OUR F U T URE IS
Bright 2018 ANNUAL REP ORT
INSIDE THIS REPORT
1 3 5 7 9 11
CEO AND PRESIDENT’S MESSAGE
INL AND POWER’S MISSION AND VISION
INL AND BY THE NUMBERS
2018 FINANCIALS
INL AND ACCOMPLISHMENTS
INL AND IN THE COMMUNIT Y
CEO & PRESIDENT’S MESSAGE We have come a long way since the early days of Inland Power. Over the decades we’ve seen advancements in medicine, education, technology and electrification. From our humble beginnings back in
power in home and businesses means
1937 to the present day, Inland Power
not only improved quality of life today,
and Light has experienced tremendous
but more importantly, it ensures a bright
growth and innovation and this past year
future for generations to come. Today,
has certainly been no exception. We live
our focus is clear, it’s brightening your
in a world that is changing more rapidly
present and your future.
than we ever imagined. In 2000, The National Academy of Perhaps, Inland Power’s success can best
Engineering, led by Neil Armstrong
be measured in terms of the ability to
compiled a list of the greatest
brighten the lives of our members. Electric
achievements of the 20th Century. Of the top 20 that made the list, electrification was considered the number one achievement. For us at Inland, that’s not surprising since the vast majority of everything in our lives is dependent on this vital commodity. From the early days when lightbulbs were introduced, to the
1 OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT
electric refrigerator in 1913, to today with the growing proliferation of electric cars, we still believe in the magic that happens every time we flip on a light switch.
TODAY, OUR FOCUS IS CLEAR: IT’S BRIGHTENING YOUR PRESENT AND FUTURE.
Inland Power is pleased to be the largest cooperative in Washington state, but no matter our size we remain committed
$181 million and long-term operating
communities through Operation Round
to our members. We work hard to keep
debt is $62 million. This healthy debt to
Up, scholarships and more (page 11).
your rates low and power reliable through
asset ratio preserves Inland in the top
fiscal responsibility, constant process
ranking of all electric cooperatives in
Inland Power’s founders built a solid
improvements and efficient operations.
the country – a position we have proudly
foundation from which we continue
held for many years.
to stand strong. Looking ahead to our future, we will stay true to our
Our 82 years of service has brought experience and wisdom to our
We also measure our success with an
founders’ vision of providing members
cooperative, but it has also brought the
equity position of 58 percent which
with superior service and value. We
need to replace our aging equipment and
compares total equity to total assets
will continue to strive for affordable
infrastructure. Although our plant assets
- meaning members own 58 percent
rates and reliable service to help us
have served our membership well over
of Inland’s assets. This is a common
remain strong and vital as we continue
the years, we have the duty to replace
financial ratio used by electric co-ops
to brighten the lives and future of our
and improve aging infrastructure in order
throughout the nation and ranks Inland
members.
to maintain a high level of service and
in the top 10 percent of the nation – a
reliability for you, our members.
position we are very pleased with and
This annual report is also an opportune
work hard to protect and maintain.
moment to highlight the contribution of all our employees and board members, past
For that reason, we have embarked on a multi-year plan to replace and upgrade
Serving homes and businesses across
and present, who, by their professionalism
many of our substation transformers
13 counties with safe, reliable and
and commitment, have strengthened the
and other aging equipment. As part
affordable service can be challenging.
image of Inland Power and contribute to
of this plan, during 2018 we spent just
Excellent service requires continuous
our long-term success. We are grateful
over $11 million in system upgrades and
improvement. Whether updating
to you, our valued members, for your
replacements. We are happy to report
technology to provide you with 24/7
support over the past 82 years and we
(page 6) that we are already seeing an
convenience through our SmartHub app
look forward to a vibrant future of serving
improvement in our system reliability
or adding digital meters for faster outage
you.
and expect this to continue well into the
restoration and reliability, you are our
future.
priority. Our mission is our members.
After all, owning your own utility does have its advantages.
Your board and management team have
While we are proud to work hard for
developed a sound fiscal strategy, and
you every day, we’re also honored
this is reflected in a strong year-end
to volunteer in your neighborhoods
balance sheet (page 7). Total assets are
and schools and give back to our
PRESIDENT BOARD OF TRUSTEES
CEO INLAND POWER & LIGHT
OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT 2
MIS S ION
OUR MISSION IS OUR MEMBERS
VIS ION
Be a premier member-owned energy cooperative committed to safe, reliable service at competitive rates with great member engagement and experiences.
