Char-Koosta News

The Official Publication of the Flathead Nation online

Message from Energy Keepers - SX?NQ?E?ELS L SUW?E?M /KSUK?I?MUMA? ?AK??A?MUKWA?ITS, Inc.

Dear CSKT Membership

Energy Keepers is now well into the third year of operations of your hydroelectric facility. At this time, the EKI Board of Directors think it is appropriate to address the status of the EKI operations. This message has some good news, but also contains a reflection on some unavoidable energy market changes.

Shortly after successfully acquiring the SKQ Project, the Tribes implemented their operating plan, developed over the past 30 years that utilized state of the art, industry recognized, forecast methods.  The initial business plan was approved by the Tribal Council, acting as the EKI Shareholder Representative.

In recent years energy prices suffered a drastic two year decline, placing acquisition in the midst of the greatest price decline in modern history.  The most talked about impact was the price of oil, however, all energy prices lost over half of their value by 2016. This decline included natural gas, which directly effects electricity prices more than any other energy commodity. This extreme price decline, effected EKI almost immediately. Because we planned for some market instability in the initial operating plan, the corporation was able to call on reserves to meet its first and second year’s financial obligations.

However, as we enter FY 2018, energy prices have been slow to rebound and are also being impacted by an oversupply of low cost energy resources. Over the past year, the EKI Board met continuously with Tribal Council and the tribal Finance Director to address this issue. As you would expect, tribal leadership insisted on justification for all of EKI’s operating expenses and encouraged increased efforts to enhance revenue.

With leadership and direction from the Tribal Council the EKI Board included the following directives in FY 2018 Annual Operating Plan:

• Directive #1 – Manage EKI controllable costs within $10MM each year for FY18- FY22
• Reduce dependence on contracted services in all areas
• Increase control over plant operations and maintenance budget
• Reorganize the EKI management team to ensure that the corporation is cost effective, efficient, and organized consistent with industry standards

Directive #2 – Implement a cost controlled strategic rehabilitation and betterment program for the SKQ Project over the next five years, FY18-FY22

• Directive #3 – Implement a power management services growth plan, with a goal of generating an additional $14MM in revenues for the FY 18-22 period

These measures, combined with restructuring of existing debt and additional capital provided by the Shareholder, provide adequate relief necessary to stabilize EKI’s financial position and operations over the upcoming five year period. The Tribal Council worked tirelessly with EKI leadership to assure that the SKQ Project is viable through this challenging time, and into the future.

The long term outlook for the Project is a positive one for the Tribes.  If you have any questions, please visit EKI’s website or contact me personally at tjfarrell62@gmail.com.

Sincerely,
Tom Farrell
Chairman of EKI Board of Directors

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