News and Events

March Texas Co-op Power Magazine Article

March 1, 2013

If you read your local newspaper in late January, I imagine that you noticed an article generated by The Lower Colorado River Authority (LCRA) stating that they had “won” the legal case against SBEC and a few others concerning the early termination of our contract.  Well folks, that’s just not the entire story.  While it is true that District Judge Scott Jenkins ruled in favor of LCRA in their summary judgment case, the article AND LCRA FAILED to mention that this ruling addressed only one issue on our reasons for early termination.  It was the “low hanging fruit” issue that LCRA sought relief on. 

Believe me, this will be a very long process should it be played out entirely through the court system.  There are other issues that will still be addressed and we still have the option of appealing the summary judgment verdict.  For LCRA to make bold statements about the costs we are shifting to our membership is not only premature, it is downright unprofessional on their General Manager’s part.  At the very start we addressed our concerns with LCRA prior to filing a Notice of Breach.  Had she addressed us then, this legal process would have certainly been avoided.  After the Notice was sent it was LCRA that ran to the courthouse to begin the legal battle.  We are only defending what we feel is in the best interest of our members and the rates that they have to pay. 

This legal battle will not be won in the news, but in the court system.  I have consciously not played this drama out in the newspapers for that reason.  I expected the same professional courtesy from LCRA.  Regardless, I will not stoop to their level and will only provide updates through this column and inquiries made directly to me.  As I mentioned earlier, the court process will be a very long, drawn out affair.  I suspect that it could take as long as 6-8 years to completely get all the way through this process.  Many ups and downs are anticipated along the way, for LCRA to claim victory now is just plain ludicrous.  

Just a little reminder that SBEC’s annual meeting is coming up once again, so please mark your calendars for Saturday May 18^th.  The location will be the same as last year’s.  I hope you will make plans to attend.

Until next time, take care.

January Texas Co-op Power Magazine Article

January 1, 2013

As we close out 2012, I wish each of you a happy and prosperous New Year!  SBEC had an interesting year in 2012 and 2013 seems to have the same in store for us.  We started the single largest construction project (Copano transmission/substation) in our history.  We are expecting to have this substation energized by the time you start reading this article.  We will also have two more major upgrades to our substation facilities in Rock Island and Sheridan.  These projects have anticipated completion dates prior to December 15^th, 2013.  Our Engineering Manager, Clayton Stanford, has done an extremely admirable job on these projects and I’m pretty sure he will be relieved when all this is done.  We’ve joked that we should have rented an apartment in the Sheridan area for him.  As it is, he may have to re-introduce himself to his fellow employees when all this is over.  I’m proud of his work ethic and dedication.  He truly is an asset to your cooperative.

We are 99.9% complete on our meter change-out program.  The new system has been everything and more than we expected.  As with any project, there were a few bumps along the way but none that we couldn’t resolve.  We appreciate the membership’s help in getting this project behind us.  We expect to unveil some new tools that members can utilize in keeping up with their usage.  We will keep you informed as to when we expect these tools to be available to you.  Mike Ables, Special Projects Director, has done a great job in coordinating all facets of this project’s completion.

Lastly, I would like to report on our wholesale power issue.  We are still addressing legal issues concerning our split with LCRA.  Both sides are adamant in the positions taken.  I hope to have this behind us eventually, but I don’t foresee that coming anytime soon.  Regardless of which side is favored in a court’s opinion, the appeal process will begin.  With that said, I hope you were pleasantly surprised by your December bill.  Not only did you receive some Capital Credit payouts on the bill, you should have noticed a significant drop in the G&T rate.  This is a reflection of us no longer buying power from LCRA. Rest assured that your cooperative will continue to find ways to provide the electricity you need at the lowest cost obtainable. 

I would like to once again wish the very best to each of you in 2013. 

Until next time, take care.  

November Co-op Power Magazine Article

November 1, 2012

A couple of years ago I had written about the major 138kv line upgrade in Waller County.   If you remember, I had reported that the expenditures for this upgrade would exceed $11 million dollars.  At that time - it represented the single largest investment SBEC had invested in one project. When all was said and done, we completed this project faster than we expected and over $1 million dollars under budget.  I never expected that I would witness another project of this magnitude.

Well, sometimes you get surprised!  This surprise came when I was informed at the first of the year that we had another major project - a transmission line upgrade that is more than twice the length of our last one.  In addition, we will have to upgrade 4 substations along the way.  To put it in perspective, the transmission upgrade will cause SBEC to invest over $24 million dollars and the substations will take an additional $10 million dollars.  The root cause of all this investment is that one of our largest members, Copano Processing is re-tooling their plant to accommodate the gas discovery in South Texas.