3 OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT
A STRONG BELIEF IN OUR MISSION At Inland Power & Light our mission is simple. Our members are the reason we come to work every day. Our members are the reason our dedicated line workers brave the elements and extreme hours to ensure your power is reliable and affordable. It is because of you, our members, that Inland Power exists – which is why your Inland Power board of trustees voted to adopt our new mission statment – “Our mission is our members.” Your board took it a step further and improved Inland Power’s vision statement. Our goal at Inland Power is to “be a premier member-owned energy cooperative committed to safe, reliable service at competitive rates with great member engagement and experiences.” Like our new mission statement, it is all about you – our members. For us, these changes are more than just words. We are committed to putting these words into action to ensure your experiences with Inland Power are consistently the best possible.
Inland Power is honored to sponsor the Junior League of Spokane Touch-A-Truck event each year.
OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT 4
INLAND BY THE NUMBERS 86 MEMBERS PER MILE OF LINE 5.79 MILES OF LINE 7,411 NUMBER OF POWER POLES 101,400 NUMBER OF TRANSFORMERS 31,819 NUMBER OF METERS 42,873 MEMBERS ENROLLED IN SMARTHUB 14,498
TOTAL NUMBER OF EMPLOYEES
15,933 ACCOUNTS
MEMBERS WHO ENROLLED IN SMARTHUB IN 2018 MEMBERS ENROLLED IN AUTOPAY
3,335
9,656
3,548 VIA CREDIT CARD; 6,108 VIA ELECTRONIC CHECKING/SAVINGS
2,667 NUMBER OF MEMBERS ENROLLED IN FLEXPAY 105 ANNUAL NUMBER OF PHONE CALLS 47,882 MEMBERS ENROLLED IN OPERATION ROUND UP:
AVERAGE WEEKLY PHONE CALLS: 921
NUMBER OF NEW SERVICE REQUESTS IN 2018
5 OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT
811
35.1
% Power Supplier
18
% Planned
4.5
% Snow/Ice
7.2%
Manmade
1.3%
12.3%
Fire
1.1%
Tree
Lightning
9.1
% Equipment
4
% Animal
3.6
% Unknown
2018 OU TAGES BY CAUSE
3.8
% Wind
Inland Power is a team sponsor of the West Plains Little League. Go Team Inland Power! OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT 6
AS A COOPERATIVE, OUR MEMBERS MAINTAIN AN OWNERSHIP INTEREST AND STAKE IN EVERYTHING WE DO, AND THAT INCLUDES OUR FINANCIAL STRENGTH. Preserving a strong bottom line is essential for ensuring Inland Power’s ability to deliver safe, reliable and costeffective electricity while planning for the future. In 2018, Inland Power had net margins of $6.26 million and gave back close to $2 million in capital credits to our members.
STATEMENTS OF REVENUES AND MARGINS
BALANCE SHEETS
Net Utility Plant
Non-Utility Plant
Investments in Assoc. Organizations
Cash and Cash Equivalents
Operating Revenue
2018 $ 74,719,000
2017 $ 74,604,000
39,789,000
39,391,000
2018
2017
$ 156,735,000
$ 151,582,000
2,000
2,000
Cost of Power
6,153,000
5,824,000
Operations and Maintenance
9,038,000
8,866,000
200,000
141,000
Consumer Accounts and Marketing
2,435,000
2,503,000
A S SE TS
EXPENSES
Accounts and Notes Receivable
10,587,000
11,424,000
Administrative and General
6,768,000
6,412,000
Materials and Supplies
3,480,000
2,610,000
Depreciation
7,100,000
6,953,000
124,244,000
BPA Prepayment
Other Prepayment
Other Assets
133,943,000
Taxes
4,458,000
4,576,000
859,000
1,033,000
Interest
2,447,000
2,101,000
3,725,000
4,224,000
$ 305,985,000
$ 310,783,000
Total Cost of Electric Service $ 72,035,000 $ $ 70,802,000
EQUITIES, MARGINS AND LIABILITIES
Equities and Margins
105,159,000
100,970,000
Accounts Payable
6,949,000
7,950,000
Long Term Debt
61,612,000
59,861,000
BPA Prepay Long Term Debt
120,858,000
130,924,000
Other Liabilities
8,131,000
7,984,000
3,276,000
3,094,000
$ 305,985,000
$ 310,783,000
Deferred Gain and Credits
OPERATING MARGINS
2,684,000
3,802,000
NET BENEFITS OF BPA PREPAY
1,763,000
1,872,000
NON-OPERATING MARGINS
1,809,000
Net Margins
$ 6,256,000
716,000 $ 6,390,000
EXPENSES
NUMBER OF ME TERS 2014
39,502 39,872 2015
20%
2016
40,352
TAXES, DEPRECIATION & INTEREST
2017
41,086 2018
42,873 7 OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT
25%
55%
ADMIN & OPERATIONS
POWER COSTS
INLAND POWER HAS SOME OF THE LOWEST RATES IN THE NATION Out of 891 cooperatives in the
8.37¢ 9.46¢
INLAND POWER
country Inland Power ranks 14th for lowest rates.
