2016 Financial Report
The 2016 financial reports are presented on a consolidated basis for Plumas-Sierra Rural Electric Cooperative and its subsidiary, Plumas-Sierra Telecommunications.
The Consolidated Statement of Operations provides an overview of the income and expenses for 2016 and 2015.
One question we received is why rates don’t go down during a wet year. Our primary goal is to keep rates as flat as possible over time. We worked very hard during the drought that just ended to protect our member-owners from higher costs associated with the drought. But this meant we were cutting our margins as low as possible. This meant we borrowed more than if we had raised rates, and our lenders wanted us to build up our financial strength.
Now that the rain and snow returned for a year, we are building up our financial strength and borrowing less. That’s good for us in the long run.
What happens if we have another good run of hydropower? Our primary goal is still to reduce long-term rates, and we will do that by borrowing less from the Rural Utilities Service and cooperative banks.
One of our key long-term projects is the overhaul of our rate structure. With the advent of distributed generation such as small-scale wind and solar, the entire electric utility industry will be offering rates more in line with the true cost of service. This means lower kilowatt-hour (kWh) costs, but higher fixed costs.
We will perform a new cost-of-service study to help guide us on this. We plan to implement any changes slowly to minimize the impact on any specific member of the cooperative. The first rate class affected will most likely be the irrigators.
For anyone planning to move to distributed generation such as wind or solar, we support your efforts. But we also believe this cannot be subsidized by other members. Please talk to PSREC staff for the latest information. For long-range planning purposes, customers should generally plan on seeing a distributed generation benefit that looks more like our wholesale costs today. This is significantly less than today’s kWh fee.
PST posted a loss in 2016, but it was a significant improvement from the previous year. We are happy to report that PST has been adding revenue and reducing costs, and is on track to break even or possibly make money by year’s end. I am very pleased with how well the company is doing, and all the new broadband customers we are adding each month.
We are pleased to report our external auditors, Aldrich CPAs & Advisors LLP, have concluded that the consolidated financial statements present fairly, in all material respects, the financial position of the cooperative and its subsidiary.
Finally, I would like to thank management and staff for their hard work in making PSREC and PST integral parts of our communities and for their efforts to ensure the companies run smoothly and perform well.
Balance Sheet & Operations Statement