Before you start thinking that Copano should be paying for all of this, let me say that's not the way the transmission market works.  Remember, I said we would be investing in our facilities.  If you were to look at your electric bill, there is a G&T charge itemized on the statement. The way we get a return on our investment is that every electric rate payer in ERCOT pays for ALL the investments in transmission each utility invests in their transmission plants.  That ensures that the backbone of the electrical system is kept up to the needs of all ratepayers.  So the members of SBEC are getting help investing in our plant and in turn we help pay for other utilities investment.  There is a rate-of-return on these investments.  However, each utility is responsible for the initial investment.  And by the way, Copano is still responsible for the investment we have to make at their point of delivery; much like any member requiring an investment to electrical service to a new residence, gate, barn or well.  That's the way it works.  

I have asked Don Roberts, Electric System Group Manager to give you a report, including pictures to provide more information on this.  Be sure to read it in this issue of your Co-op Power.

Now, a quick update on Wholesale power!  At midnight on September 12th, SBEC started buying its wholesale power from Garland Power and Light and have a six month contract with them. This decision was made because we pretty much know that LCRA will force some sort of litigation against SBEC - and we felt it prudent that we keep our contracts to a shorter term until we have a clearer picture of what we face.  As it stands right now, 9 former exclusive customers have given notice of unfair practices to the LCRA.  Seven of us are no longer taking power from them.  One, New Braunfels Utilities has filed a lawsuit against them.  The last customer, GVEC has given the LCRA a notice of breach to the contract.  In essence, GVEC is following the same path SBEC did.  There will be some twist and turns ahead of us and I will keep you updated on important events as they unfold. As always, should you have questions or concerns regarding this or any other matter concerning SBEC, please feel free to contact me.

Until next time, take care.

SBEC Asserts Claims to Protect Members

October 1, 2012

Message from the Manager – October 2012 Texas Co-op Power magazine local pages

SBEC Asserts Claims to Protect Members

Cooperative will purchase power on competitive market

As General Manager of San Bernard Electric Cooperative (SBEC), I can convey with 100% certainty that the Board of Directors, management and employees of the cooperative are all dedicated to providing dependable electric service at an affordable cost to you, our member-owners.  We strive to provide this service in a safe, friendly and reliable manner. 

Over the past several years, your cooperative has been faced with some big decisions about our future power supply arrangements.   In March 2011, SBEC’s Board of Directors voted to not extend the exclusive wholesale power agreement with the Lower Colorado River Authority (LCRA).  The extension would have required a commitment to purchase energy from the LCRA until 2041.  After much discussion and analysis, the SBEC Board determined that our member-owners would be better served by acquiring power on the competitive wholesale power market beginning in June 2016. 

This was a business decision based on the Board’s assessment of what was in the best interest of our members.  This decision was not made lightly. SBEC and LCRA had a positive business relationship and accomplished great things together for over 70 years.    The decision not to extend the LCRA contract was based on the desire for SBEC to be responsible for our power supply future and to take advantage of an open and competitive wholesale power supply market in Texas.  This was determined to be in the best interest of our member-owners.

Access to Competitive Market Denied 

Of LCRA’s 43 wholesale customers that faced this decision, 33 elected to extend the contract and 10 chose to not extend the power supply contract with LCRA.  Those customers that renewed with LCRA now have a long-term contract that among other features, allows these utilities the ability to access the competitive power supply market for a significant portion of their system’s power requirements.  SBEC and the nine other utilities that elected not to sign the extension beyond 2016 do not currently have the same opportunity to take advantage of favorable pricing in the wholesale power market.  In fact, after the ten customers gave their notices, LCRA discontinued another “Market Pricing Option” available under the original contract that allowed any customer to obtain a small portion of its power from the wholesale power market.  SBEC’s position is that this treatment by LCRA is unfair and discriminatory. 

Because we did not extend the power contract with LCRA, SBEC and the other 9 utilities have no access to the market, while those utilities that extended with LCRA have this capability today.  Not only is SBEC prohibited from buying a portion of our power on the competitive market, we are absorbing the cost of lost revenue to LCRA because they allowed the extended customers to purchase a significant portion of their power on the competitive market.

Breach of Contract Issued

Because of this discrimination, which is prohibited both under the contract and under the LCRA Act, SBEC sent LCRA a letter on June 28 informing the LCRA that they were in breach of the long-standing Wholesale Power Agreement.  Specifically, the wholesale power agreement included a “uniform rate clause” which obligates LCRA to offer the same rates, including pricing alternatives, to all of its wholesale electric customers.  SBEC also complained about LCRA’s charging of discriminatory rates and its decision to accelerate payments of its long-term debt.  Six other wholesale customers filed similar notices of breach as well. LCRA had a 30-day window to cure the breaches – or to at least try to cure – the breaches.  LCRA made no attempt to remedy the breaches. 