WASHINGTON AVERAGE NATIONAL AVERAGE
12.95¢
AVERAGE RESIDENTIAL RATES FOR 2018 PER kWh
REVENUE
CAPITAL CREDIT RE TIREMENTS (THOUSANDS) 2014
RESIDENTIAL COMMERCIAL IRRIGATION
74% 19% 7%
$1,500 2015
$1,500 $1,500 2016
2017
$1,961 2018
$1,976 OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT 8
INLAND POWER ACCOMPLISHMENTS One of our goals is to provide electricity in such a way that you don’t even think about it—the power is just there when you need it. In reality, much thought and effort goes into delivering electricity to you. We work 24/7 to ensure service is available to you at the flip of a switch. Inland Power finds, develops and uses the latest technology available to proactively look at system improvements, capital investment projects and to be innovative in solving every reliability issue. Dozens of reliability and system improvement projects were completed in 2018. They range from testing transformers, replacing poles, aluminum insulators and fuses to rebuilding several miles of overhead and underground lines. Inland Power is dedicated to serving you and will continue to do so into 2019 and beyond. Below is a summary of some of our biggest accomplishments made over the past 12 months:
ACCOMPLISHMENTS • Crews replaced just over a million
is putting the overhead feeder lines
• Main feeder upgrades were made
and a half dollars of buried cable in
underground. The balance of the
from the West Plains substation,
2018. Three primary areas were in
project will be completed in 2019.
north of Airway Heights. This feeder
Airway Heights, Meadow Lake and the cable to the top of Hoo Doo Mt. north of Blanchard.
upgrade will tie into the Airway Heights • The Hayford/Geiger Road feeders were upgraded to accommodate
substation allowing Inland Power to better balance loads in the West Plains.
larger loads, such as Amazon, coming • Inland Power replaced a total of 700
to the West Plains.
poles in the following areas:
• Significant voltage regulator work was completed in 2018 all around Inland
- Creston area in Lincoln County
• A very inaccessible, overhead feeder
Power’s system. Voltage regulators
- Halfmoon in the Deer Park area
line on Mt. Spokane that was very
help balance the system voltage on
- Spangle
prone to tree damage was placed
lines that are located long distances
- Riparia in Whitman County
underground. This project will make a
from the substation.
significant difference in tree related • FEMA work from the November 2015 wind storm continued in 2018. Half
outages to the Mt. Spokane area this coming winter.
• We replaced approximately 3 miles of wire and replaced multiple cross
of the Newman Lake to Greenbluff
arms on the 34.5 kV transmission
project was completed. This project
system in Lincoln County.
9 OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT
A LOOK AHEAD As we look ahead to our future, we look forward to achieving even more improvements and accomplishments in 2019. We at Inland Power know that in order
Inland Power Four Lakes foreman, Kyle Hasenoehrl
to continue providing safe and reliable energy at affordable rates, our infrastructure must be reliable and up-to-date. Your Inland Power crews are currently working to implement the 2019 work plan. Here is a snapshot of what will be working on in 2019. • Replacement of aging underground cable throughout Inland Power’s system.
