by Allen Albers, ECI REC representative on CIPCO board of directors
As your representative on both the East-Central Iowa Rural Electric Cooperative Board of Directors and the Central Iowa Power Cooperative (CIPCO) Board of Directors, I have the duty to ensure your energy needs are met. And while fulfilling that duty is more challenging today than ever before, I am also often reminded that it is just as rewarding.
As our Cooperative’s power provider, CIPCO continues to intelligently maneuver within a changing regulatory environment. In 2014, the EPA set goals known as the Clean Power Plan to reduce carbon emissions on a state-by-state basis. With a bit of flexibility in how to meet those goals, Iowa is still facing a 16% emissions reduction for existing fossil-fuel-fired power plants. With more than 60% of its power generated from carbon-free resources, CIPCO is in a good position to achieve the proposed reductions by 2030, and is engaged to help educate policymakers on how these regulations affect Iowa and rural electric co-ops.
CIPCO’s strong financial focus on its operation provides the corporate stability that benefits ECI REC and each of CIPCO’s member distribution systems. That means we receive the benefit of patronage dividends, or excess revenue that is then credited back to you. The CIPCO board recently authorized the allocation of $23 million in patronage. This allocation breaks down as follows: $4 million payable in 2015, $10 million allocated to a 40-year roll, and $8 million to the 15-year roll. The balance of the 2014 margin, $1,987,352 reserve was allocated to the statutory surplus. Additionally, the CIPCO board actions included the retirement of patronage dividends totaling $7 million dollars. This represents the retirement of $2 million of 1999 patronage capital and $4 million of the 2014 current dividends, as well as an additional cash retirement of $1,017,078 representing member election for payment of the 40-year allocation. The total payment to ECI REC equals $576,662.23.
On the national front, CIPCO participated in activities that will help enhance and grow Iowa’s rural economy and maximize financial incentives within our service territory. U.S. Secretary of Agriculture Tom Vilsack visited CIPCO’s Cedar Rapids office to lead a roundtable discussion on rural equity investment and announce a new $150 million investment fund designed to assist small businesses in rural areas. The new Rural Business Investment Company (RBIC), licensed by the USDA, will make private equity investments in agriculture-related businesses.
A few months after the announcement, CIPCO was on hand in Washington, D.C., to participate in the White House Council’s Rural Opportunity Investment Conference, where senior government officials, rural economic development experts, and business and financial leaders came together to discuss ways to develop a partnership that creates job, grows small businesses, and invests in critical rural infrastructure.
Making the investment today to handle the energy needs of tomorrow is a prime focus of the CIPCO board. We realize how important it is to approve expenditures for improvement projects at CIPCO generation facilities and replace or upgrade the poles and wires that are no longer efficient. In 2014, the CIPCO board approved a $28 million capital program to support these changes. Though CIPCO’s annual electric sales were down slightly from 2013 to 2.77 million MWhs in 2014, electricity demand peaked at 561 MW in January 2014, thanks to the “polar vortex.” The event marked the first time ever that CIPCO experienced peak demand in the winter.
The CIPCO board approved $35 million for the Cedar Rapids to Iowa City Corridor Grid Expansion Plan, or approximately one-third of the total project cost of $108 million, in order to plan for electric system load growth now rather than wait until big economic development projects come in and can’t be accommodated.
CIPCO continues to have steady, deliberate growth. The 2014 forecast models anticipate an annual growth rate of 1% from 2014-2033, down from 1.3% forecasted in 2013. Recovery from the economic recession and aggressive energy-efficiency programs were cited as two reasons why the growth rate was a bit lower. Most of the growth is expected to occur in the commercial and industrial areas, estimated at 2.1% over the next 20 years, while residential growth is estimated at .3%.
In my role as a CIPCO director, I’m guided by what is in our members’ best interests when making important decisions. I understand how incredibly important our service is to our community and that our decisions impact every household and business we represent. CIPCO and ECI REC are committed to delivering safe, reliable, and affordable electricity to you.
We will strive to ensure your power needs are met now and well into the future.