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After the Storm

These poles were recently delivered to the cooperative’s headquarters facility to be used in making the permanent repairs to over 100 miles of line damaged by the December 2015 ice storm. The project is on schedule to be completed sometime in 2019.  

Lightning and tornadoes. Wild fires and ice storms. Most electric cooperative members have experienced these devastating events at some point in time. After the power has been restored to the last meter, many would assume that everything goes back to normal for your electric cooperative. Unfortunately, even after emergency repairs are made and the lights are back on, we’re just beginning to put the pieces back together. These acts of nature deplete resources and financially strain the co-op for years long after the storm moves on. The December 2015 ice storm is a recent example.

The disastrous event lasted almost two full weeks before we could restore power to all members. During that short time, the cooperative spent roughly $1 million housing and feeding extra contracted crews and purchasing large orders of materials to replace the broken poles and conductors destroyed by the storm. These hefty, unbudgeted expenses had to be cash flowed by the cooperative. It’s extremely difficult to plan for a major event, and it’s impossible to forecast the amount of damage that you may incur.

Won’t FEMA pay you back? Maybe. A partial reimbursement will only happen after several hurdles are cleared. First, the President of the United States must sign an emergency or disaster declaration at the written request of Oklahoma’s governor. This can take as long as three weeks after the event occurs. Once the declaration has been signed, FEMA will work with the co-op to begin the filing process. They will evaluate and audit the stacks of paperwork and receipts that must have been documented during the initial storm devastation. This requires a lot of time and preparation from the cooperative to make sure that everything was submitted to FEMA’s rigid standards.

Once FEMA has agreed all the paper work is properly completed and every expenditure is accounted for, they will authorize a reimbursement of only up to 75 percent of your event costs. The entire process with FEMA and can take up to 18 months to finalize. Finally, if the funds are available, the state of Oklahoma may reimburse 12.5 percent of the project. Because of the volatility of the State budget, this reimbursement is never counted on. That leaves 12.5-25 percent of the tab to be picked up by the membership.   

During the event, the cooperative must operate to the best of its ability with the mindset that an emergency or disaster declaration won’t be signed, or that it could take years to receive a reimbursement. If conductor or lines are damaged to the point that replacement is required, then a whole new process starts. This is called ‘mitigation’ work. During the December 2015 storm, over 100 miles of line was approved by FEMA for replacement through mitigation. The estimated cost for that project alone is over $3.5 million. Again, FEMA will reimburse the cooperative 75 percent of that money only after the project is completed, inspected and audited. Until the replacement project is completed, the cooperative must operate on cash and money borrowed through emergency lines of credit from our lenders before getting reimbursed any money from FEMA. In April of 2017, Northfork Electric received its first FEMA funds from the December 2015 ice storm, a small advance on expenses submitted to date.

Northfork Electric has just recently started the first phase of the December 2015 ice storm replacement project. Crews will be working in the Elk City area during most of 2017. The Grimes and Dempsey communities will see repairs late 2017 and early 2018, and the Erick and Sayre area phases of the project will begin in 2018. Due to the contract bidding and inventory processes, there are several mandates to follow given by the Federal Government. Each major event and declaration is handled separately and cannot be combined. This is why multiple events or back-to-back ice storms are so crippling to the financial health of an electric cooperative. Hopefully we will not experience another major event before receiving the FEMA reimbursement from this present project. Along with repairs and cleanup, these ongoing processes and challenges are what’s left after the storm.

By: Richard Bowdre, Dir. of Operations/Engineering

 

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