Habersham Electric Membership Corporation: Working for You
Life is like a series of building blocks, and each year acts as the foundation for the next as we build our future. With that in mind, I’d like to reflect on 2018 and how Habersham Electric Membership Corporation (HEMC) is committed to improving transparency, safety, reliability and affordable rates.
In previous communications, I’ve shared some of the steps we’ve taken to meet these commitments as we near the end of 2018 I would like to take this opportunity to update our membership on how your cooperative is working for you.
Fifteen years ago, industry organizations and the Department of Energy began predicting that electric utilities would experience a large number of workforce retirements in coming decades as baby boomers came of eligible retirement age.
In 2018, 15 HEMC employees chose to retire. The average career of these employees was 31 years, with 472 years combined. This is not unusual of industry averages as babyboomers come of eligible retirement age. As of December 2018, 22 percent of HEMC’s
workforce was eligible for retirement, with another 19 percent eligible within the next five years.
The National Rural Electric Cooperative Association (NRECA) published a state-by-state report in 2017 analyzing the cooperative workforce and expected retirements. Their research showed that of the state’s
5,638 cooperative employees, 489 are currently eligible to retire and 1,112— nearly 20 percent—will be eligible to retire within the next five years. The national numbers are even more staggering: 5,600 co-op employees were eligible to retire in 2017 with 9,600 more set to reach retirement age over the next five years.
With these projected departures, the electrical utility industry must determine how to best align their workforce to provide reliable service at a reasonable cost for members. As HEMC encounters this, we are evaluating the positions being vacated and identifying areas of need, skill sets and technology rather than automatically backfilling vacancies. It is the fiscal responsibility of the cooperative to make good business decisions to help reduce future costs without sacrificing service.
As technology changes, utilities must adjust. This has been a hallmark of our past as we progressed from setting poles by hand to using auger and bucket trucks. We now can do the same amount of work in approximately four hours that originally took eight or more hours.
By us working smarter, our members receive value in an increased speed of work and satisfaction while reducing the associated costs. HEMC is continuing to evolve and new positions have been added to focus on future sustainability including a controller, strategy execution director and dedicated fiber crew.
In addition, we modified the retiree benefit in order to offer all employees the same structure. Through minimal investment in our current workforce plan, we are now able to have equal benefits for all employees. Over the past six years, the post-retirement benefit liability has decreased 51 percent from $7.5 million to $3.7 million, a substantial reduction further demonstrating our commitment to responsibly control costs incurred by our members.
After an extensive review of HEMC’s PowerGuard Security division, it was determined that it was in the financial best interest of our members to exit the security market. EMC Security assumed all PowerGuard Security accounts without an interruption in service. All five of the PowerGuard employees filled vacancies in other departments at Habersham EMC.
The expansion project has been completed and the results are being analyzed. A dedicated fiber crew was created by transitioning employees from electrical line crews and PowerGuard Security. We hired a consultant to develop a business plan to determine the future of Trailwave. I look forward to sharing those plans with you over the coming months.
We listened to our members’ demands for more reliable service and less outages. I know our members deserve safe, reliable electric service and we are committed to providing that to you. Vegetation management is absolutely necessary where people, trees and utilities coexist.
In 2018, we began reclaiming our right of way through the use of “ground-to-sky” practices. As part of this initiative, all trees, underbrush and other vegetation within our easement will be cleared. This was implemented after analysis of 2017 outages revealed that 67 percent of all outages within our service area were caused by vegetation growing too close to the electric lines.
As a result of this initiative, no outages were reported along circuits that had been completed prior to Hurricane Michael while all outages in other areas during that time were caused by vegetation. It will take approximately five years to complete this reset cycle, but all HEMC members will benefit from more reliable service.
I am especially proud of HEMC employees for creating HEMC’s first strategic plan. All employees were surveyed in order to identify the values of the cooperative, then mission and vision statements were also developed upon this feedback. The bottom-up plan approach was then used to form the strategic plan to support these values and statements. As approved by the Board of Directors, this plan is a systematic approach to guide HEMC through the next three years and will lay the groundwork for a sustainable future.
As part of our efforts to improve transparency between the cooperative and members, the three components previously included in the total electricity charge were broken out separately beginning with the November 2018 bills. The “energy” component is the charge for the kilowatt-hour usage. The “wholesale power cost adjustment” reflects the fluctuations in our cost of wholesale power purchased. The “facilities charge” (also referred to as the service charge in the rate schedules) recovers expenses incurred such as equipment, line maintenance, metering and billing services. These are not new charges; they have just been unbundled on your bill. I hope showing each charge allows you, our member, to better see and understand how your electric usage affects your bill.
Year-end Rate Decrease
Due to a reduction in the wholesale power cost adjustment (WPCA), members received credits on their November and December bills. On average, each account had a $28 reduction for every 1,000 kWh of energy used. This was an approximate $2.5 million savings for our membership—another great example of your cooperative working for you.
As the President and CEO of your cooperative, I want HEMC members to be aware of the challenges and opportunities we face as we plan and build our future. I also invite you to celebrate the successes. Throughout HEMC’s 80-year history, there have been many obstacles as well as great successes. I know our future is bright and I look forward to serving you.
Let’s make 2019 a great year together!