Budgets & Aging Infrastructure

By Pat McGonagle, Vice President & Chief Financial Officer

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. 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.

The modernization of our electric system is even more urgent because of the increasing dependence on electricity for modern life. During 2020, the electric cooperative spent approximately $2.5M on upgrading our Advanced Metering Infrastructure as part of a two-year replacement plan, $1.8M towards the replacement and installation of new distribution lines and nearly $2.1M on new service connections for members. During 2021, the cooperative plans to spend over $11.2 on capital improvements for our electric division. Nearly $2.4M will be spent on new services to members, $4.2M for line replacement and $3.2M on rebuilding transmission lines which should help both system reliability and reduce service interruptions.

Moving into the natural gas business, older cast iron pipe is subject to cracking and breakage, steel pipe is prone to corrosion, and plastic pipe is susceptible to cracking or premature failure. The board of directors approved the Distribution Integrity Management Plan back in 2012 as a budget item to aid in the replacement of 107 miles of bare steel pipe with more modern polyethylene pipe and a plan to replace service lines and prone to fail risers beginning in 2013. As of December 31, 2020, the gas cooperative has completed the riser replacement program and has approximately 28 miles of distribution line that we need to replace. During 2020, the gas cooperative spent approximately $3.9M towards the replacement and installation of new distribution pipeline and nearly $2M on new service connections for members. During 2021, the cooperative plans to spend approximately $7.6 on capital improvements for our gas division with $4.3M spent on pipeline replacement and $2.1M on new service connections for members. We continue to invest considerable time and capital to support the safety and integrity of our pipeline system and facilities.

The cooperative’s plan to modernize and replace essential parts of our aging electric and natural gas infrastructure proactively addresses critical areas before they become problematic. It also directly addresses the mission of your cooperative – to provide safe and reliable energy for our members now and in the future.