2019 Annual Report

INL A ND ’S RIP P L E EFFECT 2019 ANNUAL REP ORT

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C E O A ND P RE S ID E N T ’S ME S S A G E

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INL A ND ’S MI S S I O N A ND VISION

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INL A ND

BY T HE N U MB E R S

201 9 F IN A N C I A L S TAT E ME N T S

INL A ND A C C O MP L I S H ME N T S

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INL A ND IN T HE C O M M U NI T Y

CEO & PRESIDENT’S MESSAGE

We’ve all experienced the ripple effect. You throw a pebble into a pond and then watch as that single small action creates wider and wider waves throughout the once still pond. That one small pebble becomes the source of a much broader outcome.

Likewise, Inland Power and Light is

purpose than ourselves–our ripple effect

successes highlighted in this annual

making ripples in the energy industry and

of service to our communities won’t

report. We continue to believe that our

throughout our service territory.

allow us to ever become complacent. The

products, services and value that Inland

growth of our community has brought

Power brings to our members remains

a great deal of potential to serve larger

as the fundamental element of our

loads and to be on the front lines of

continued success.

The year 2019 started with a strong

foundation of past successes, and we built on those accomplishments by

continuing to maintain a strong electric distribution system. We are sure many

great place to live and work.

Our pursuit of a bigger purpose fuels our continuous efforts to maintain a modern

of you remember the windstorm of 2015

The overall financial health of your

and reliable electric grid throughout

that took a devastating toll on our system

cooperative is excellent. After setting

our service territory. Simply stated,

and region. Despite the severe burden

aside the BPA Prepayment transaction,

Inland Power and Light exists to make a

brought on by the storm, the ripple

total assets were $191 million dollars,

difference in the communities and in the

effect of that storm resulted in your

long-term debt was $63 million

lives of those we serve. Our mission is our

cooperative strengthening our system

and net margins were $6.5 million.

members, and as we look ahead to our

and ensuring that our service would

Your cooperative was also able to

future, we can think of no more important

remain reliable, even when Mother Nature

return $2.5 million in capital credits

purpose than continuing to serve you and

reminds us of what she is capable of. Our

to the membership in 2019. This is

our communities.

system improvements have stood the

money refunded directly back to our

test and passed with flying colors. Your

communities and our valued members.

operations team has done exceptional

On behalf of your Inland Power board of trustees and all employees of Inland

Within the pages that follow, you will see

Power & Light, we thank you for your

evidence of our dedication in serving

support, your business, your continued

and continually creating value for our

trust and for the honor of serving

members. The ripple effect of 2019 is still

your energy needs now and well

We also continued improving and

in motion and we look forward to creating

into the future.

strengthening community services that

even bigger waves as we continue to

have long been a proud part of our

move forward in the years to come. We

traditional cooperative commitment to

thank our employees for their dedication,

our communities and members. Here at

effort and willingness to embrace change

Inland Power, we operate for a bigger

and for the accomplishment of all the

work to ensure that Inland Power’s service continues to be safe and reliable.

1 INLAND’S RIPPLE EFFECT | 2019 ANNUAL REPORT

continuing to make eastern Washington a

CEO INLAND POWER & LIGHT

PRESIDENT BOARD OF TRUSTEES

INLAND’S RIPPLE EFFECT | 2019 ANNUAL REPORT

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MIS SION O U R MI S S I O N IS OUR ME MB E R S

VI SI ON

Be a premier member-owned energy cooperative committed to safe, reliable service at competitive rates with great member engagement and experiences.

What is a mission? It is a belief in something

productive. Our vision at Inland Power is

bigger. It is a commitment that is just as

to “be a premier member-owned energy

strong, if not stronger than when it was first

cooperative committed to safe, reliable

written. It is a ripple effect that impacts

service at competitive rates with great

and drives everything a person, company or

member engagement and experiences.”

organization does.

