CEO Theresa Quiroz thanked members for virtually attending and joked that she knew everyone was waiting on the prize drawings, but that the Co-op was going to fill them in on actual RGEC news in between the drawings.
In her opening statements, Ms. Quiroz said, “In March of 2022, I became Interim CEO, and CEO July 20, by resolution of the board of directors. Now, with over a year’s worth of CEO experience under my belt, I can absolutely state that this is one of the toughest, but most rewarding experiences of my life. It rates right up there with being a Mom. Parents, you know what I’m talking about. It is always worth the extra effort.
As with raising kids and growing crops, we are always striving to “Cultivate Success” at the Cooperative. We do everything we can to make sure our children are happy, healthy, educated, ethical, and successful in their endeavors. If we can cultivate well-rounded, honestly “good people”, then we have accomplished something. The farmers and gardeners among you know that cultivating a successful crop of any type involves more than just sticking the seed in the soil and hoping it grows. You must prepare the soil, fertilize it, irrigate, and defend it from pests, in order to ultimately have a successful harvest.
“Success” at Rio Grande consists of many facets. It’s a delicate balance of many things, all geared to culminate in overall success. Success in business usually means financial success – and financial success is important -- but in a Cooperative, there are many other factors to consider, as well. 1 of the main ones is member satisfaction – and no, it’s not possible to lower your rates, though we are doing everything in our power to hold the line on them at a very difficult time.
As we delve into some of the projects and processes over the past year, you’ll be able to see that Rio Grande has, and continues to “Cultivate Success”, for the overall benefit of the members of today, and those of the future. Success doesn’t happen overnight, and it doesn’t happen by accident. Like children and crops, it has to be nurtured.”
In 2022, RGEC applied for funding in the amount of $42,890,000 in USDA Rural Development Funds for the 4-Year Construction Work Plan. The application was approved and we were notified this spring. This Rural Development investment will be used to connect 702 consumers and build and improve 383 miles of line. The loan includes over $3.9 mil. in smart grid technologies. The funding, available at a very favorable interest rate, allows Rio Grande to undertake multiple large-scale projects at the same time, without having to wait for funding from other sources. It also allows the Co-op to implement system improvement projects now, without having to deplete cash reserves.
The rebuilding and upgrading of lines and substations are a high priority in the Construction Work Plan and are slated for 2024 in various regions of RGEC’s service territory. A few examples include:
- Comstock to the Pecos River, in Val Verde County
- Old Pioneer Rd. to FM 1021 in Maverick County
- South of Uvalde Substation, in Uvalde County
- Terlingua Ranch Subdivision and South Brewster County
- Pat Lee Substation Southeast and Mitchell #1 Airport in Crockett County, and
- Gentry Rd. to Broadway, and FM 2317 South of Cornudas Substation, in Hudspeth County.
In 2022, it became clear that RGEC had outgrown the Fort Stockton location on Ellyson Drive. The Co-op was fortunate to acquire new property at a good location when an oilfield company shut down. The property was ideal for RGEC. It already had offices, warehouse space, fuel pumps, tanks, mechanic bays, and more. The Open House and ribbon cutting for the new office at 1054 Gonzalez Loop, was held on January 17. Members, employees, and the board of directors gathered to celebrate. “We were especially moved by Area Operations Manager Gavin Forst’s statements to the crowd,” Quiroz said.
A video of Mr. Forst was presented, in which he explained why the facility was important not only to the Rio Grande business, but members, as well. Ms. Quiroz continued, “I couldn’t have said it any better myself, Gavin.”
“I don’t have to tell you what the effects of inflation are doing to us all,” Ms. Quiroz stated. She discussed a recent report .“What this tells me,” she said, “is that prices have been overly high for the past 2 years, and they are continuing to trend upward.” The effects of inflation were discussed, including fuel prices. Inflation doesn’t just affect fuel prices, though fuels are a major consideration, because the Co-op has a fleet of 169 vehicles, which collectively covered over 2,063,000 miles last year and purchased a total of 117,598 gallons of bulk diesel. RGEC was paying about $2.64 per gallon for bulk diesel in 2021. In 2022, it was $3.19, and as of June of this year, it had gone up to $3.61. This is a 20.8% increase from 2021 to 2022 and a 37.9% increase through the 1st 6 months of 2023. This pricing is from RGEC’s Brackettville location. Diesel costs more in areas like Alpine and Fort Stockton.
Bulk Diesel Prices
2021 - $2.64 per gallon
2022 - $3.19 per gallon
June 2023 - $3.61 per gallon
Ms. Quiroz explained that the price of poles has increased from 50-70%, depending on the size and composition. She explained that everything from office supplies to transformers and conductors have gone up from the cost of the materials themselves, and in the shipping cost to get them to where they need to be. She said she was not sure exactly why the Co-op experienced such long lead times in receiving orders. She explained that RGEC has also had supply chain issues, as the Co-op has to depend on manufacturers from overseas for some things, such as technology-related items. Delays can affect members, as construction projects may be stalled pending necessary supplies/materials.
The benefits of Rio Grande’s new Texas Electric Cooperatives Materials Alliance were discussed, and Ms. Quiroz explained that price increases would have been much larger, had it not been for the alliance.
