(The following remarks were delivered at SMECO’sAnnual Members’ Meetingon August 27.)
Thank you,Mr. White, for that very nice introduction and thanks to you and the Board for the confidence you place in my team and me, and for the support you provide to us day in and day out.
Good evening SMECO members, and thank you for attending our 2020 annual meeting. This is our 82nd meeting of members sinceour founding in 1937.
Now, I know, many of you have attended lots of SMECO’s annual meetings, but we’re also recognizing a number of firsts.
It’s the first time we’ve held our meeting during a global pandemic.
It’s the first time we’ve worn face masks at an annual meeting.
It’s the first time we’ve held our meeting in a garage.
And, although I’ve been working at the co-op for 21 years, this is my first Annual Meeting since becoming thepresident and CEOof SMECO.
Before going any further, I’d like to recognize elected officials, special guests, and business partners who have taken the time to join us tonight.
- Johnny Wood, former member of the Maryland House of Delegates
It wasn’t easy to recognize everyone behind their face masks, so if I left anyone out, please stand up and identify yourself.
Thank you all for attending.
As Mr. White explained earlier, we wanted to hold an in-person meeting—not only to satisfy our requirements as a co-op, but to give our members a chance to have their voices heard, and we appreciate your taking the time to participate in the meeting. We’re also grateful for all of the SMECO members who voted this year. We received almost 11,200 ballots: 80% were returned by mail and 20% of the ballots were cast electronically.
Last year was a very favorable financial year for SMECO. We closed 2019 with net margins of 29 million dollars, with the majority allocated to our members’ capital credit accounts.
Our Board is committed to refundingcapital creditsto you in the future, when financially feasible. However, as you may know, we have not issued a Capital Credit general refund in 2020. Because of the pandemic, many businesses were closed, many of our members are unemployed, and the state has mandated a moratorium on terminations. Some customers are delaying their electric bill payments, seeking financial assistance, and requesting payment arrangements.
In light of these factors, the Board has not approved a Capital Credit general refund this year; however, we will continue to consider all the options as the effects of the pandemic unfold and our members’ financial situation stabilizes.
Before refunding Capital Credits, SMECO uses margins to invest in new construction and infrastructure improvements, and we have made significant upgrades during the past year to increase the reliability of our electric system. We’ve removed and replaced some of our older substation transformers, including units at our La Plata, Piscataway, McConchie and Mattawoman substations. Over the past few years we’ve been working to re-build the Farmington Switching Station to improve service in Accokeek by relocating the Piscataway substation to our Farmington Station. The project was recently completed and all of the customers who were being fed by the Piscataway substation were transferred to the new Farmington station earlier this month.
And in southern Charles County, we are making plans to construct a new substation in Mount Victoria to help harden our system in an area that is susceptible to storms. This station will also serve as a backup for service to the Cobb Neck area of our service territory. In 2021 in St. Mary’s County, we will begin construction on transmission lines and a new substation in Chaptico to fortify the service in that area, scheduled for completion in 2022.
Improving reliability is a never-ending job for SMECO. The continuous growth in Southern Maryland keeps us working to make sure our members have electric service they can count on. We work closely with the county governments so that we can plan for anticipated growth, such as new housing developments and schools.
We also invest in technological improvements. We continuously upgrade our computer systems to expand our capabilities and enhance functionality. The technology used by utilities is vastly different today than it was 30 years ago. We rely on technology to run our electric system efficiently and to keep the power flowing. And we also use technology to improve customer service, providing our members with convenient tools, like our SMECO 24/7 mobile app.
For the past 18 months, we’ve been sending weekly updates to our members to let them know how their energy use this week compares to their energy use last week. We send high bill alerts, by email—and by text—to warn customers of abnormally high usage. And customers can easilylog on to our websiteto see how much energy they use every hour of every day.
These personalized, energy-saving services were made possible by oursmart meters. We completed the deployment of our Advanced Metering Infrastructure less than three years ago. And that system has made it possible for us to provide more services to our customers. We’re currently working on developing new time of use rates so that people with electric vehicles can save money if they recharge their cars overnight instead of during the day. And they will also help members save when they shift their load to avoid peak demand periods.
Our smart meters have been used to help analyze the quality of service provided to our members’ homes and to provide early notification if power has been interrupted and when power has been restored. This system saves a significant amount of time in the restoration of power during large storms such as the tropical storm we experienced earlier this month.
We’re working to provide innovative solutions to meet customer needs. To help provide direction and develop strategies for implementing new programs, we are creating a new department that will focus on strategy and innovation. Our members expect more from their co-op, and we’re working to deliver on those expectations.
