orders Completed | 6 | 3 | 9 |
| System Improvements | 80 | N/A | N/A |
The Carrizo Springs area continues to be one of the fastest-growing areas within the RGEC system. Servicing oil and gas interests, as well as a booming housing industry, primarily in the Eagle Pass area, keeps Area Operations Manager Mark Byrom and his crews extremely busy. In addition to the commercial and industrial loads, the Carrizo Springs Operations Area is also home to the Wintergarden area of Texas, in which agriculture is a large component.
Some of the system improvements in this area included the replacement of approximately 100 poles, cross arms, etc. serving the La Pryor area and the upgrading of the Carrizo Springs Substation to accommodate future load.
| Dell City | January to June | July to December | Total |
|---|---|---|---|
| Number of Linemen (Dell City/El Paso) | 15 | 15 | – |
| Miles Driven | 82,589 | 69,069 | 151,658 |
| Outages | 656 | 734 | 1,390 |
| Meters Connected | 55 | 20 | 75 |
| Meters Reconnected Idle | 18 | 24 | 42 |
| New Construction | 11 | 25 | 36 |
| CIAC Work Orders Completed | 11 | 7 | 18 |
| System Improvements | N/A | N/A | N/A |
Area Operations Manager Catarino “Cat” Aranda and linemen from the El Paso Operations Area maintained this challenging portion of the RGEC system, which reaches across the state line, to serve members in the two New Mexico counties of Eddy and Otero. The NM areas are primarily mountainous, including Guadalupe Mountains National Park, the Sitting Bull Falls Recreation Area portion of Lincoln National Forrest, Brokeoff Mountains Wilderness Study Area, and the town of Queen. This region sees harsh storms and strong winds. In Texas, this service area extends west towards El Paso, and south to near Van Horn. As you can imagine, this area was hard hit by the winter storm. Lines were loaded with ice and snow, causing poles and lines to snap in numerous locations. With such extensive damage, RGEC crews, as well as contractors, worked literally day and night to conduct repairs.
| Fort Stockton | January to June | July to December | Total |
|---|---|---|---|
| Number of Linemen | 6 | 4 | – |
| Miles Driven | 144,071 | 123,208 | 267,279 |
| Outages | 716 | 799 | 1,515 |
| Meters Connected | 38 | 11 | 49 |
| Meters Reconnected Idle | 10 | 6 | 16 |
| New Construction | 6 | 31 | 37 |
| CIAC Work Orders Completed | 6 | 6 | 12 |
| System Improvements | 1 | 5 | 6 |
Line crews in this area, under the watchful eye of Area Operations Manager Gavin Forst, conducted System Improvement projects to improve system reliability and help harden the system against storms. Some highlight projects included: 406-1 Pole exchange - Holmes Ranch to Hwy 90 towards Dryden; Feeder 2 on substation 406 saw a total of 67 poles/cross arms being replaced, and the clearing of approximately 8 miles of previously inaccessible right of way. Replacement of approximately 14 miles of line serving Dryden and surrounding areas in Terrell County. This included replacement of approximately 180 poles, cross arms, and lightning arrestors.; Fort Stockton Substation upgrades including three outbound feeders, circuit breaker, and regulator bank to increase the capacity of the substation to serve load growth in the existing Fort Stockton service territory. the load capability was increased from 10 MW to 30 MW, which will provide increased capacity for future industrial loads. With the completion of the new substation, the old substation was demolished, including all structural steel, bus work, and the removal of the power transformer for relocation. Four and one-half miles of new single-phase line in Crockett County, along CR 406 was constructed, and an additional 1.5 miles of new single-phase construction, also in Crockett County, was built for a new service location. Additionally, construction of the new Hayter Ranch Substation west of Ft. Stockton, increased the capacity towards Balmorhea and the surrounding areas.
Information Provided By Area Operations Managers:
Shane Trussell, Alpine; Daniel Garza, Brackettville; Mark Byrom, Carrizo Springs; Catarino Aranda, Dell City; Armando Hernandez, El Paso; and Gavin Forst, Ft. Stockton; and Sr. Operations Manager Steve Wright, Project Manager Julisa Luna, and Project Director Abraham Velasquez
Military Utility Privatization
As part of RGEC’s Privatized Utility contract for Ft. Bliss, regular maintenance and upgrades are required and an important aspect of ensuring a reliable and efficient electrical system. Part of this maintenance includes the Removal and Replacement projects throughout the installation, which included over 200 poles, supporting assemblies, and LED light conversions. These replacements have exchanged aged, damaged and worn infrastructure, which in turn provided the installation with a more secure and efficient electrical system.
