Volume 2019: Issue 7 (800) 696-7444 P O Box 425 Calais, ME 04619 www.emec.com (207) 454-7555 September 2019

The weather was sunny, dry, and warm for Eastern Maine Electric’s 2019 Annual Meeting, held on August 3rd at Washington County Community College.

Co-op Board President Scott Skinner (Mount Chase) welcomed the members to the meeting. As he delivered the first of the officer reports, he explained a key difference between electric cooperatives and investor-owned utilities.

EMEC Officers Report on Co-op Progress at 2019 Annual Meeting

“The Chief Executive of an electric co-op reports to the member-elected board,” he said. “This arrangement naturally guides the CEO’s priorities, and that gives the whole organization a community-focused perspective.”

At investor-owned utilities like Emera Maine or Central Maine Power, most or all of the board members live outside of the area served by the utility. “Those boards

represent investors, who expect profits,” Skinner said.

“There’s nothing wrong with earning a profit, by the way,” he said. “There are times, however, when the goals of the stockholders come in conflict with the needs of the customers. Since a for-profit board represents the stockholders, it’s the profit goal that will win out in the end.”

Why and How EMEC Schedules Planned Outages

Board Secretary Wallace Lindahl (Carroll) discussed the number of planned outages scheduled recently. Three outages had been planned in the two weeks prior to the meeting, and another two were planned for the weeks afterward.

“Eastern Maine Electric conducts planned outages when important line work cannot be done safely and efficiently with electricity flowing,” Lindahl said. He gave examples of such jobs, like moving power lines to new poles, replacing line switches, or upgrading substation equipment.

“If it seems like we often have planned outages in July, that’s because people are less affected by a power outage during the summer,” Lindahl said.

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EMEC Board President Scott Skinner (Mt. Chase) speaks to the members of the 2019 Annual Meeting at Washington County Community College. Behind him are the other consumer-elected members of Eastern Maine Electric’s Board of Directors.

Annual Meeting Updates (continued from page 1)

“The days are longer, and the air is warmer, and people are already spending more time outside. The work itself can be done more efficiently during the non-winter months, too.”

Lindahl said that some planned outages have such a big impact that the Co-op sacrifices some labor efficiency in order to minimize the impact. He used the example of swapping out substation transformers, a project that requires heavy equipment and a lot of time. It requires cutting power to everyone served by that substation.

“For those reasons, we usually do that kind of work in the middle of the night, when most Co-op

members are asleep and most businesses are closed,” said the Secretary.

“It takes longer to do this work at night than it would during the day, but the sacrifice is worth it if the outage has less impact on schools, employers , or cr i t ical publ ic services.”

Lindahl pointed out that another option to night outages is possible for some kinds of projects. “In those instances, jobs are evaluated to determine whether they can be done energized. If they can be done energized, we’re willing to trade some labor efficiency for a lessened impact on thousands of people.”

Secretary Lindahl noted that

sometimes the scheduling is not up to Eastern Maine Electric. Two planned outages this summer were scheduled for the safety of workers for the Maine Department of Transportation, whose work required the use of heavy equipment near the power lines on Route 9 and Route 6.

“While we’re on the subject of planned outages, please let the Co-op know whenever you change your phone number,” Lindahl urged. “We try to call everyone affected by a planned outage ahead of time, letting them know the outage is scheduled. By keeping Eastern Maine Electric up- to-date wi th your contact information, you make it possible for us to keep you informed.”

EMEC CEO Scott Hallowell speaks to the members on August 3, 2019.

Jazz and Blues group “New Shades of Blue” performed as members dined and chatted with friends before the business meeting.

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Recent and Upcoming Developments

Chief Executive Scott Hallowell spoke to the members about recent deve lopments and upcoming challenges for Eastern Maine Electric. He began by pointing out how the Cooperative’s approach to decision-making differs from that of investor-owned utilities, whose primary goal is profit.

