Southern Power District 2007 Annual Report

Customer Services Synopsis:

Customer Services is behind the revenue received each year by the district. We generate all the bills and process all the payments made. Each month is a separate process of reviewing customer and employee meter readings to ensure accuracy in all of our billings. When readings don’t look reasonable, we double-check them before creating bills that otherwise may not be correct. Sometimes a meter slows down or stops–never speeding-up for any reason we have seen. While our goal is to be sure that customers are billed fairly for their energy usage, we also appreciate avoiding confrontations with customers over bills that seem outrageous. The district’s customer services staff has the years of experience to accomplish that.

Credit & Collections

Southern has been noted as having relatively small losses from year-to-year of unpaid account activity. In 2007 that tradition continued. In spite of revenue increases with rising rates, Credit Manager Darrell Detlefsen has been able manage this department and continued the downward trend in uncollectible numbers. Some of that is undoubtedly helped by deposits collected from new customers without a solid credit history. Also, existing customers who are slow-to-pay and require vigorous, “personal collection assistance”— our lineman appear at their door for payment or the customer can incur a “de-lighting” experience. Because of the higher rates enacted for 2008, we ended 2007 by raising the district’s minimum deposit amount from $150 to $200 on non-total electric accounts.

Marketing & Energy Services

Sam Reinke manages this department providing support for all energy incentives and special services. Southern’s incentives continue to promote power use for heating in the winter-months along with more efficient means of cooling in the summer. To achieve those goals the district finances the installation of electric heat pumps (geothermal and air-source) with incentive dollars for new homes and other structures, as well as incentives for converting an existing service to electric. Electric water heaters are also used as an incentive for any residential application needing to replace a fossil-fueled water heater. MarathonTM brand water heaters are the hallmark of this load-building marketing program. With fossil-fuel rates skyrocketing the past few years, this is another way we can help customers control their increasing energy costs by offering an alternative, but cheaper to operate fuel source for their energy needs.

In 2007 there were 145 water heaters either given away (if they had a load management time clock included) or for a slight service charge, and 65 heat pump incentive payments of $400 each given out to eligible customers. Since the inception of adding load management to our free or nearly free water heater program, 297 water heaters have been installed with the time-clock feature. Since the timers are programmed to shut-off the water heater during the district’s peak power-use times, it is calculated that 750 kW of demand has been cut from our wholesale peak billings. This is the equivalent of nearly 1000 horsepower of irrigation load we also operate a load management system to control (see the Irrigation Services section of this report). Sam monitors new services being added to our lines, and says that of the 168 new residential services installed in 2007, 42, or 25% were totally electric. With continued marketing to the new home customers, we anticipate seeing an increase in the number of total electric homes being built.

Sam also saw a 24% increase in the number of customers installing district maintained surge protection systems in their homes and businesses. These total protection systems are not being marketed by anyone else in the seven-county service territory. This service provides complete structure protection after a $50 installation fee, for only $4.95 a month. Increased storm activity last year may have influenced some of the new interest in such protection.

This past year saw a trend nationally to become more energy-conscious. Energy efficiency is being renewed as a “buzzword” for business and homeowner consideration to save energy and the money to pay for it. Changing the old standard incandescent light bulbs to compact fluorescent light bulbs (CFLs) is becoming a national energy saving activity promoted at all levels – from homeowners to businesses. Southern gave out free CFLs at its customer open houses in Aurora and Holdrege in August.

We also promoted the Energy Star “Change-A-Light” program of the U.S. Department of Energy in October. We also participated with NPPD in their “Switch & Save” CFL bulb campaign promoted throughout their service area in Nebraska which utilized 21 retail stores in our seven counties to provide discount coupons to buy CFL bulbs in those participating stores.

Irrigation Services

The early 2007 ice storm reduced the number of new irrigation services the district had time to build for the summer season. Even with the district enforcing a January 1, 2007 paid date on all irrigation estimates Southern still added/upgraded 198 services accounting for almost 10,000 new horsepower in irrigation load. Continued increases in fossil fuels have driven irrigators to consider the switch to electrically powered systems – and that is mostly center pivot systems.

The 2007 irrigation season was not nearly up to the average for the amount of irrigation water needing to be pumped because of adequate AND timely rainfall. Even with reduced irrigation, the power demand to irrigate did see a number of peak usage days. Without the district’s irrigation load management system in operation, power costs could have been much higher during those few high-use days.

For the third year we voluntarily agreed to control some of our irrigation load on a Sunday when our power supplier, Nebraska Public Power District, requested it. The benefit for NPPD was to reduce the cost of providing power that day when they saw high peak demand for power. This choice to participate on Sundays in the past has prepared us for the mandatory participation the entire state is now facing for the first summer in 2008. Notice the graph below-left that depicts historical irrigation load added.

Billing

In 2007 there has been the usual ebb-and-flow each month of our billing and payment cycle, and eventually the collections effort near the end of the month. That is our routine. However, each day brings new challenges as we deal with the many customer personalities and attempt to meet their expectations. This has been challenging in 2007 as we had to deal with many new concerns in January when the ice storm’s damage interrupted power to some customers for up to 3 weeks! In the aftermath of the storm, in April we added additional charges for the district’s storm-related additional costs. At the same time we started to include NPPD’s additional costs which were passed-on to the district. While we mail an informative customer newsletter with each monthly bill, and also include a brief message on our billing statements, we have to answer all the customers’ remaining concerns and questions either over the phone or in person.

Other information inside the 2007 Annual Report