September 2005

Manager's Message

Update

I want to furnish a short update on NPEC Operations activity. Electricity continues to be the fuel source of choice locally this year. Our new service and construction activity has increased dramatically in comparison to the last few years and members requesting service are waiting at least two weeks for us to get them built. We appreciate everyone’s patience but hope to continue this growth trend.

Many of the new services have been for homes and oil field related loads. The Canadian area continues to be extremely busy and residential housing continues to be in short supply so many of our new residential loads are being built in that area. Gas wells being drilled in our southern area seem to be producing a large amount of water. As a result, several saltwater disposal wells have been drilled and electricity is being used to pump that water back into an appropriate ground formation. Irrigators have shown a lot of interest in pumping water with electricity since natural gas and diesel prices have held at high levels through the summer and numerous wells have been converted. The coop has also built line for a new swine facility south of Farnsworth for Texas Farms. This is a large expansion program for them and will be a valuable load for the cooperative as well.

One of the negative aspects of the workload that has developed this year is that the cooperative has yet to accomplish some of the maintenance projects that were planned. We have been trimming trees that are causing the most reliability problems and will continue with a contractor as soon as he is available. If you notice trees contacting our lines, please let us know about them so we can trim them back. Tree growth has been extreme the last two years due to abundant moisture. Pole inspections will also continue this fall by contractors that sound and bore each pole looking for heart rot and decay around the ground-line. Our construction crews will replace the rejected poles as soon as time permits. We also plan to increase the conductor size on several miles of line where voltage drop may become an issue due to anticipated growth.

Your board of directors has been evaluating the current line extension policy in an effort to maintain what they consider to be a fair balance between the responsibility of an individual member and costs that should be shared by the cooperative. If there are any changes made, they will become effective at the beginning of 2006. The board also recently considered the topic of patronage capital retirement for 2005. During the July board meeting, the directors determined that the cooperative’s financial condition justifies the retirement of a portion of that equity so $700,000 from the 1985 member allocations and the 1993 G&T balance of $98,168 will be retired by the end of this year. I anticipate checks will be sent before November 15th.