Socorro Electric Co-op finding financial footing

Though still mired with legal troubles, Socorro Electric Cooperative is showing signs of getting back on its feet financially.

General Manager Joseph Herrera gave a positive report on the financial picture when he reviewed the monthly USDA Rural Utilities Service Form 7 report with the co-op’s board of trustees at its Nov. 22 meeting. He said the margin, or profit, for October was a healthy $629,000.

“We’ve been saving money and reducing expenses,” Herrera said. “Year-to-date, our margins are looking better.”

Socorro Electric failed to meet its margins the last two years, sending it into technical default on approximately $23 million in federal loans through RUS.

Herrera said one way the co-op has reduced expenses is by relying less on outside services and doing more things in house. The pole replacement that’s underway is one example of how the co-op has cut costs by utilizing its own personnel, he said.

The board took other action on items presented by Herrera that are designed to save the co-op money. One was to consolidate its inventory by entering an integrated supply agreement with HD Supply, a wholesale distribution company. Another was to transfer ownership of the Burris substation to Tri-State Generation and Transmission, Inc., which provides power to 44 rural electric cooperatives in the Southwest.

Other good news on the financial front had to do with collections. Herrera said through a lot of hard work the co-op has been able to reduce delinquent accounts by 19 percent.

At the end of the RUS report, Herrera drew praise from Trustee Milton Ulibarri.

“I’d just like to commend Joseph for doing a good job of keeping expenses down,” he said.

Personnel Issues

There was more good news for the co-op’s bottom line — and for employees, too. The board approved a Presbyterian health insurance plan for employees that will save the co-op more than $50,000 next year. Though it’s essentially the same plan offered to employees now, Albuquerque insurance brokers Tom Frank and Jan Gibson said they negotiated a deal with Presbyterian that lowers the premium the co-op is obligated to pay. Employees will also save on the deductible and the Delta Dental plan, Frank and Gibson said.

The board was presented with several options, including the plan offered through the National Rural Electric Cooperative Association. In the end, it settled on the Presbyterian plan by 8-1 vote, with Trustee Charlie Wagner, who wanted more time to compare options, casting the lone vote against approval.

Co-op employees will also be getting a raise on Jan. 1. The board approved a 2 percent cost of living adjustment along with a 3 percent merit increase.

In addition, Herrera called for an incremental salary correction for employees in the line department. He presented the board a comparison for line department employees at other utility companies that showed Socorro Electric paid wages below the average.

The incremental increase for line workers was included in the motion to give employees raises and will also go into effect the first of the year.

Two other employee-related items were approved by the board.

One is to revise policy, changing the introductory period from three to six months. New employees would be evaluated after three months and become eligible for vacation and benefits after six months, if their work performance was deemed satisfactory. Minor changes were also made to the disciplinary policy.

Also, the board approved Herrera’s recommendation to hire three new employees — an apprentice lineman, someone to assist at the front desk in member services and an executive assistant.

In Other Business:

• Herrera updated the board on the status of proposal made by Duane Baker of Puerto Seguro, a day shelter in Socorro, to develop a program that would offer co-op customers the option of rounding up their bill to the next dollar. The spare change would be placed in a fund and distributed to low-income families that need help paying their electric bills.

Baker spoke to the board about the proposal at the two previous meetings. Puerto Seguro would serve as administrator the program, which Baker hoped could be implemented before the cold weather hit.

Herrera said there were some logistical issues that need to be straightened out, including modifying computer software, but he was hopeful that program could begin as soon as the first of the year.

• Trustee Donald Wolberg, Socorro Electric’s representative on the Tri-State board of directors, talked about the potential impact continuing to list the Dunes Sagebrush Lizard under the Endangered Species Act could have on the energy industry. He said thousands of jobs were at risk, as well as millions of dollars in revenues to the state, and it’s an important issue impacting all 44 co-ops that get power from Tri-State.

Last Thursday, the U.S. Fish and Wildlife Service decided to extend listing the lizard under the ESA.

• The board approved travel for General Manager Herrera to the National Rural Electric Cooperative Association convention in San Diego next March.

• The board held an executive session to discuss the countersuit against the co-op that came as the result of the co-op’s decision last year to challenge three bylaws that call for increased transparency. While the co-op lost the lawsuit, a countersuit calling for class action certification is still pending.

Lawsuits filed against the co-op by former managers were also discussed. No action was taken.

• The board set the date of the next meeting for Wednesday, Dec. 28.

 

-- Email the author at tslast@dchieftain.com.