• Relocate lines for Spokane County’s Aero Road roundabout and three roundabout projects on SR 902
• Replacement of approximately 800
for WSDOT.
poles in the following areas: - Newport in Bonner County - Moab, Trentwood and Bigelow areas
• Replacement of power transformer at Pomeroy substation in Garfield County.
in Spokane County - Draper substation in Lincoln County - Diefe substation in Lincoln County • New Hallett & White substation feeder
• Complete second half of FEMA project from Newman Lake to Greenbluff. • Continue the wire replacement of
to help with new large loads in the
the 34.5 kV transmission system in
West Plains.
Lincoln County.
• Bigelow Gulch Road line relocate for county road upgrade to include Argonne to Forker Road.
OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT 10
INLAND IN THE COMMUNITY At Inland Power, community and service is at the heart of everything we do. We are committed to serving the communities where our members work and live and strongly believe our service goes beyond providing reliable and affordable power. For us, community is one of our core values and a fundamental part of our mission and service delivery. For most of our history, we have been giving back by supporting livestock shows, schools, higher education and other community events. In 2018, your cooperative donated approximately $70,000 back to the communities we serve. • Inland donated $20,000 to Spokane Neighborhood
tree of sharing during the holidays. Employees
Action Partners (SNAP) to help Inland members in
donate from their personal finances to help these
SNAP’s energy assistance program.
children in need.
• Operation Round Up continues to thrive and has
• Inland awarded 15 - $1,000 scholarships to Inland
raised more than $87,000 in five years. Over the
Power’s members’ children and dependents to
course of this program, 15 organizations have
attend higher education.
received donations. • Inland provided $7,800 to 4-H and FFA members • Inland employees sponsored approximately 80 students from Snowden Elementary through weekend food needs, school supplies and a
11 OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT
who showed and sold livestock at fairs and shows around eastern Washington.
CONGRATULATIONS TO INLAND’S 2018 SCHOLARSHIP WINNERS
MARIA ALVAREZ
LAKESIDE HIGH SCHOOL
JACKSON CLARK
FREEMAN HIGH SCHOOL
FIELDING DEMARS
CENTRAL VALLEY HIGH SCHOOL
RACHEL FRICKE
UNIVERSITY OF WASHINGTON
EMILY GRAHAM
MT. SPOKANE HIGH SCHOOL
ALI JONES
MT. SPOKANE HIGH SCHOOL
CATHERINE KARTCHNER
CENTRAL VALLEY HIGH SCHOOL
BENJAMIN KIEHN
CENTRAL VALLEY HIGH SCHOOL
GRACE LILJE
DAVENPORT HIGH SCHOOL
JOHN MIRES V
MEAD HIGH SCHOOL
MARLEY PRATT
FREEMAN HIGH SCHOOL
NICHOLAS ROLLINS
DEER PARK HIGH SCHOOL
TYSON SCHENK
LIBERTY HIGH SCHOOL
TYLER SHEA
NORTHWEST CHRISTIAN HIGH SCHOOL
LANESSA SIMON
EASTERN WASHINGTON UNIVERSITY
OUR FUTURE IS BRIGHT | 2018 ANNUAL REPORT 12
10110 W HALLETT RD. SPOKANE, WA 99224
DISTRICT 1 DANNY LEE, SECRETARY
NINE MILE FALLS, WASHINGTON
DISTRICT 2 DICK ZIEHNERT, TREASURER
ELK, WASHINGTON
DISTRICT 3 GARRY ROSMAN, VICE PRESIDENT
DAVENPORT, WASHINGTON
DISTRICT 4 DAVID SHILL
SPOKANE, WASHINGTON
DISTRICT 5 GALE RETTKOWSKI
WILBUR, WASHINGTON
DISTRICT 6 JIM KROLL
COLFAX, WASHINGTON
DISTRICT 7 BRIAN SLAYBAUGH, PRESIDENT
POMEROY, WASHINGTON
AT-LARGE POSITION A KRISTINA BAHR
SPOKANE VALLEY, WASHINGTON
AT-LARGE POSITION B RANDY SUESS CHENEY, WASHINGTON
LEF T TO RIGHT RANDY SUESS, JIM KROLL, KRISTINA BAHR, DAVID SHILL, DANNY LEE, GALE RETTKOWSKI, BRIAN SLAYBAUGH, GARRY ROSMAN, DICK ZIEHNERT
BOARD OF TRUSTEES