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CEO REPORT


A Year in Review by Tyson Littau, CEO


s most of you are well aware, in 2017 we had two major disasters within 60 days of each other. We had the ice storm that began on January 14, and the devastating fires that started on March 6. Many of our members experienced ice storm related outages that lasted from January 14 to Febru- ary 2. We have roughly 11,500 meters and, at one time, we lost power to over 9,700 meters. During that storm, we replaced 6,107 poles, 1,826 crossarms and over 395,000 feet of conductor, all while housing and feeding over 450 linemen. From March 6 to March 11, over 1200 meters lost power due to several fires and your cooperative replaced an additional 347 poles and again housed and fed over 100 linemen.


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As you can imagine, events of this magnitude have a big im- pact on our annual margins. For the first time in 35 years, North- western Electric had a negative margin. The ice storm restora- tion and debris removal cost us just over $21 million, and the fire expenses were over $500,000. Northwestern Electric will re- ceive reimbursement for 75% of eligible expenses from FEMA for the ice storm, but we won’t receive any funds for the fire.


to pinpoint outages, control oper- ating costs and improve service reliability. We installed almost 12,000 smart meters across our system. This new technology will help us keep electricity safe, reliable and affordable.


“We are still a non-profit organization. We pay all of our margins back to you, the member.”


Members can now view outage information on our website or by using the NWEC app on their phone. Linemen use this information to get driving direc- tions while the outage management system predicts what electric device may be at fault. We also added software that will allow dispatchers to view locations of trucks and response vehicles. We are now able to use this new technology to push out work orders directly to the linemen on their iPads. NWEC members can pay their bill, review usage data and report outages with the North- western Electric app. We also added outage texting and many other programs like our member portal that our available on our website.


These events require huge amounts of money, all due within a short period of time. For these situations, we borrow money on emergency lines of credit and then pay off the 75% from FEMA when it’s received, but the other 25% goes into our long-term debt. We are fortunate interest rates remain extremely low, but on these large sums the interest expense still equals over $165,000 every three months while we are waiting on the government reimbursements. Your board and staff will continue to monitor the impact of these events on our financials.


On a more positive note, we made it through all of these events without an accident. When you have that many people working during extreme temperatures and timelines, we feel very fortunate all of our linemen returned home safely to their families.


This year we also completed the install of a new state- of-the-art advanced metering system which allows us


I will also remind you our original purpose was to pro- vide electricity to farmers and rural communities that couldn’t get service from anyone else, and for many of you that is still probably true. We are still a non-profit organization. We pay all of our margins back to you, the member. In 2017, we paid back the 1997 North- western Electric Cooperative margins and the 1956- 1977 Western Farmers Electric Cooperative margins which totaled more than $1.3 million.


Even with all the weather events, we continued to stay active in your communities by sponsoring many youth programs, scholarships and safety programs. We also sent one of our own linemen to Guatemala with 12 other linemen from Oklahoma to build line and pro- vide power to a group of people who have never had electricity.


As you can see, NWEC had a very busy year. Please call or come by the office if you have any questions. We appreciate the opportunity to serve you and hope to see you at the annual meeting.


2017 Annual Report 3


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