We believe that by living our mission and

At Inland Power and Light, you are what

remaining focused on our vision, our ripple

drive us and the reason we do what we do.

effect will continue to make an impact in

Each process is created, and each decision

every community and with every member

is made with you in mind. Our goal each day

we serve. These words are more than just

is to provide you with the very best service.

ideas. They are the foundation on which

Our mission is simple. It doesn’t need to

your cooperative is built and the ideals we

be long and verbose because it all comes

strive to uphold for you every day.

down to one factor—you. Our mission is our members—­and we are committed each day to fulfilling that mission.

Similarly, we need vision in life to see where we want to go. We must dream big and work toward fulfilling those goals. As time moves forward, your Inland team adapts and works to become more efficient and

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INLAND’S RIPPLE EFFECT | 2019 ANNUAL REPORT 4

PER 5.81 MEMBERS MILE OF LINE 7,455 MILES OF LINE

16,671

102

MEMBERS ENROLLED IN FLEXPAY

101,778

B Y T HE N U MB E R S

MEMBERS ENROLLED IN SMARTHUB

NUMBER OF POWER POLES

2,173

MEMBERS WHO ENROLLED IN SMARTHUB IN 2019

55,643

32,315 43,285

ANNUAL NUMBER OF MEMBER SERVICE CALLS

NUMBER OF TRANSFORMERS

MEMBERS ENROLLED IN AUTOPAY

NUMBER OF METERS

4,352

1,070

AVERAGE WEEKLY PHONE CALLS

TOTAL NUMBER OF EMPLOYEES

90

FULL TIME

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PART TIME

10,834

1,576

NUMBER OF MEMBERS PARTICIPATING IN SOCIAL MEDIA

954

NUMBER OF NEW SERVICE REQUESTS IN 2019

CREDIT CARD

6,482

ELECTRONIC CHECKING/SAVINGS

2,701

MEMBERS ENROLLED IN THE INLAND POWER COMMUNITY FOUNDATION

148,000

POTENTIAL REACH 5 INLAND’S RIPPLE EFFECT | 2019 ANNUAL REPORT

INLAND’S RIPPLE EFFECT | 2019 ANNUAL REPORT 6

AVER AGE RESIDENTIAL R ATES FOR 2019 PER kWh Inland Power’s 2019 rate per kWh is 8.37 cents.

As a cooperative, you maintain an ownership interest and stake in everything we do, and that includes our financial strength.

Net Utility Plant

Non-Utility Plant

Investments in Assoc. Orgs.

Cash and Cash Equivalents

1,684,000

200,000

Accounts & Notes Receivable

11,897,000

10,587,000

Materials & Supplies

4,935,000

3,480,000

BPA Prepayment

114,095,000

124,244,000

Other Prepayment

1,121,000

859,000

Other Assets

6,949,000 61,612,000

of your cooperative. Your cooperative

BPA Prepay Long Term Debt

110,405,000

120,858,000

Other Liabilities Deferred Gain & Credits

42,873

3,276,000

$ 304,793,000

$ 305,985,000

STATEMENTS OF REVENUES AND MARGINS

Operating Revenue

2019 $ 79,615,000

2018 $ 74,719,000

13.04¢

9.54¢ 8.37¢

EXPENSES

Cost of Power

42,290,000

39,789,000

Operations & Maintenance

10,898,000

9,038,000

Consumer Accounts & Marketing

2,558,000

2,435,000

Administrative & General

6,069,000

6,769,000

Depreciation

7,359,000

7,100,000

Taxes

4,602,000

4,458,000

Interest

2,603,000

2,447,000

Total Cost of Electric Service $ 76,379,000 $ 72,036,000

OPERATING MARGINS

3,236,000

2,683,000

NET BENEFITS OF BPA PREPAY

1,648,000

1,763,000

NON-OPERATING MARGINS

43,589

41,086

39,872

40,352

39,502

8,131,000

3,970,000

strong financials, while making

Net Margins

ADMIN & OPERATIONS 26%

7,611,000

membership in 2019.

Out of 891 cooperatives in the country Inland Power ranks 14th for lowest rates.