Power supply was discussed, with Ms. Quiroz explaining, “Over the past 2 years, there have been instances, other than ice storms when the Texas grid was on the brink of power shortages. She reminded members of the video she posted to RGEC’s social media in June discussing the projected tight summer power supplies. She explained that the Texas grid broke records 11 times in 2022, and experts were predicting a hotter-than-normal summer, and warning of potential power shortages early this spring.
Ms. Quiroz explained the causes contributing to the problem. 1st, Texas’ population growth. According to the US Census Bureau, ’The population of Texas, increased by 470,708 in 2022, continuing a steady uptick. From 2000 to 2022, the state gained 9,085,073 residents, more than any other state and almost 3 million more than Florida, the next largest-gaining state.’ All these people use electricity.
Secondly, the problem is that the growth is faster than the state is adding reliable generation sources. Older and less efficient generation plants have been taken out of service, in an effort to curb emissions. More solar and wind generation has been placed in service, and they do contribute to the overall power supply – when conditions are right, but they are not consistent. Solar only generates power when the sun is shining, and wind only generates when the wind is blowing between about 10 mph - 50 mph. In August, ERCOT, called for conservation from 6-9 PM, instead of 3-7 PM, as in the past, because the additional power generated by solar and wind died down during this time.
Regarding wholesale power, Ms. Quiroz stated, “Rio Grande has wholesale power contracts for an adequate supply of power for our members. This is how we are able to shield you from the majority of the drastic price swings on the open market. However, because adequate supplies of power cannot be stored when generation is at its peak, there may not be an adequate supply in the transmission system at some point in time. Rio Grande, like other utilities, might not be able to get power, if there is no power on the market to access. This is why it is important to continue to heed the calls for conservation.
Co-op members used less energy per household during last summer than in some previous years. A chart depicting 3 years of residential energy usage was displayed. CEO Quiroz explained that, though 2022 was a very hot summer, members consumed fewer kWh of energy than in 2020. She thanked those who conserve energy when requested.
RGEC’s solar arrays are all online, and performing as expected. Quiroz explained that delays in receiving equipment postponed the commissioning of the sites until late June 2023. She related that RGEC is seeing positive results. From installation through mid-September, the combined output was a Net of over 7,244,000 kWh. Preliminary estimates were that the arrays would save about $8 mil. over the 25-year life of the equipment. With increases in wholesale power costs, the actual amount saved could be significantly higher. “This is another way we are cultivating long-term success at Rio Grande,” Ms. Quiroz stated.
2022 began with an ice storm. Though the damage wasn’t as extensive as previous storms, it took out poles and equipment in RGEC’s northern and western service territory. “Then there are the “garden variety” thunderstorms which strike at will, any time we are blessed to get some rain,” Ms. Quiroz stated. “Any 1 of these storms is capable of containing straight-line winds or a microburst. People equate storm damage with tornadoes, and we have had those, too, but storm-driven winds and microbursts can be every bit as damaging to our distribution system as a tornado. The National Weather Service says straight-line winds are thunderstorm winds that have no rotation, both straight-line winds and microbursts can contain winds reaching over 100 mph, which is equivalent to an EF-1 tornado. Regardless of the type of pole used, anything in the path of these storms is going to suffer damage. Rio Grande’s system is designed, built, and maintained to meet or exceed USDA Rural Utilities Service standards,” she explained.
“In 1 of the most unusual outages experienced lately, a train took out a line. Yes, I said a train!” exclaimed Ms. Quiroz. “What started as storm damage in the Van Horn area turned into a massive outage with 21 poles downed. The 1st downed pole was due to the storm. Then, in typical ‘it could only happen to Rio Grande’ style, the line from downed pole #1 was snagged by a passing train, which took out another 20 poles,” she said. Meanwhile, also near Van Horn, a motorist crashed into a pole, causing another outage. Contractor crews were called in to assist Co-op crews, due to the volume of damage in this area.
“This seems like the perfect segue to introduce you to the operations manager for the Dell City Area– the guy now charged with ‘train proofing’ lines, Rocky Vindiola,” Ms. Quiroz said. Vindiola took over Dell City operations on May 1, after being RGEC Construction Superintendent. “He and his wife are really enjoying being a part of the Dell City community, and he looks forward to helping improve the infrastructure of the area,” Quiroz said.
Ms. Quiroz introduced another new area operations manager, Julissa Luna, who was promoted to Laughlin Air Force Base Area Operations Manager. This is a new position, created as the scope and volume of work at the base intensified. She became very knowledgeable about the LAFB system in her former capacity as project manager.
“Martin Flores was promoted to Senior Operations Manager (In Training). He is currently acting as the ‘understudy’ to long-time Sr. Operations Manager, Steve Wright, who will be a tough act to follow, but Martin is well prepared,” said Quiroz. Flores has held the following positions at RGEC: Apprentice Lineman, electrician, electrical foreman, Technical Services Supervisor, Manager of Technical Services, and Supervisory Control and Data Acquisition (SCADA) Systems Specialist. “Rio Grande and its members are now, and will remain in very capable hands for years to come,” Ms. Quiroz reassured.
In concluding her address, Ms. Quiroz stated, “I could go on and on about the various components that go into making Rio Grande what it is, and what it is destined to become. I hope that by giving you an overview today, you’ll see that we continue to nurture and grow the Cooperative, to make it operate as effectively, efficiently, and economically, as possible. In the final analysis, we strive to cultivate success in the form of a thriving future for Rio Grande and its members.”