Manager’s Message – August 2022
The annual meeting is scheduled for 6:30 p.m. Thursday, September 8 at our Portola office. We will broadcast the meeting via our YouTube channel. To join the meeting, visit our website and click the link in the banner at the top of the page or watch the meeting via YouTube live. To join by phone, call (817) 900-9005 and enter access code 874 467 9739.
We encourage members to send questions in advance by email to firstname.lastname@example.org or with the form included in your voting packet. We will also take questions through the chat function during the meeting.
The year 2021 was a challenging but productive year for Plumas-Sierra Rural Electric Cooperative and Plumas-Sierra Telecommunications.
The dominant events of last year were the two mega-fires. The Beckwourth Complex burned parts of the town of Doyle, a good portion of our distribution system in that area and nine miles of our fiberoptic line. The Dixie Fire caused significant damage further north from Herlong to Milford, Janesville, and Gold Run. It also burned both of PG&E’s feeds to our region, and due to the delays in PG&E rebuilding, the fire also led to our power supply being unavailable for 150 days.
PSREC built a 6-Megawatt cogeneration facility that came online in 2010 and went through a significant rebuild in early 2021. It came back online just in time to support our system during the fires. We also rented two 2-Megawatt diesel engines and were able to keep the lights on for the 150 days.
The efforts of our electric and telecommunications crews was simply outstanding, and our SCADA crew was often sleeping in the SCADA room to keep the lights on. We would also like to thank NV Energy for doing a great job with our backup line. PSREC continued its increased vegetation management and removal of hazard trees on the system to improve reliability and fire safety. We appreciate the increased cooperation from members on this key reliability and safety issue.
We have run our system on single-shot during high fire seasons for years now. Single shot means if a fault is detected, the line is shut down. This prevents our equipment from trying to reclose or re-energize, decreasing the risk of a limb or debris in the lines igniting. Single-shot settings during the fire season do mean longer outage times so crews can fully investigate and patrol the lines before re-energizing. We appreciate your patience, but we need to do this to prevent catastrophic wildfires.
PSREC has continued to improve system reliability and response times through its supervisory control and data acquisition system. We are also working hard to develop alternative power supplies from the east for our entire system to help mitigate the impacts of public safety power shutoffs by PG&E and NV Energy. Due to the recent fires, we expect NV Energy to disconnect power more often in the next several years, including the 2021 fire season.
If PG&E has also disconnected their power to prevent fires, we will be out of power until one of our sources is back online. Members should be prepared for outages, some of which could be several days.
PSREC sends outage notifications via email and text messages. To sign up for these notices, log into SmartHub on our website and visit the Manage Notifications section to select the alerts you want to receive. If you need assistance, call us at (530) 832-4261.
Transmission costs from the California Independent System Operator and PG&E increased significantly at the first of the year. We will be talking about our efforts to get away from the PG&E system in the months and years to come, but for now, we are stuck with PG&E passing on increasing transmission costs.
Another factor is that for several years we have been carrying over savings from the previous year’s power costs to offset higher rates. We carried more than $1.15 million from 2020 to 2021, but in 2021, we were hit with the impact of the Dixie fire and much higher power costs, and there were no savings to carry over. If there hadn’t been a carry-over from 2020 to 2021, there would have been a rate increase in 2021.
Another significant event is the proposed closure of the State of California Department of Corrections and Rehabilitation California Conservation Center (CCC). The loss of CCC is a blow to our local economy in general and to the cooperative. Large electric loads like the state prisons help spread the cooperative’s fixed costs over a wider base. Losing these loads means the rest of the membership must absorb the fixed costs CCC has been paying.
These events alone will
combine to increase our costs by $2.25 million per year alone. In addition, general inflation has hit the cooperative’s construction and operating costs, raising the price of fuel and all basic materials.
Lastly, we also have the ongoing impact of the drought. We get most of our hydropower from the Western Area Power Administration, who sells power from the main four federal hydro-projects that are part of the Central Valley Project. Of the four reservoirs, only Folsom, the smallest, has above average water levels. The largest, Shasta, has half of its normal water. PSREC pays the same for federal hydropower no matter
how much is delivered. We are paying for the power that isn’t there, and we then need to shop in the market for replacement power. And this year, energy costs in general have risen dramatically in price. This is approximately an additional $1.5 million for this year.
We are seeking recovery for the damages from the Dixie Fire from PG&E, as well as FEMA. Recovery of these funds won’t change the need for a rate increase.
Information on the rate meeting with the members will be inside your annual meeting package. The date of the rate meeting will be Tuesday, August 30. Details about the rate meeting will be included in the Annual Meeting information.
In the face of these issues, your staff and board have been quite active. Some of you are aware we are working to build a new interconnection with NV Energy in the Nevada desert that should give us some relief from the California power markets and transmission rate increases, but that project is several years from completion. The costs of construction should be nicely offset by transmission and generation savings. We strongly believe building to the east will keep rates lower than they would be otherwise and will minimize power shutoffs.
We are also partnering with our subsidiary, PST, on joint or hybrid projects where PSREC automates more of its system while PST rents capacity from PSREC, bringing broadband to the members and reducing the cost of automating the electric grid. PST’s grants from the CPUC also support better control of our electric grid. Last year, we were able to expand to more than 900 households.
We have also been pleased with the financial performance of our subsidiary. PST shares expenses with PSREC and saved more than $500,000 in 2021 and will again in 2022. In addition, PST was profitable in 2021, cash-flow positive last year, and should be profitable and cash flow positive for 2022. PST has received grants from the California Public Utilities Commission, as well as an earmark in the federal budget thanks to Congressman Doug LaMalfa.
COVID-19/Physical Security Audit
We have partially reopened our office in Portola. Appointments are available, and when you make an appointment, we will inform you of any masking requirements applicable at that time. We are also open for drop-in appointments through our window by the front door. The cooperative has recently had a physical security audit from the CPUC and will be doing a minor remodel for its lobby to stay on top of the latest requirements, and it will be using the windows and the vestibule to serve customers for now.
Despite all the challenges, PSREC continues to be financially strong and remains committed to providing excellent and reliable service to our members.
We hope you will join us at 6:30 p.m. Thursday, September 9 for the annual membership meeting.
PSREC Board President