Investing in Reliability
Written by Pat McGonagle, Vice President & Chief Financial Officer
Investing to improve and replace aging infrastructure is critical for our cooperative to remain reliable and safe.
Like many utilities, The Energy Cooperative built large segments of its distribution system for both the electric and gas divisions during the 1960s, 70s and 80s. In recent years, the cooperative found itself needing to invest more heavily in its older infrastructure to improve system reliability and reduce interruptions.
The board of directors was updated on the aging infrastructure at our September 2018 board meeting for both our electric and gas operations. Management and the board continue to balance how to effectively refurbish, replace and modernize components of our older system while preparing for new growth through our annual capital budgeting process.
Capital Expenditures by Year*
This matter is highlighted by looking at The Energy Cooperative’s most recent audited financial statements as net property, plant and equipment comprise nearly $226 million (M) of the $293M of total assets for the combined entities.
The modernization of our electric system is even more urgent because of the increasing dependence on electricity for modern life. During 2018, the electric cooperative spent approximately $3.6M towards the replacement and installation of new distribution lines and nearly $3M on the replacement of transmission lines. During 2019, the cooperative plans to spend over $8.5 on capital improvements for our electric division. Nearly $3M will be spent on line replacement and $2.4M to update electric meters (as discussed on the previous page) which should help both system reliability and reduce service interruptions.7