By Duane Ver Ploeg, PCEA Board President & Representative on the CIPCO Board of Directors
2020 will long be remembered as the year of the coronavirus – a pandemic that became the center of our world. We watched the effects unfold country by country, then coast to coast in the U.S. We wondered when and how it would affect our members, employees, family, and friends. After battling fear and a lack of information initially, it didn’t take long to feel the impact in our communities.
Despite the pandemic, CIPCO had planned an ambitious year including the continued repowering of the Summit Lake plant, CIPCO’s largest construction project in the history of the cooperative. Wapello Solar, LLC was under construction by Clēnera with an anticipated early 2021 completion date. With the planned closure of the Duane Arnold Energy Center (DAEC), CIPCO worked to identify the right, cost-effective generation resources through power purchase agreements and market buys to fill anticipated gaps in the resource plan.
While the pandemic tested our strength in 2020 as a whole, the massive derecho that swept across the state in August with hurricane force winds tested our systems, but it also demonstrated the power of cooperation. CIPCO received overwhelming support from Dairyland Power Cooperative, Northwest Iowa Power Cooperative, Northeast Missouri Electric Power Cooperative and Corn Belt Power Cooperative with exhaustive restoration activities for critical transmission lines. Unfortunately, the derecho brought an additional casualty; the early loss of DAEC due to catastrophic storm damage.
Despite the unexpected challenges during 2020, such as derecho costs topping $5 million, and lower energy sales, CIPCO’s financial results reflect another year of stability and competitive rates. The year represents the fifth consecutive year of declining rates and is the lowest rate in more than 10 years. Even with the challenges of 2020, we successfully executed on the long-term strategy of re-investing in the system to maintain and improve reliability. Capital expenditures for the year were more than $93 million, one of the largest capital additions in CIPCO’s history. This included significant work on Summit Lake.
Pella Cooperative Electric and CIPCO strive to provide safe, affordable, and reliable power to our members across the system. Despite the attention given to high-profile issues and events in 2020, other projects are crucial to the successful operation of the CIPCO system. Throughout the year, a number of substation projects were completed. And despite the disruption of the derecho in the second half of the year, CIPCO finalized work on more than 32 miles of line. CIPCO’s commitment to reliability led to a system-wide outage rate of 0.34 hours per consumer without the derecho and 23.19 with the derecho included. Without the derecho, this would be the ninth consecutive year in which CIPCO’s average outage total was below the target of 1.00 hours per consumer. For 2020, Pella Cooperative Electric’s was 0.93 hours per member, without the derecho, however, it is 1.43 including the August derecho.
Returning patronage capital is a fundamental component of the cooperative business model. CIPCO remains dedicated to sound financial practices that allow margins to be returned to its members in the form of patronage. During 2020, CIPCO returned patronage totaling $222,699 to Pella Cooperative Electric.
I’m proud of the actions taken in 2020 to sustain and grow our connections within the rural electric industry during a tumultuous year. Our actions have strengthened CIPCO’s mission to provide members with wholesale power and services in a safe, reliable, and cost-effective manner. Thank you for the opportunity to serve as your representative on both the local board of directors and the CIPCO board of directors. I am proud to say, as a result of decisions made and actions taken in 2020, Pella Cooperative Electric’s members, as well as the entire CIPCO system, are well-served now and into the future.