During the Southern Illinois Power Cooperative (SIPC) annual meeting, held March 30 at its headquarters office at Lake of Egypt near Marion, President/CEO Don Gulley told members the cooperative is rising to the challenge. Gulley explained that “these moments of truth are what help define who we are. For SIPC, we were facing our moment of truth closing out 2017 and heading into 2018.”
He went on to explain that a loss of revenue, flat member loads and depressed energy markets had financial models projecting a double-digit rate increase for 2018. With a strategic plan developed by the board of directors, seven priorities were identified: rate stability, financial strength, operational excellence, environmental stewardship, risk management, Prairie State Generating Campus and stakeholder communication. Due to hard work by SIPC employees, that rate increase was held to 2.9 percent and is not expected to rise for the next three to five years.
Gulley reported that almost $5 million was trimmed from outages by relying less on contractors and more on employees. The cooperative also continued to meet and exceed environmental requirements and has taken action to better manage its investment in Prairie State.
He closed by expressing his appreciation for the board and employees. “When I first came here, I said we must re-establish a solid level of trust in the board room and with employees. I’m happy to say trust is alive and well at SIPC. I care about this organization – the board, employees, their safety and our rich history. We are standing on the shoulders of giants…people who had the vision of what was needed, and what SIPC could become. We owe it to all to be good custodians for those that come after us.”
Board Chairman Frank Herman reported that over the past few years the board of directors has been concerned with wholesale rates and tasked management with finding ways to stabilize rates while providing reliable power in an environmentally friendly way.
“It was a tall order, but SIPC’s staff rose to the challenge,” said Herman. “Don challenged his senior staff to significantly reduce operating and maintenance costs and, through a variety of measures, they managed to reduce costs without sacrificing other strategic priorities. We did have to impose a 2.9 percent rate increase, but it was far better than the projected 10 percent increase.”
During his report, Secretary-Treasurer George Obernagel noted that through the many financial challenges SIPC has faced, it still remains strong with an increasing equity level. “The board recognizes the importance of a strong balance sheet and higher equity. Additionally, SIPC has a consistent credit rating from both Standard & Poor’s Rating Services and Fitch Ratings of BBB stable, which places us securely as an investment grade credit.”