LCRA Files Temporary Restraining Order

LCRA’s response was to sue SBEC and the six other wholesale customers that provided notices of breach.  In a lawsuit filed in Travis County, LCRA requested an emergency temporary restraining order to keep us from terminating the wholesale power agreements.  On July 24, a hearing was held in the 53^rd Judicial District Court, where Judge Scott Jenkins took no formal action on LCRA’s request.  Based upon the parties’ agreement, Judge Jenkins set the case for an expedited hearing on August 27 to consider the request for temporary injunction. 

Utilities Issue Letters of Termination

Despite LCRA’s lawsuit, at no point was SBEC or any other wholesale customer enjoined from taking action.  Since LCRA did not attempt to cure anything, SBEC and the other utilities issued notices of termination on August 13 as allowed by the contract when the alleged breaches have not been cured. 

LCRA Drops Injunction Request

Hours prior to an injunction hearing on August 27 in Travis County, LCRA attorneys notified SBEC that LCRA was dropping its pursuit of a temporary injunction against it and the other customers.  At the hearing, the court heard arguments from the parties as to whether the case should be tried in Austin or transferred to other counties.  A ruling is expected soon and SBEC will continue to defend its members’ interests in this litigation. 

SBEC to Purchase Power from New Supplier

As noted, LCRA never attempted to fix the concerns that led to the notice of breach, so SBEC exercised its contractual right to terminate the agreement early.  LCRA’s decision to drop the temporary injunction removed the last potential obstacle for SBEC and the other utilities to purchase power from a more competitive supplier beginning on September 13.  The switch to a new provider will be seamless and members will not notice any change.  SBEC managers are confident that we will be able to replace the LCRA power supply with very competitively priced power supply deals.  We will be providing this information to our member-owners in another issue.

A Responsible Approach

For months, SBEC and other similarly situated utilities, Fayette Electric Cooperative, the City of Seguin, the City of Georgetown, Central Texas Electric Cooperative, the City of Boerne, and Kerrville Public Utility Board, attempted to address concerns with LCRA without termination of the Wholesale Power Agreement.  None of these municipalities or cooperatives is in the habit of initiating litigation.  Your Board takes this very seriously, but in the end, it was determined that the only responsible approach for us to take was to begin with a Notice of Breach, giving the LCRA one last opportunity to negotiate on our issues.  This lawsuit is the way LCRA chose to respond. 

As we move forward, to benefit our member-owners we will continue to assess additional options for seeking recovery of damages from LCRA.  In the meantime, you can rest assured that SBEC’s Board and Management will continue to provide you with cost-effective, reliable electric service.  It is likely that new developments will arise prior to publication of this issue of Texas Co-op Power magazine.  Please know you may expect that we will continue to keep you fully informed as this issue progresses.

August Co-op Power Magazine Article

August 1, 2012

It is quite possible that you have already read San Bernard Electric Cooperative issued a “Notice of Breach” to the Lower Colorado River Authority (LCRA) as it pertains to our current wholesale power contract.  As most of you are already aware, SBEC declined to renew the contract that would have locked us in with LCRA through the year 2041.  The LCRA customers who extended their power contracts through 2041 are allowed to get a percentage of their power needs from sources other than LCRA (as defined in the new agreement).   The wholesale customers who extended their contracts have avenues of cheaper wholesale power.  LCRA will not allow the customers who did not sign the same option.  In effect, we are being penalized for not signing.  Currently we are not able to gain access to the “open wholesale market” until June 2016, when our contract runs out with LCRA.  As it stands, LCRA is preventing the lowering of the wholesale power cost to our members and we feel that is just not right.

The contract that was submitted to us by LCRA at the time of renewal was an EXTENTION of our current contract and not a new contract. LCRA’s wholesale customers all currently operate under a contract that has a “uniform rate” clause in it.  This “uniform rate” clause was to ensure that every wholesale power customer would receive the same rates and pricing throughout the terms of our agreement.  In essence, we are not given access to cheaper wholesale power based on the lower natural gas prices that have been prevalent since 2008.   On June 28^th I met with LCRA informing them of the “Notice of Breach” of contract.   Under the contract any wholesale customer who feels that there is cause can issue such breach.  The breach consists of what I have basically outlined in the preceding paragraphs.  The concern at hand is SBEC’s inability to seek other wholesale power opportunities outside LCRA, at the same time, LCRA allowing other customers to do so only because they extended an existing contract.  We have met several times with LCRA management to avoid having to file a “Notice of Breach” but such talks proved to be non-productive.