Although the final energization date of the North Bliss Substation was not until early 2022, construction of the new North Bliss Substation was complete in December of 2021. Throughout this process, RGEC continued to work with ElPaso Electric, in coordinating access onto the installation, delivery of materials, and all required approval documentation. With the new North Bliss Substation constructed and operational, this allows 2 additional points of delivery into the distribution system, that will provide increased redundancy and resilience of electrical service in the main cantonment area.
With a rapidly expanding mission, a new Fort Bliss Blood Processing Center was proposed to provide blood components and patient therapeutics to not only Fort Bliss but also the greater El Paso area. For this new facility, RGEC installed over 1,800 feet of new underground 3-phase electrical service and a new 500kVA pad-mounted transformer. Switching capabilities were also installed in this location to ensure reliable and redundant electrical service.
At Laughlin Air Force Base, RGEC completed the conversion of approximately .51 miles of overhead infrastructure to underground infrastructure along Laughlin Drive and replaced 0.06 miles of existing underground infrastructure that feeds the LAFB Commissary. RGEC also began the overhead to underground conversion of the electrical infrastructure along 4th street totaling 1.07 Miles.
RGEC Installed 35 new LED walkway lights along near the Child Development Center and track field to provide enhanced security for LAFB personnel utilizing the walkway path.
Fifteen new LED streetlights were installed along Laughlin Drive as part of Laughlin Air Force Base’s Lighting initiative.
RGEC is proud to support Ft. Bliss and Laughlin AFB in their respective missions.
Accounting & Finance
Power Markets
The Co-op negotiated and contracted early on to avoid risks. We were not purchasing power on the open market, so the Co-op was not exposed to the extreme $9,000 market price during Winter Storm Uri. The early negotiation and contract saved the Co-op and its members around $40M.
Purchased Power Costs
Purchased power costs and related transmission delivery costs increased 5.47% from $26.8M to $28.3M. ERCOT service charges incurred during Winter Storm Uri of $2.7M are included in 2021. The generation assets in Texas were substantially impacted by freezing temperatures in February 2021, and as a result, ERCOT incurred high costs to stabilize the grid to continue to supply power to most of the state. The average cost of purchased power per kilowatt hour (kWh) increased 16.4%, mainly due to Winter Storm Uri.
Distributed Generation – Solar Power
Sites were selected, and agreements finalized for the construction of the 11 solar sites connected to the Co-op’s distribution system. Generation will be delivered directly to the membership. This project provides land lease revenue to local property owners, increases local property tax revenues, and is in line with Cooperative Principle # 7, Concern For Community. Target completion date is early 2023.
Energy Sales & Revenues
The first quarter of the year was the lowest at $11.1M and the third quarter was the highest at $15.6. Total energy sales decreased 9.2% during the year, from 465 to 422 million kilowatt hours (kWh). Meters increased from 13,914 to 14,134. Operating revenue from all sources amounted to a total of $59.8M and margins of $6.0M for 2021.
Operating Costs
Total operating costs, excluding power costs, increased 8.04% from $24.1M to $26.0M. Winter Storm Uri played a major role in this increase, with additional maintenance work at substations and inspection of lines to keep facilities operating efficiently.
Capital Expenditures
The Co-op collected $3.3M in contributions in aid of construction and internally funded $20.5M of utility plant construction, improvements and general plant additions during the year. Total net utility plant assets grew to $120.4M at year-end.
Borrowing & Financing Activities
$1.7M was applied to the regularly scheduled payments. Long-term debt was $37.6M at year-end and the average interest rate has not changed at 3.62%.
Final Note
The Co-op continues to be in a strong financial position. The diversified revenue mix performed well in 2021 and is expected to continue this trend. Large power accounts contributed 38.4% of total revenues, while residential accounts were at 27.5%.
The independent accounting firm of CliftonLarsonAllen, LLP, audited the Cooperative’s 2021 financial statements. The auditor’s report and complete financial statement audit report is available on our website.