“While it’s important that the Co-op has an adequate bottom line, or margin,” Hallowell said, “We do not focus on ensuring that there are large profits to be sent to out of the State and out of the Country.”

Instead, the Cooperative’s core mission is providing reliable service, and EMEC seeks to continually improve that reliability. Hallowell said that within that mission, “When making decisions, we look at what’s best for the Cooperat ive, the communities it serves, and its members.”

This cooperative difference and Eastern Maine Electric’s local focus were demonstrated earlier this year.

“Members of the Co-op who began receiving electric service in 2017 or earlier received a modest credit on their April electric bills,” Hallowell said. Eastern Maine Electric had converted some of its equity to an asset (cash) and returned it to the members, based on each member’s contributions to revenue.1

“This was the first year that the Co-op was able to do this,” Hallowell said at the Annual Meeting. “While there are no guarantees, the Co-op is hoping that this will be an annual event for a number of years.”

The CEO outlined some of the challenges ahead for Eastern Maine Electric, one of which is the need for investment in the Co-op’s 69 kiloVolt transmission line, which was built in the 1960s and ‘70s.

The t ransmiss ion l ine connects EMEC’s system with New Brunswick Power in Calais, and it provides power to the Co-op’s substations in Calais, Woodland, Princeton,

and Topsfield, as well as the Woodland Pulp Mill.

“While the line has a fair amount of age on it, overall it is still in relatively good condition,” Hallowell said. He said work had been done on part of the line in 2016, and that testing in 2018 showed the poles were still in fairly good condition.

“Going forward, we continue to evaluate the line and plan the most effective and efficient way to work at replacing the poles and wire over time.”

Hallowell indicated that progress has been made with tree clearing and improvements to the electrical system.

Another challenge the Co-op faces is the impact of legislation. “Some of the Bills that get introduced could result in more cost to the Co-op without any benefits for you,” he said. “In the last legislative session, many of these types of Bills were voted down. For some of them that passed, there were exemptions for Consumer -Owned Utilities.”

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Endnotes1. At the end of the fiscal year, positive margins are allocated to the members of the Co-op based on their contribution to revenue that year. The margins are reinvested in the Cooperative, which increases its equity. When financial conditions permit, a small portion of the patronage capital can be “retired,” reducing the Cooperative’s equity and returning capital to members based on their recorded contribution to previous years’ margins.2. The three-year contract with NB Power took effect in November of 2017.

Food for the 2019 Annual Meeting was prepared by Moe’s Original BBQ and served by EMEC employees and helpers. Member’s scored the food quality highly in surveys turned in the day of the meeting.

2018 Patronage Capital AllocatedEastern Maine Electric’s

margin from the 2018 fiscal year has been allocated and recorded in the names of the Co-ops members, based on each members contribution to revenue in 2018. 1

A statement of the 2018 allocation appears on the back of the September bill in the sec t ion labe led “ P a t r o n a g e C a p i t a l Allocations.”

Annual Meeting Updates (continued from page 3)

One piece of legislation that did pass was designed to lower the cost of electricity for large agricultural fairs. “As the Rules are being written to enact this legislation, we are trying to ensure that Co-op consumers do not have to help cover the cost of reducing electric costs for these fairs, such as the Blue Hill Fair or Bangor State Fair. It just would not be right or fair if that were to happen.“

Hallowell noted that the Standard Offer electricity supply rate EMEC members pay to NB Power is 6.7 cents per kiloWatt-hour2, which is lower than the prices paid by the state’s investor-owned utilities.

“Current ly, the res ident ia l electricity supply price for Central Maine Power is 9 cents and about 8.4 cents for the Emera Maine Bangor Hydro and Maine Public Service districts.”

“We’re pleased that the rate we’re charged is currently lower,” he said. “We continue to monitor the market prices for electricity and will be working to try and ensure the best electricity supply prices available out into the future.”