105,159,000

be seen in our ability to maintain

$2.5 million in capital credits to the

INLAND POWER HAS SOME OF THE LOWEST RATES IN THE NATION

EQUITIES, MARGINS AND LIABILITIES

63,103,000

RESIDENTIAL 74%

2014

3,725,000 $ 305,985,000

Long Term Debt

cooperative was also able to return

TAXES, INTEREST & DEPREC. 19%

4,234,000 $ 304,793,000

net margins were $6.5 million. Your

POWER COSTS 55%

6,153,000

essential to the effective operation

long-term debt was $63 million and

2019

2,000

6,380,000

10,286,000

total assets were $191 million dollars,

Y T D E XP ENSES

$ 156,735,000

1,000

109,418,000

cost-effective electricity. In 2019,

NUMBER OF ME T ERS

$ 160,446,000

Accounts Payable

deliver you with safe, reliable and

COMMERCIAL 19%

2018

Equities & Margins

significant system improvements to

IRRIGATION 7%

2019

AS SE TS

is strong and that ripple effect can

Y T D REVENUE

Preserving financial strength is

AVERAGE CUSTOMER USAGE BASED ON 1,500 KWH’S/MONTH E IA DATA, NOVEMBER 2019

BALANCE SHEETS

1,612,000 $ 6,496,000

1,809,000 $ 6,255,000

EQUI T Y W/O BPA P REPAY 58%

2018

57% 56%

2017 2014

2019

2016

55% 54%

2015

INLAND AVG.

WASHINGTON AVG.

NATIONAL AVG.

53%

INLAND’S RIPPLE EFFECT | 2018 ANNUAL REPORT 8

A C C O MP L I S H ME N T S Technology is an amazing thing. As we look throughout the history of innovation, the ripple effect created by technology and the advancements we have made in the last

A L O O K A HE A D

century and a half have flowed into every part of our lives.

Today, all it takes is the flip of a switch and the

• Inland Power formed a substation

lights come on. The click of a remote turns

maintenance and metering team. This team

on the TV. The use of electricity is extremely

focuses on the maintenance of Inland’s

easy, and it seems like second nature, which

55 substations. The team completed

is exactly what we strive for at Inland Power.

$580,000 in substation upgrades in

Without electricity there would be no smart

2019 alone.

phones, tablets or computers. We work hard

of FEMA project from Newman Lake

the river of technology that navigates our lives

to Greenbluff.

Inland crew and contractors completed nearly $11 million in capital system improvements.

service territory. This shift designates one

and prioritize maintenance needs for that

UNKNOWN / OT HER: 6.83% WIND: 14.49%

loads when fully operational.

• Relocation for Spokane County’s Aero

It takes very little effort to cause a

our operations team has submitted a

ripple and one small change can have an

transmission interconnection request

enormous impact. We see this daily here

with Avista for up to 80 MW of new

at Inland and look forward to the lasting

load.

effect the investments we make today will

• Convert Inland’s GL-line in the Mt

have in strengthening our future. Below is

Spokane area from overhead to

a summary of some of the key projects we

underground line.

have planned in 2020.

• Overhead to underground conversion

• Continued efforts to prioritize

for Krell Hill to enhance reliability for

maintenance projects to reduce

the region’s emergency management

outages. It is our goal to provide

radio towers.

consistent and dependable member

• Single Phase overhead to underground

service along with great reliability.

conversions for Timberlane Road,

• Complete revamp of our warehousing operations for greater efficiency and cost savings.

Road for tie between West Plains 2nd

our Hayford, Four Lakes and Mica

feeder and Airway Heights substations.

• Replacement of aging underground cable throughout Inland Power’s

upgrade at Hayford substation for

• Completed $844,000 line relocation to

added loads in the West Plains and

accommodate road expansion for Bigelow

back feed for Amazon.

Gulch Road from Argonne to Forker Road.

• Replacement of another 800 poles. first year of our second round of an

upgrade at the Four Lakes and Mica

replacement throughout Inland

system.

This year marks the completion of the

+ Substation power transformer

• $1.4 million in underground cable

Bay.

• Planned upgrade of transformers for

+ Substation power transformer

projects on SR902 for WSDOT.

Temple Road, Bearz Lane and Sutton • Overhead reconductor on Lundstrom

substations.

