CEO Message — January 2021

Posted: Tuesday, January 5, 2021, 12:00 am

Planning for Intensified Growth in 2021

Brandon Wittman headshotI've written and talked a lot about our growth at Yellowstone Valley Electric Cooperative (YVEC). We certainly continue to grow at a strong pace, however that trend has intensified over the last several years. From 2003 to 2013 growth, as measured by the number of meters added annually, averaged 350 meters per year. Since 2013, that average is now over 450 meters per year. YVEC serves in Yellowstone and the 5 surrounding counties. Our proximity to Billings is what makes our co-op one of, if not the fastest-growing electric co-ops in Montana. Having surpassed 21,000 meters on our system, we continue to focus on power quality and system integrity.

The challenge of being a growing electric co-op truly comes from the work it takes to stay ahead of that growth. Obviously, the more meters that are added at YVEC the more taxing it becomes on the existing utility plant and yet we simply cannot allow the power quality to wane on our system. When we upgrade our plant, whether it's an individual pole or a large substation transformer, we plan on that item being in service for 30 years. In other words, we must make sure that all improvements have the capacity to serve any and all loads that will be added in the future. That is why we are constantly reviewing system data, developing work plans, and making system improvements. Our last three work plans, which span the last 15 years, have included $52.8M of investment into our plant. These projects include 30 miles of tie lines between substations and 90 plus miles of existing line upgrades. We have also built 2 new substations, upgraded 8 existing substations, and added 7 miles of new transmission lines. Additionally, we have made some significant investments in technology like digitally mapping our entire system, implementing iPads, and an outage management program for every crew member, and a meter system upgrade. All this work was done while also adding over 6,500 new meters to our system in that same time frame.

We fully expect the growth trend to continue in our service territory. That is why our 2021 construction work plan is quite aggressive, like the work plans of the past few years. We will rebuild our Billings and Acton Substations with new larger capacity power transformers. These substations have seen enough growth to require the needed upgrade, while also meeting an opportunity to be able to tie them together and transfer load between them. Additionally, YVEC has purchased new property in the WestBillings area for another much-needed substation to support future growth, specifically the fever-pitched activity on the West-end. The new substation, named the Central Substation, is located on the comer of Central Avenue and Shiloh Road, and is currently under construction. It will take about a year to build. The Central Substation will tie in with our other three West-Billings substations, giving us many years of growth capacity and some excellent back-up capability in the area. 2021 work will also include some distribution line maintenance and additions, systematic pole replacements, and the addition of backbone lines into new and existing subdivisions. With a total utility plant of $95 million, there is never a shortage of work.

While growing for any business is challenging, YVEC is strategically positioned to meet the challenge. In other words, we have a plan in place to meet the needs of our existing and new members alike, all while keeping our rates steady. Through great foresight by your Board of Directors, they have assembled some excellent forecasting, financial planning, and budgeting. YVEC continues to not only stay ahead of the load growth by investing heavily in our plant, we do so while not raising rates. Our last rate adjustment was May of 2011 and even with the large capital outlay, which will continue for the foreseeable future, there will be stable rates again in 2021, meaning we have gone a full IO years without a rate adjustment. This is a great milestone for the members of YVEC! While we are all longing for some change and a sense of normalcy in 2021, I think you'll agree not changing rates, especially for 10 years, is indeed a positive note to build on.

Brandon J. Wittman
CEO / General Manager