Seven of LCRA’s wholesale customers gave notice on June 28^th.   Along with SBEC, Central Texas Electric Co-op and Fayette Electric Co-op also issued similar breaches.  Municipal utilities consisting of Seguin, Boerne, Kerrville and Georgetown did the same.  LCRA has 30 days to review the breach and issue a response.  By the time you read this we will either have a remedy to the breach or further action has taken place. 

SBEC management considered this step very carefully prior to taking action but it was you, our members, that we felt we needed to fight for.  Electricity prices are high enough and to be denied ways of reducing them when other LCRA customers can enjoy that luxury is just wrong. 

Until next time, take care.

June Co-op Power Magazine Article

June 1, 2012

I thought this month I would give you an update on our wholesale power contract pursuit.  SBEC has contracted approximately 60% of our power needs beginning in 2016.  The remaining 40% is still being negotiated with several power marketers.  The 40% remaining is our peaking power needs.  Last month I thought we had it nailed down but the Texas Public Utility Commission (PUC) announced that a state-wide power shortage was eminent this summer.  The pricing for wholesale power shot up dramatically immediately following the PUC statement.  If I were not in the marketplace looking to sign a deal, the pricing increase would almost be laughable.  This increase is based on pure speculation but, this is the world we now live in.  I remember the days when electricity was not a commodity and now that it is, electricity will always undoubtedly be subject to speculation.  As of now we are still working with the marketers to sign a contract that is not punitive to our membership.  I will let you know when we do.

As we start June, let’s all hope that it is not as hot and dry as last year.  I’ve become accustomed to the summer days that this region offers.  (Well, let’s just say that I can now tolerate them after 31 years.)  Last year was a horse of a different color - it was just plain miserable.  As I mentioned earlier the Texas PUC is already warning people of the potential shortfall of electrical generation this summer.  It is based on the prediction that we will have another summer like last year.  If we do experience an extremely hot summer there are means in which we can all help to reduce the possibility of suffering rolling blackouts.  We simply reduce our electrical needs during the day’s electrical peak which is usually from 3 - 7 p.m.  Setting thermostats up a couple of degrees, waiting to run the washer and dryer until later in the evening and turning off all unused appliances will help.  You can go to our website for an extended list on how we can all work together to reduce the possibility rolling blackouts this summer.

If you do visit our website we have posted pictures and a video from SBEC’s annual meeting that was held on May 19th.  If you had a chance to attend this meeting, let me say thank you one more time.  Without member participation it would be hard to operate San Bernard Electric Cooperative - a job I feel truly blessed to do.  And if you have suggestions on what you would like to see at next year’s annual meeting, please drop me a note or a phone call.  After all - it is YOUR meeting.

I wish all of you a happy and safe summer. 

Until next time, take care

SBEC To Install New Metering System

April 15, 2012

San Bernard Electric Cooperative has utilized an Automatic Meter Reading (AMR) system to facilitate daily/monthly meter reads on most residential meters. The AMR system was primarily used for billing purposes since 1992. In recent years, the AMR system has also been used to complement our Outage Management System, giving us the opportunity to confirm / predict outages and confirm outage restorations.

The current AMR system, being 20 years old is no longer being supported by the manufacturer and it is time for SBEC to look to the future for a more sustainable and useful system. Think about the computer or cell phone you used twenty years ago…..

SBEC is working with SENSUS, a metering company, to install a new Advanced Metering Infrastructure (AMI) system. This new system utilizes a radio frequency communication network as opposed to the current power-line carrier communication system and will be used to read all SBEC meters, residential and commercial. The new AMI system will offer:

· Improved Efficiency – reading all meters, residential and commercial, remotely will be more cost effective than having SBEC personnel drive to remote locations monthly.

· Improved Reliability – Having a two-way communication with the AMI meters will enhance SBEC’s outage management system by more accurately determining outage locations.

· Improved Power Quality - The AMI system will report variances in voltage and other line conditions that will help SBEC maintain a more reliable power distribution system.

· Improved Customer Service – The AMI system will allow SBEC to offer our members more timely information regarding their energy consumption, which will help members make wise decisions about how they use energy in their homes.

SBEC understands that with change, members will have questions and concerns. Some common questions that usually accompany a metering system change are as follows:

Q. Why is SBEC changing out our meters?

A. Because the technology of our current infrastructure, installed in 1992, is no longer supported by the manufacturer. SBEC has changed meters at several locations to conduct the pilot project (testing) of the new metering infrastructure in order to assure the reliability of the technology.

