The year 2021 began with optimism. 2020 and its’ COVID-19 related mandated quarantines, store closures, and isolation from loved ones in hospitals and nursing homes was behind us. We discovered that the travel restrictions which shut down automobile and air travel led to cleaner air in most cities. Quarantines and store closures brought families together for meals and game nights. Isolation from loved ones reminded us how precious those relationships can be.
Sustainability became the mantra of a new era reflecting everything from power supply to emissions, to personal relationships. The worst was behind us, and we looked to 2021 with optimism.
The it was February. February 14 to be specific. Record-breaking cold swept across the central United States as Winter Storm Uri made its presence felt. The storm delivered an unprecedented and prolonged arctic wave of freezing temperatures, ice, and snow to the central and eastern regions of the US. Everything from the northern US border to Mexico was affected.
Demand peaked as homes and electric-generating facilities competed for natural gas, driving prices to all-time highs. Power plants tripped off and the Southwest Power Pool ordered load sheds for the first time in its 81-year history. Suddenly Dighton, Ness City, and parts of Finney County found themselves plunged into darkness as the temperatures dropped to -20⁰ F. Thankfully, the forced outages only lasted a few hours, and the grid was restored, but the fuel-driven cost of wholesale power had increased to almost six times that of average costs.
Our immediate concern was to lessen the financial impact of Winter Storm Uri on our members and in March 2021 the Board approved a three-year loan from CoBank to cover the added costs. All Lane-Scott members were given a 42-month, interest-free option for any energy usage above the average billing. By the end of 2021, over half of our members had paid back their original Winter Storm Uri billings.
Your cooperative progressed through the year as COVID-19 waned and our new Generac home generator product offering gained steam. Interest rates, fuel, and material costs began to rise so we watched our pennies, and, as always, the dollars followed.
Amid these challenging times, the Lane-Scott Electric Cooperative maintained the fifth lowest residential rate among Kansas cooperatives and about 18% below the local municipal rates: all while keeping your dollars locally and remaining financially strong. We stayed focused on our core business of providing reliable, cost-effective power and finished 2021 with $59,930,131 in utility plant with a total of $35,286,431 in long-term debt. The Cooperative had $18,976,716 in energy sales and an operating margin of $393,295, (a “surplus” of around 2.1%).
The Merriam Webster dictionary defines the word cooperative as:
Mutual assistance in working toward a common goal.
A farm, business, or other organization which is owned and run jointly by its members, who share the profits or benefits.
Cooperatives are non-profit. That’s the way we were founded and that’s the way we continue to operate. If we make more than we need, we pay it back to you, our owners. I am very happy to report that last year the cooperative returned $451,140 of equity to members in our largest capital credit retirement in many years.
Unfortunately, the year ended as it started and on December 15, 2021, a massive windstorm with wind gusts of up to 105 mph raced across most of Kansas. Poles broke and wildfires started in the high wind and drought conditions. Lane-Scott lost hundreds of poles as 1,540 members lost power. Our crews worked long hours, alongside other coops, to restore power as quickly as possible.
We never know what the future holds but we know that as a cooperative we are stronger together as we work toward our common goal of keeping the lights on and the costs reasonable. We continue our commitment to our communities and to keeping local dollars local while we investigate new technologies and efficiencies to keep your rates affordable and your reliability high.
The year 2021 was a difficult, frustrating, and rewarding year. Your cooperative took a few hits, like everyone else, but maintained low rates and high reliability. We expanded services and supported our communities. I am honored to be a part of the Lane-Scott Electric Cooperative family and to work alongside these great individuals, serving you.
Richard McLeon, MBA
General Manager