2021 Annual Meeting Message
Twenty years ago, to this very day we and the entire world watched in abject horror as the deadliest terrorist attack ever to occur in the United States claimed the lives of nearly 3,000 Americans. It is appropriate for us to pause for a few moments to reflect on the awful day that changed our lives and perspective in so many ways. In similar fashion, our lives were dramatically changed again scarcely one year ago when fierce wildfires ravaged the area served by CPI in the Santiam Canyon and the communities of Detroit, Idanha, and Marion Forks. Fires were still active, and smoke was thick when our line crews and support personnel moved in to begin the long recovery process, and we haven’t stopped since.
Last year about a month after the fires began I was given the opportunity to address several of our state’s local and national leaders and several officials from FEMA, the Federal Emergency Management Agency, including then-FEMA administrator Pete Gaynor, as they toured Oregon’s wildfire-damaged areas. I assured them that CPI would work with these communities to help them rebuild and that they would end up with an even better electric system than they had before, BUT we would need lots of help from FEMA.
And they have come through for us. Our staff has been working continuously with FEMA since late last year to document more than $20 million in damages and temporary repairs, then identify and engineer multiple ambitious projects to build a more hardened, resilient power delivery system, much of it underground. Last month we broke ground on the first of those projects to install an underground power system on the east side of Detroit. This is an impressive achievement less than a year after the wildfire event and serves as a great example of what can be accomplished when government, local communities, and private industry work together, and we are proud to be part of this effort.
Many factors are making this kind of work even more difficult than normal these days, not the least of which is adjusting to life with COVID-19. On that note I want you to know that to date we have had no work-related outbreaks. In fact, we have had no lost time injuries for nearly two years despite facing the dangers and difficulties of restoring service damaged by last year’s wildfires and separate snow, wind, and a massive ice storm earlier this year. CPI employees’ efforts were recognized recently by another first-place safety award – our fifth consecutive first place award – from the Northwest Public Power Association.
The challenges we face are considerable. Supplies of nearly every material we use – wood, steel, copper, aluminum, plastics – are severely constrained by both production and delivery problems. Equipment orders for transformers, switches, reclosers, and vehicles are also several months out and in many cases more than a year, if they are available at all. The recent damage left in the wake of Hurricane Ida through the Gulf Coast and the eastern U.S. compounds these problems, placing even higher demand on materials and equipment. We are also feeling the effects of Pacific Gas & Electric’s massive effort to harden its electric system in California, both in terms of straining local material and equipment supplies and labor.
Taking these and other developments into consideration, such as current inflationary pressures, ongoing system maintenance, ordinary system capital improvement projects, and the need to bring in new capital as we retire legacy capital credits leads me to announce that the time has come for CPI to increase rates. Effective with bills mailed starting October 1st, CPI rates will increase by 6.2% or $7.25 per month for the average residential member using 1,100 kWhs. We would prefer to make more modest adjustments each year if and when necessary, but deemed it prudent to delay needed rate action last year to give more time for members to adjust and recover from the effects of the coronavirus pandemic and the resulting economic downturn. Additional information about the rate increase is available on our website.
My last topic today is broadband. For the past two decades CPI and Pioneer Telephone Cooperative in Philomath, now Pioneer Connect, have jointly owned Casco Communications, better known as PEAK Internet. During that time PEAK has provided retail broadband service to Pioneer’s members in Benton and Lincoln counties, as well as other subscribers within CPI’s larger service area. In August of last year Pioneer Connect made a business decision to exit the partnership in order to provide retail broadband service to its members. Consequently, CPI is now the sole owner of PEAK Internet.
CPI and PEAK have ambitious plans for the future to bring state-of-the-art broadband service to unserved and underserved areas within CPI’s 6-county area and beyond. Later in today’s program we will hear from PEAK’s CEO, Rick Petersen, as he shares some of the exciting developments at PEAK this past year. So, stay tuned. Broadband has captured the interest and imagination of the entire country and CPI and PEAK are diving squarely in the middle of it.
I consider myself an optimist but also a realist and so in these trying times I’d like to tell you that the coronavirus pandemic will soon subside, drought and wildfire conditions will ease, inflation will be tamed, and things will get better. I truly believe that things will get better but for now we need to hunker down and weather these storms, and that is exactly what we will continue to do. Our focus is to make a positive difference in the many areas over which we have at least some measure of control and influence in our never-ending mission to provide you with clean, affordable, and reliable electric service. We are honored to serve you today and into the future.