Kilowatt-Hour Sold & Operating Revenue
Meters & Miles of Line
Where Your Money Came From
Where Your Money Went
Balance Sheet
| Item | Prior Year: 2020 | Current Year: 2021 |
|---|---|---|
| Net Utility Plant | $114,898,221 | $120,398,240 |
| Invest. In Assoc. Org. | $23,938,754 | $24,134,044 |
| Current & Accrued Assets | $33,265,712 | $41,505,105 |
| Deferred Debits | $3,537,423 | $10,125,655 |
| Total | $175,640,110 | $196,163,044 |
| Total Margins & Equities | $83,543,034 | $88,506,045 |
| Long Term Debt | $38,881,227 | $36,932,410 |
| Current & Accrued Liabilities | $8,837,580 | $10,256,770 |
| Deferred Credits | $44,378,269 | $60,467,819 |
| Total | $175,640,110 | $196,163,044 |
Statement of Operations
| Item | Prior Year: 2020 | Current Year: 2021 |
|---|---|---|
| Electric Power Revenues | $51,963,520 | $53,239,371 |
| Other Revenues | $6,815,759 | $6,521,068 |
| Total Operating Revenues | $58,779,279 | $59,760,439 |
| Purchased Power | $26,849,616 | $28,317,519 |
| Operations & Maintenance | $11,608,933 | $13,371,519 |
| Consumer & Customer Svc. | $1,213,031 | $1,206,768 |
| Admin. & General | $4,323,975 | $4,512,508 |
| Depreciation | $5,351,380 | $5,476,524 |
| Taxes | $10,262 | $10,802 |
| Interest | $1,599,492 | $1,465,045 |
| Other Deductions | $19,513 | $23,060 |
| Total Expense | $50,976,202 | $54,383,634 |
| Operating Margins | $7,803,077 | $5,376,805 |
| Non-Oper. Reve. – Interest | $530,919 | $169,945 |
| Non-Oper. Margins – Other | $180,061 | $18,057 |
| Other Capital Credits | $296,162 | $387,602 |
| Total Margins | $8,810,219 | $5,952,409 |
Board President's Report
As I reflect back on 2021, I am reminded of all the hard work the employees at Rio Grande put in every day to make sure we had electricity. I am proud of their continual dedication and willingness to serve no matter the weather or conditions. Also, it is an honor to serve with the other board members and their desire to always do what's best for the Cooperative.
For the past couple of years, we have been consumed with the pandemic affecting the Co-op, as well as our personal lives. The board is updated monthly with all current cases within the Co-op, as well as any new mandates that will, or might affect us at the Co-op. As these numbers continue to decline, we are cautiously hoping to see our lives and the Co-op return to normal.
We continue to serve Ft. Bliss and Laughlin with their infrastructure, making sure to stay up-to-date with new technology and progressive ideas to maintain a positive working relationship with both bases. These contracts continue to provide a very positive revenue stream for Rio Grande.
In February, the state was hit with a freeze that impacted the entire state and caused a strain on the electrical grid that has never before been seen. RGEC's management team worked together to relieve the strain on the grid by coordinating with transmission providers in the use of rolling blackouts to prevent the implosion of the grid, thereby protecting members from an extended outage. The board was updated by the Technology department, highlighting SCADA and Dispatch's involvement to manage outages, communications, rolling blackouts, and RGEC's load shedding requirements of a maximum 12.5 megawatts. This was done to assist with the stabilization of the Texas Electric Grid. While we did have downtime, we fared much better than other electric providers in the state. We were also able to shield our members from the astronomical bills that many consumers in the state saw as a result of the electric pricing during Winter Storm Uri, which was due to a foresight in the contracting of wholesale power.
At the September 15, 2021 board meeting, after careful consideration, the board of directors approved a four-year construction plan for the years 2022 to 2025. The plan sets priorities for repairs and replacements to the current system. This is vital to keeping your electricity running. The fourth quarter of 2021 saw the trend of an increase in the price of Rio Grande's supplies and materials, as well as everything in our personal lives. Rio Grande's management team worked hard to address the most crucial repairs and new construction while staying within budget. Because we do not know what the future holds with regard to pricing, this may cause delays on some projects, but they will be completed.
The scholarship program for High School Seniors and Continuing Education applicants is something that we are very proud of. In 2021 we have 27 scholarships for a total of $31,500. Helping our youth is something that RGEC and your board feel very strongly about. The scholarships provided for our youth are generated from unclaimed Capital Credits.
The theme of this report is "Surviving the Storm". That is just what we did, and will continue to do, all the while considering and putting RGEC's members' needs foremost. On behalf of the Rio Grande Electric Cooperative Board of Directors, I can tell you that we have a great team, and no matter what kind of storm comes along, you can rest assured that we will survive it.