Road roundabout and three roundabout

11-year pole test and treat program.

substations.

Power’s system.

• Design and begin construction of a

• Inland Power replaced $3.68 million in pole

new Craig Road Substation. Currently

replacements (approximately 800 poles)

lineman to own a specific territory and set of members. They restore outages

T REE: 10.34%

is estimated to be one of Inland’s largest

• Successfully implemented an Area Service Representative model throughout Inland’s

SNOW / ICE: 13.06%

fulfillment center. This commercial building

Inland is proud to have made in 2019.

2019 ACCOMPLISHMENTS

POWER SUP P L IER: 3.12%

extension to serve the new Amazon

reliable service and we are excited to continue summary below of the accomplishments

P L ANNED: 9.92%

• Completion of an underground line

cutouts and building several miles of overhead

into 2020 and beyond. We’ve provided a

MANMADE: 6.04%

loads in the West Plains.

enhancements, replacing poles, bells and

are committed to providing you with safe and

L IGH T NING: .49%

was completed to help bring on new large

These projects range from substation

and underground line. We at Inland Power

FIRE: .25%

• The new Hallett & White substation feeder

Our operations department was busy in 2019.

ANIMAL: 4.25% EQUIPMEN T: 31.21%

• Your crews completed the second half

to make sure you don’t have to think about in today’s world.

OU TAGES BY SOURCE*

throughout our service territory.

• Crews replaced 807 cutouts and 370

territory. Inland now has 15 area service representatives working for you.

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aluminum bells to help improve and maintain reliability.

*Each color represents an outage source. Each box represents 1%.

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IN T HE C O MM U N I T Y W E HEL P O UR C O MMUNI T IE S SHINE BRI GH T

We love taking care of our communities and our members. Aside from providing electricity as an essential service, we strive to give back and support our communities in life’s struggles, opportunities and adventures.

The Operation Round Up program was

Power has supported students pursuing

We are excited to see this program

founded upon the same principle that led

higher education, community events,

blossom as it grows in the future.

to the creation of electric cooperatives

schools, livestock exhibitors just to name a

over 75 years ago – people helping people.

few. In 2019, Inland donated approximately

students from Snowden Elementary

$70,000 back to the communities we

through weekend food needs, school

serve.

supplies and a tree of sharing during

We know that there is a great need throughout our service territory, and we wanted to be able to make a greater ripple effect, which is why the Inland Power Community Foundation was formed. The funds from Operation Round Up were incorporated into the new Inland Power Community Foundation to broaden our giving opportunities and increase the flow of giving into your community.

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• Inland employees sponsored over 80

the holidays. Employees donate from • More than $32,500 was donated to

their personal finances to help

the Spokane Neighborhood Action

these children.

Partners (SNAP) to help Inland members

• Inland awarded 19 - $1,000 scholarships

in SNAP’s energy assistance program.

to Inland Power’s members’ children

$10,000 of this contribution came from

and dependents to attend college or

our generous members who donated

trade school.

directly to the Project Share program.

• The Inland Power Community

• Your cooperative provided $8,000 to 4-H and FFA members who showed and

We help our communities shine bright,

Foundation sponsored eight

sold livestock at fairs and shows around

which is why for more than 30 years, Inland

organizations in 2019 totaling $10,575.

eastern Washington.

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10110 W HALLETT RD. SPOKANE, WA 99224

B O A RD O F T R U S T E E S DISTRICT 1 DANNY LEE SECRETARY

NINE MILE FALLS

DISTRICT 2 DICK ZIEHNERT TREASURER

ELK

DISTRICT 3 GARRY ROSMAN V. PRESIDENT

DAVENPORT

DISTRICT 4 DAVID SHILL

DISTRICT 6 JIM KROLL

SPOKANE

COLFAX

DISTRICT 5 GALE RETTKOWSKI

DISTRICT 7 BRIAN SLAYBAUGH PRESIDENT

WILBUR

POMEROY

AT-LARGE AT-LARGE POSITION A POSITION B KRISTINA BAHR RANDY SUESS

SPOKANE VALLEY

CHENEY