Socorro Electric to partner with city on project
Socorro Electric Cooperative will assist the city of Socorro with its plan to build a sports facility at the county fairgrounds.
At the co-op’s board of trustees meeting Wednesday, the board unanimously agreed to pursue loan opportunities through USDA Economic Development and in turn loan the money to the city at a low interest rate.
Mayor Ravi Bhasker made the appeal on behalf of the city. He said the city was trying to put together $1.2 million to complete the first phase of the plan, which includes the construction of a rodeo arena and soccer field. The entire project will include three soccer fields and a convention center, he said.
Bhasker said the city and co-op joined in a similar agreement about 15 years ago to add lighting to the softball fields and make improvements to the pool at Sedillo Park. At that time, the city paid back the loan at an interest rate of 1 percent over 10 years.
The mayor said he hoped the co-op would be agreeable to doing the same thing for the sports facility, which he pointed out would benefit the junior rodeo and youth soccer teams.
“So we’re looking at the co-op and trustees to look at this project and, hopefully, apply for the money in two or three months,” Bhasker said.
The mayor said loan applications are accepted quarterly, so he hoped the paperwork could be completed by the end of June to help facilitate the project. He noted the co-op would benefit from increased electricity use at the facility, but it would also be helping the community.
“It’ll be available to everyone, just like Sedillo Park,” Bhasker said, adding that junior rodeo participants would be especially happy. “They’re looking forward to a bigger and better arena.”
The mayor also noted that there was a need for more soccer fields in Socorro, as Sedillo Park can barely handle the local AYSO. He added that the city would benefit economically from a venue that would attract people to town for events held at the facility.
Bhasker told the board that USDA Economic Development actually offered two options for financial assistance. Aside from a loan, the co-op could apply for grant money, but Bhasker thought the loan was the better approach.
“Why not a grant?” asked trustee Donald Wolberg.
Co-op General Manager Joseph Herrera helped answer the question by saying that a grant would require the co-op to make a cash outlay for matching funds. Applying for a grant is also a competitive process, he said, and there was a limit as to how much money was available.
While a loan would affect the co-op’s equity, Herrera said it would not harm the tiers it needs to meet to stay in compliance with loans the co-op already takes with USDA Rural Utilities Service.
Bhasker said a loan would be reflected on the co-op’s books, but the city could guarantee repayment.
“It would go on your ledger, but the city can do an ordinance to obligate payment through lodger’s tax,” he said.
“I think this is extremely important,” Wolberg said of the city’s project. “It brings economic help in what is a difficult time for everyone.”
Rate Increase Coming
The co-op has been experiencing some tough economic times itself lately, but there was some good news to report on that front.
During his manager’s report, Herrera said the co-op had record sales in February, with a margin, or profit, of $324,000.
“You’ll see we have been cutting expenses,” he said in comparing last month with February 2010.
Herrera noted that the cold weather last month was also a contributing factor in achieving a profitable margin. He said progress continues to be made in collecting from delinquent accounts, as well.
Looking ahead, Herrera said the co-op can expect better revenues when rate increases go into effect next month. He said customers can expect to see the increase starting with the mid-April billing cycle.
Customers will see a $6 jump to their system charge and a small increase to the cost per kilowatt hour, resulting in what co-op officials have said will be an average increase of about $8.31 per month for residential customers.
On a related note, trustees talked about expected rate increases from Tri-State Generation and Transmission, Inc., the company that provides the power to rural electric cooperatives in the southern Rocky Mountain region.
Trustee Leroy Anaya, Socorro Electric’s representative to Tri-State, reported that Tri-State was working out different types of rate designs and it may take another six months before it settles on one.
Trustee Charlie Wagner commented that the tsunami that knocked out a nuclear reactor in Japan two weeks ago could have an impact on how Tri-State evaluates nuclear power, one of the cheaper forms of generating power.
Wolberg noted that new regulations aimed at increasing use of clean energy are due to go into effect in 2012.
“The next rate increase could astonish everyone,” he said.
In Other Business:
• Trustee Leroy Anaya was selected as the co-op’s representative to the Tri-State Transmission and Generation board of directors, and also the voting representative to Tri-State.
While trustee Charlie Wagner made the motion to accept Anaya as the Tri-State representative by acclamation, he had an issue with Anaya also being the voting representative for Tri-State.
“As representative for Tri-State, he has an obligation to represent the interests of Tri-State. There could be a time when those interests are in conflict with the interests of the co-op,” he said. “I think we’re better off electing someone else.”
Co-op President Paul Bustamante dismissed Wagner’s concerns.
“I think (Anaya) can use his best judgment,” he said.
Milton Ulibarri’s motion to appoint Anaya as voting representative passed with Wagner casting the only no vote.
• Trustee Luis Aguilar asked about progress of the construction of a new substation in Quemado.
Herrera said the project was a little bit behind schedule due to inclement weather and was currently on budget, but that might not be the case when he gives his report next month.
Richard Lopez, head of engineering for the co-op, later explained that the co-op needed to order about 90 new poles to support the lines over a stretch of the double circuit being installed between Quemado and Springerville, Ariz. The co-op had planned on using existing poles. He said the bidding process to order new poles and to hire labor to erect them had already begun.
Otherwise, Lopez said construction of the Quemado substation was about 95 percent complete. The transmission line is finished, he said, and the double circuit is 65 percent complete.
Lopez said the co-op was paying an SGS Engineering inspector to be on-site full time until March 11, but inspections are now being taken care of in-house.
“That in and of itself is saving us quite a bit of money,” he said.
Lopez added that the Quemado project had garnered a lot of attention for use of a copper-clad wire that will also reduce costs.
• Lopez also reported during the outage report that a 55-foot pole on the San Agustin Plains was knocked down recently by high winds, which caused the VLA to lose power for about five hours.
Other than that, Lopez said there were a few minor incidents of trees falling onto power lines, but overall things held up well against the almost daily windstorms of last week.
• The date of the next board of trustees meeting was set for Wednesday, April 27, at 5:30 p.m.
Contact T.S. Last