CEO’s Message – September 2023

A Forward-Thinking Approach Required

The 7th Generation Principle is a belief system attributed to the Iroquois nation, and adopted by many others, that states that the decisions we make now should be made based on their impact on our friends, families, and the world around us seven generations from now. It is a beautiful and humbling notion, and while seven generations might be a stretch, “generational” thinking is a very familiar concept in the electric utility business.

We have some big decisions to make in the coming months here at Columbia REA that will certainly impact the next generation, and even the one after that; decisions that will force us to look into the future and set out the best course possible for our members and for the Cooperative.

We are currently negotiating with BPA on our next Tier 1 energy contract. BPA provides the bulk of our energy in the form of hydropower, as well as some nuclear energy, that makes up about 85 percent of the electricity that we deliver to you. This contract will set the cost of electricity that BPA’s public power customers buy from BPA. It will be signed in 2025, go into effect in 2028, and run through 2044.

The decisions we make now will impact not just you and me and our electric bills now, but our kids and our grandkids. And it’s not just energy rates. We also need to factor in operating costs over the life of that contract; building materials and vehicle prices, payroll, facility upgrades and system upgrades and growth of our membership. That equation also includes large infrastructure purchases such as our new substation transformers— million-dollar investments that will be paid for over many years and will be online for 50 years or even longer.

With increasing political pressure around climate and environment, as well as actual effects of changing conditions (unpredictable water supplies, unprecedented temperatures, regional drought), historic trends that have always helped us determine where to set our rates and how to cover our expenses are harder to depend on for accuracy in predicting future trends, which makes the process trickier than usual. And we haven’t even touched on EVs and the ever-increasing need for car battery chargers.

BPA faces the same challenges. 2022 was one of their best years ever in terms of revenue. 2023 is looking like a different story for reasons related to the factors outlined above (temperatures, water levels, environmental legislation, etc.). Nevertheless, they, and we here at Columbia REA, are negotiating Tier 1 power rates and charting a financial course that will be in place for 20 years.

This is a period of great change, and much uncertainty, in the electric utility business, but there is one thing that will always remain steady; our dedication to our members, and our efforts to keep bringing you safe, dependable electricity at the lowest possible rates will not waver. This next rate contract with BPA will carry Columbia REA through its 100-year anniversary. Our founders set us up pretty good roughly four generations ago, and we plan to do the same.

Humbling, indeed.

Best,
Scott Peters, CEO