REA director discusses increasing costs at annual meeting of members

By Lisa Phelps
Posted 3/13/24

WHEATLAND – Addressing the membership during the 87th annual meeting of the Wheatland Rural Electric Association, general manager Jason Wright explained the electrical infrastructure is aging, …

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REA director discusses increasing costs at annual meeting of members


WHEATLAND – Addressing the membership during the 87th annual meeting of the Wheatland Rural Electric Association, general manager Jason Wright explained the electrical infrastructure is aging, costs are increasing, but the REA board is doing everything in their power to keep electricity affordable for its members.

A member-owned cooperative, WREA services 4,200 square miles in Platte, Goshen, Laramie, and Albany Counties, and gets power through Tri-State Generation and Transmission Cooperative. Board president Bob Brockman explained the WREA is locked into a service contract through 2050 to buy 100% of their power through Tri-State.

Brockman said Tri-State is communicating to WREA, though nothing is finalized, they may be increasing rates every year by a rate of two to four percent, pending federal approval, with no end in sight. He added the only thing that could stop it is the fact all rate increases must be approved by the Federal Energy Regulation Commission in Washington, D.C.

Federal regulations and the push for renewable resource-generated energy to be at 80 percent of all supplies by 2030 has resulted in a lot of regulations and changes in the electrical industry, Wright said. Add to that increased costs of supplies (some things are 40% more expensive, and some 200% more expensive than pre-Covid rates), and you get the picture of a vastly changed method of operations for all utility companies.

“The last few years have been a whirlwind for us and unfortunately, there is no end in sight,” Wright said.

Wright became the general manager of WREA operations in 2023, and explained the first thing he did was send a letter to let people know their rates were going to increase.

“That was not a good way to start out,” Wright joked, but explained the increase was a pass-through from the power supplier (Tri-State). “In order to stay viable, we had to pass down the cost.”

An Aging Infrastructure

Another issue facing the utility company is an aging infrastructure. Wright shared a bit of the history of the local electrical grid, which began in 1936. Some lines and electrical poles were put in place in the early years, but the world war halted much of the progress. In 1947, line installation resumed and over the next decade, most of the poles and lines were put into the grid utilized today by the WREA.

Wright said there are nearly 30,000 poles, and though failing poles are replaced en masse every year, many are still over 50 years old and are failing at a greater rate than ever before. In testing approximately 2,600 poles, “We used to have a one- or two percent fail rate, then it was averaging three or four percent each year. Now we have a six percent fail rate, and some areas are 10 percent. Some of it is because of the treatment that was used to preserve them, some because of the tree species used. They are all just going to fail eventually,” Wright said.

“If we replaced 600 poles a year, it would take 50 more years to replace them all,” Wright said, emphasizing it isn’t enough to keep the infrastructure of the electrical grid reliable.

“We have to do more. We have been trying some things, but to keep a viable system, we have to do it now or the system will fail. If we don’t, it will fail. Maybe two or three years down the road the system could crumple.”

He gave the example of the Garret substation WREA rebuilt by YO Ranch Estates outside Wheatland. “It was at the end of its life, and we wanted to take it out on our schedule,” Wright said, emphasizing it is better to replace infrastructure by choice than have it fail during use.

In the process of rebuilding that substation, “Covid happened,” costs went up, and delays occurred, but it was finally finished in December 2023. Though the price tag was $1 million, he explained the members are not paying for it in the same fiscal year the cost was accrued. That would be nearly impossible to pay for, Wright said. Instead, the board has costs like that amortized over a period of 30 years to spread out the payment. In explanation of typical expenses, Wright said the WREA has a 20-year work plan, but usually utilizes a smaller four-year work plan to calculate and pay for most expenses incurred by the cooperative.

“We try to spread out the money to keep rates down on things we can foresee, but then you have incidents like the storm that hit in 2021, we didn’t see that one coming,” Wright said to explain when the longer-term work plans come into play.

Modernizing Systems and Headquarters

Wright said 2023 has been a year of change. “It has been more than hectic changing the entire accounting system,” Wright said. The process of modernizing the software, hardware, billing systems and all related security systems started in 2020 and just finished last year. “To say that it has been taxing is an understatement. It is like changing wings on an airplane in flight, when you take every record, you have from 1936 forward into a new system - and try to get all those systems to talk to each other.”

Wright explained, while there are still things being worked out, giving members the ability to use SmartHub to track their electricity usage and pay their bills has been successful with over half the customers signing up to use it.

Wright also said much-needed updates to the headquarters were completed. He explained the building was well-built in 1966, so they were able to just make the additions they needed to make room for the vehicles and equipment that are required for maintaining utilities in today’s world.

“It’s a tough ol’ game, we tell you. We know Jason is working hard to try to keep reasonable fees and the lights on, and the linemen impress me to death. They do a hell of a job keeping everything going,” Brockman said.

Member Questions Answered

One member asked about the status of the co-op’s fight against renewable energy regulations on public power services being pushed by the federal government and Colorado politics.

“We’ve inter-pleaded and joined other co-ops in Wyoming, and so far the only thing we’ve accomplished is to rack up the lawyer bill…It’s an ongoing deal and they’re still shutting down coal plants that still work,” Brockman said.

In response to a question from the floor about the how the Black Hills project would affect the WREA grid, Wright said Black Hills Project is a major transmission line so it would fall

under the transmission tariff and could theoretically be “tapped into” if needed in the future, but is not likely for the WREA with its Tri-State contract and the fact the price tag of a 230 line and substation starts at $20 million.

Another member question asking how the “rare earth minerals” and “slaughterhouse” potential projects could affect the grid, Brockman answered, “There are a lot of rumors.” He explained, after inquiries on requirements for electricity by the landowner proposing a slaughterhouse near Guernsey, he has heard nothing more.

Wright said the individuals involved with the Rare Earth has contacted him, but it is unknown whether there will be an office only, or a full processing operation, “But I understand it will take five to ten years for permitting. It may be able to go faster, but the good news is, there is a good transmission line out on Tunnel Road, so we can accommodate their needs.”

Brockman said he read an email Thursday morning that eluded the permits may be able to be expedited some to shorten the timeframe. “There is also another entity in competition [in the rare earth mineral market] from Crook County that is closer to get into operation, but nobody has asked for power from us yet,” Brockman said.

Board Members Elected

Also at the meeting, two open 3-year positions for district #2 on the WREA board were agreed by members present to be filled by incumbent candidates Bob Brockman and Sandra Hranchak. Brockman and Hranchak were running unopposed for the positions.

Tenure Pins

Three employees were recognized with tenure pins for their years of service to the WREA. General foreman Jared Call was recognized for 20 years of service, and journeyman lineman Chuck Hiatt and apprentice meter technician Poston Anderson both received recognition for five years of tenure. Member services manager Al Teel was recognized for 41 years of service, and it was announced this will be his last meeting as he will be retiring.