As we enter a new year, I want to use this space each month to discuss topics that are important to Claiborne Electric members and the way we do business. This month, I’d like to discuss resiliency and storm planning.
Living in rural north Louisiana, we understand that storms causing widespread outages are, unfortunately, a part of life. Whether it’s an ice storm in January, a tornado in April, straight-line winds in July, or remnants of a tropical storm in September, widespread outages are occasionally part of the utility business. We sell members a product that is outdoors, in the elements. When those elements are harsh, it can affect our delivery of that product.
One thing we will be discussing in the upcoming months is how the Cooperative pays for widespread restoration efforts. When a storm interrupts service and causes widespread damage and destruction of poles, wire, transformers and other equipment, the cost of restoration can quickly reach hundreds of thousands if not millions of dollars.
In the past, we have paid for those storms retroactively through a line of credit. We borrowed money from our creditor to cover those restoration efforts, then paid it back with interest. In time, like all Cooperative costs, the price for storm restoration (including the interest paid on borrowed money) ends up in the rate members pay for electricity.
In the upcoming months, we will be looking into the process to build an Emergency Reserve Fund. This fund would be built slowly over multiple years, allowing Claiborne Electric to have a source of storm funding that would be held until a storm happens. In the long run, having an Emergency Reserve Fund on hand would save members money and keep rates low. This would eliminate borrowing money, and the interest paid on those loans. Planning for storms in advance and having a resiliency plan in place makes the Cooperative stronger and more prepared when these inevitable storms occur. I plan to keep you, the member, updated throughout this process.
Together, we will continue to look for ways to improve our processes to ensure we operate in the most efficient and responsible ways possible while delivering the best possible service to you, our members.
Michael Marcotte
Claiborne Electric General Manager & CEO