OurEmPOWER Maryland programsare designed to help customers reduce energy use, and this year, SMECO residential members ordered more than 3,000 Energy Efficiency Kits and more than 3,100 Kits for Kids. In just six months, we surpassed the program’s goals for the year.
This year, SMECO’s energy savings portfolio was responsible for removing the equivalent of 27,365 metric tons of carbon dioxide emissions from the atmosphere—that equates to the energy use of about 3,158 homes for one year. In addition, SMECO received the EPA’s ENERGY STAR New Homes Market Leadership Award, as well as the 2020 ENERGY STAR Partner of the Year: Sustained Excellence award, and this is the ninth consecutive year that we have received that award.
SMECO’s EmPOWER Maryland energy savings programs help us to help our customers save on their monthly bill. At 6.21 cents per kWh, our residential energy rates are now at a 15-year low.
The energy landscape is changing, and with it, electric generation is becoming more diverse and more sustainable.
In response to our members’ interest in renewables and their requests for greater reliance on clean energy, we submitted a filing to the Public Service Commission two months ago. We wanted to offer a Green Energy Option to our customers so that those who wanted to go green could purchase 100% of their energy from renewable sources. Last week, the PSC approved our Green Energy tariff and we are in the process of implementation. Other suppliers in SMECO service territory may offer a green energy option as well. Those can be found on the Maryland Public Service Commission’s website.
To decrease reliance on fossil fuels, Maryland has set a goal to increase the number of electric vehicle charging stations throughout the state. We wanted to be part of this program and filed our plan for a pilot charging station program with the Public Service Commission. Our pilot program was approved by the Commission and SMECO was given authority toinstall up to 60 charging stationsat government-owned sites. We’ve been working with county governments to select local facilities throughout Southern Maryland, such as public libraries, where we can install electric vehicle charging stations. Through our SMECO EV Recharge program, we will also develop plans for rolling out appropriate rates and technical assistance for charging electric vehicles at home.
We’re making progress on many fronts, and that includes our new facility in Leonardtown. We began site construction last year and now have much of the building under roof. The Leonardtown office will house a back-up operations center, a back-up customer care center, and a redundant, highly available data center to enhance business continuity. We expect the facility to be open and operational by mid-2021.
When I became CEO in March, I inherited a great situation. Our co-op is financially strong; our workforce is well trained and capable; our electric system is sound; our board is experienced. The one thing I didn’t inherit—or expect—was a pandemic. The coronavirus has introduced all of us to a new world.
Although our emergency response plan addresses a pandemic, I never envisioned how it would play out in real time. And I must say, our co-op employees have stepped up and met the challenge. When we decided to have as many employees as possible work from home, our IT personnel made sure we had the hardware, software, and connectivity for employees to work productively and securely.
We’ve taken precautionary measures to safeguard the health of our employees. Our construction crews are encouraged to re-think their work practices to maintain physical distancing. Our Human Resources team has worked extremely hard to provide direction and guidance to our management team and support to all of our employees. Our system operators cannot perform their work remotely so they report to the office every day. We have taken steps to ensure the team is isolated to the operations center area during their workday. They have their own kitchen and restroom facilities and we limit their exposure to other employees. This has not been easy for this team, but they have stepped up to the challenge and their efforts are very much appreciated. Our Facilities team has ensured that we take steps to clean and sanitize buildings and vehicles, and our risk management team is taking the lead on preparing a transition plan for the time when we are all able to return to the office.
For many of our employees, working from home is difficult. It can be frustrating and stressful. We miss seeing our colleagues. But we know it is necessary, and we know that it makes a difference. Since the pandemic began, we’ve had only eight employees contract the virus and all of them have recovered. And, none of these eight employees contracted the virus at work.
Our major concern about keeping employees healthy is ensuring that we have construction personnel who can respond to power outages in the event of a storm. I’m happy to report that we have not encountered that problem. We’ve had a number ofmajor stormsover the past few months and our crews have responded admirably.
Keeping experienced, dedicated employees is difficult in some industries. But, as many of you know, co-op employees tend to stay in their jobs longer than average. We currently have nearly 90 employees—about 20% of our workforce—who are eligible for retirement. Last year, we hired 13 linemen and began two apprentice classes. We want to make sure that we have trained personnel ready to step in when our long-term employees move on.
SMECO is a great place to work. And I think it shows. We have high customer satisfaction ratings. Our customer care representatives are frequently described as professional, courteous, and knowledgeable. We receive thank you letters from members who have received assistance from our line workers. SMECO’s goal is to provide great service. As a cooperative, we will always put our members first and be responsive, reliable, and resourceful—the power you can count on. Thank you for allowing us to serve you, and thank you for attending our 82nd annual meeting this evening.