October is National co-op month, and as part of this year’s celebration, electric cooperatives across the country are highlighting the many ways we “Power On” for our members and communities.
As an electric cooperative, our top priority is always to provide reliable, affordable energy to you, the member-consumers we serve. But our mission extends beyond that. As a co-op, we strive to enrich the lives of our members and serve the long-term interests of our communities. By following this charge, South Plains Electric Cooperative is weathering the pandemic storm.
The U.S. Energy Information Administration is forecasting a 4.2% decrease in electricity consumption this year compared to 2019 because of the pandemic and its economic effects. In contrast, electricity sales through August 2020 for South Plains Electric are up 15%.
The Cooperative sprawls over 6,600 square miles of the South and Rolling Plains. On the west side, we are supporting the residential and commercial growth of Lubbock, Wolfforth and Shallowater. As you travel east, we serve oil fields and ranches. Sprinkled all around our service area are acres of farmland that used to be the heart and soul of our economic viability when it accounted for as much as 23% of our load.
The key to the Cooperative’s economic viability is the diversity of the members we serve. Over the past 10 years, our residential and oil loads have grown and were 68% of our load in 2019. We all know the oil industry has its ups and downs, but it is not as weather dependent as agriculture, and the load usually doesn’t fluctuate dramatically annually. Our residential load and associated commercial load are the best source of steady sales and accounted for nearly 50% of our load in 2019.
While the oil industry was declining this year, our residential load grew as members turned their homes into offices and classrooms. Summer vacations became staycations in the backyard. At the end of July, our operating margin was over $3.5 million, compared to $81,413 a year ago.
We were challenged to operate differently over the past several months, and the Cooperative stepped up to support our employees, members and more vulnerable neighbors in this time of need.
Because of the Cooperative’s financial strength and diversity, we did not need help from the Payroll Protection Program. When we had to close our lobbies, we moved quickly to connect our employees from home so members continued to experience great member service. We welcomed employees and members back to the offices on September 8 after making facility modifications to keep everyone safe and healthy. While the lobbies were closed, the drive-thru at our South office remained open, and payment drop boxes are available at all locations. We also had the chance to show our members the six other ways they can make a payment.
To ensure the reliability of your power supply and field operations, we modified our operating procedures to safeguard business continuity. Our line crews began working on staggered schedules to maintain physical separation. We supplied masks and cleaning supplies for the times closer contact with employees and members was absolutely necessary. It was our duty to implement these measures to protect our communities and keep the lights on.
More people spending more time at home, during the nearly 100 days of temperatures at 90 degrees or more this summer increased members’ bills. In April, we waived late fees, stopped disconnections and began working with members who needed help with their electric bills. We offer payment arrangements, Co-op Power PrePay and references to local agencies offering utility payment assistance. We are thankful that our overall past-due total is very manageable because we have the best members!
Launching a new and improved Co-op Connections Card program this month, with improved pharmacy discounts, is another way we are enriching our members’ lives. You’ll receive a new card with your October bill, or you can download the free mobile app in your app store.
I have another piece of good news linked to your Cooperative’s strong financial position. The SPEC Board of Directors approved returning $5 million in capital credits to the members! Checks will be mailed this month if you are receiving $25 or more, and if your refund is less than $25, you’ll have a credit on your October bill.
More than 80 years ago, South Plains Electric was built by local communities to serve local communities, and that’s what we’ll continue to do—power on.