Q. What type of meter is SBEC installing?

A. Sensus, AMI-digital meters, that collect energy consumption and power quality data. This data is transmitted to SBEC via a licensed, secure radio frequency signal for billing and outage management purposes.

Q. When will I receive a new digital meter?

A. The infrastructure must be in place before every member receives a new meter. SBEC will begin to install equipment for the infrastructure throughout the SBEC territory by the end of 2011. You will be notified prior to meters being installed in your area.

Q. What other functions will the new meters have?

A. Once meters are installed and processes are in place, members will be able to view THEIR meter data through the SBEC website. This information can be utilized, by the member, for monitoring detailed energy consumption and verifying energy conservation measures. 

Operation Round-UP

March 15, 2012

I’m sure that you have heard about the fires throughout the state and how devastating they were.Sadly, we had members experience this tragedy first hand.Our heartfelt sympathy goes out to each of you that were touched by the fires.Your Board voted to waive the current bills of all residences destroyed by the fires.This gesture is one that sets us apart from the investor-owned utilities.Those affected were OUR neighbors in OUR neighborhoods and it shows we care about our communities.I would like to take the time to thank each of the Fire Departments and Volunteer Firemen that put their lives on the line fighting these fires.Without the dedication of these men and women, the devastation that hit our communities could have been so much worse.To these good folks---San Bernard Electric Cooperative thanks you!!!!

I know I have mentioned Operation Round-Up before and now is another opportunity to do so.Events like the recent fires are exactly why we have Operation Round-Up to help families that face personal tragedies from events beyond their control.Besides, would you really feel that much pain if your bill was rounded up to the nearest dollar? I bet not.Just think of how much you could help a person that lost everything they owned in a fire.Beginning January 2012 we will make Operation Round-Up an “opt-out” option.If you choose not to participate, please contact one of our Customer Service Representatives by calling your appropriate office and let them know.With that, I will sign off by wishing each of you a very Happy Thanksgiving Season.Please be mindful of all the good things that your life brings you and how you touch the lives of others. 

February Co-op Power Magazine Article

February 1, 2012

I hope everyone was as thankful as I was for the small amount of rain we received over the Christmas holiday weekend.  Even though it kept my grandkids inside destroying my home, I was certainly grateful for it.  Let’s keep our fingers crossed as we will definitely need more rain to help us out this next year.  In a time where most experts are predicting a short fall of electric generation, a lingering drought will only make matters worse. 

It takes water to keep electric generators operable.  Water is used to cool the units as they are running and without adequate water supplies some of these generators will be forced to shut down.  This will only tax the sustainability of our electric grid.  These aforementioned experts are predicting rolling black-outs in high electricity usage times.  So as thankful as I was for the rain we received---we certainly need more.  It’s going to take quite a bit to fill the cooling lakes up to near normalcy. 

I wanted to mention some comings and goings that has and will affect the cooperative.  Over the Thanksgiving holidays one of our former Directors, George Sebesta, passed away.  George served as a Director for your Cooperative for 36 years.  While serving on the Board, he helped shape the way the Cooperative runs today.  He was an outstanding leader and one I considered a friend and mentor.  He always kept the membership utmost in his mind when tackling a situation for the betterment of the Cooperative.  Most of all I think I will miss his smile.  George always had a smile and a kind word.  We will all miss him and our thoughts and prayers are with his family.

The Cooperative will soon be without the services of two men I counted on greatly over the last ten years.  John Silva (District Director) and Bruce Mueller (Business Group Manager) are leaving but for two distinct reasons.  John retired from SBEC on January 3^rd.  He worked for us for 10 years at the Fieldstore branch office.  He came to us from a neighboring cooperative and his expertise and wisdom will be missed.  We wish him well in his retirement.

Bruce Mueller is leaving SBEC to become General Manager of Wheatland Electric Cooperative in Kansas.  He also came to us with a ton of electric utility experience.  Bruce helped reduce our long term interest debt, saving this cooperative and its members quite a bit of money.  We wish him continued success in his new position.

In closing, I want to thank the members that called in commending us on the capital credit refund that was posted on your December bill.  We were low key about this year’s refund because we didn’t know exactly how much we could return until later in the year than normal.  Most of the refund was a direct result of the extremely hot summer and partly because of last February’s winter spell.  In essence, we sold more kilowatt-hours than was budgeted.  Thus, we were able to return over 3 million dollars back to the membership in capital credits.  Your Board has elected to return over 9.5 million dollars in capital credits over the last 3 years.  I hope you appreciate this as much as I do.

Until next time, take care.