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MINUTES SOUTHSIDE ELECTRIC COOPERATIVE

MEETING OF THE BOARD OF DIRECTORS JANUARY 16, 2020 @ 1:30 P.M. HEADQUARTERS BOARD ROOM

PRESENT: Frank W. Bacon (Chair) Earl C. Currin, Jr. (Vice Chair) Charles J. Friedl (Treasurer) Brenda H. Johnson Kristie Martin-Wallace Clive C. Pettis, Sr. Sarah W. Sanders William T. White Frank F. Rennie (General Counsel) Christine Marston (Minute Taker)

STAFF: Bradley V. Furr, VP of Operations George A. Felts, VP of Engineering Jason Loehr, VP of Finance & Corporate Services Jean H. Morris, VP of Human Resources Ronald O. White, VP of Member & Public Relations

GUEST: Joshua Habel, System Professional Engineer Ian Hix, Director of Safety Tim Kreis, Director of Community Relations Jacob McCann, Director of HR

Dr. Frank Bacon presided, and Ron White gave the invocation.

PREVIOUS MINUTES On motion made and seconded:

The Minutes of the December 19, 2019 Board Meeting are approved. MOTION CARRIED

ODEC REPORT The ODEC report was given by Earl Currin.

PRESIDENT/CEO’S REPORT 1. The IRS 990 Questionnaire was distributed and reviewed, along with Board

Policy 206 – Conflict of Interest, which are required annually. Each director isrequired to sign the acknowledgement form associated with Policy 206.ACTION: Questionnaires and acknowledgement form are to be turned in by theMarch 2020 Board meeting.

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2. The Board was provided information regarding cybersecurity events during themonth of December 2019.

3. The Institute of Electrical & Electronics Engineers (IEEE) outage data and safetyreport for December 2019 were reviewed in detail:IEEE Outage Data

a. System SAIDI, SAIFI and CAIDI were all slightly below historical valuesfor the month

b. There was one SEC supply outage during the month at Moran substationon December 24th. A lightning arrestor failed on the power transformercausing the interruption.

c. There were no Major Event days in December.d. Weather had a minimal impact on the system and outage activity was

limited throughout the month.Safety Report

a. There were no lost-time injuries in December.b. As of December 31st, employees have worked 610 days without a lost

time injury.4. Operations Update:

a. New service activity was down 12% for the month.b. Outage activity (minutes) with major event days removed were in line with

historical data: Central – 51 Eastern – 27 Northern – 20 Western – 47

c. December outage causes were affected primarily by isolatedthunderstorms producing damaging winds and lightning: Trees 24% or 34 outages; YTD 1,759 outages Decay/Age 21% or 30 outages; YTD 151 outages Animals 21% or 30 outages; YTD 279 outages Fault/Failure 14% or 20 outages; YTD 367 outages Maintenance/Planned 8% or 12 outages; YTD 136 outages Unknown 10% or 20 outages; YTD 296 outages Public 5% or 8 outages; YTD 208 outages Other 0.5% or 1 outages; YTD 8 outages Power Supply 0.5% or 1 outages; YTD 10 outages Weather 0% or 0 outages; YTD 633 outages

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d. Tree related outages from 2014 through December year-to-date withMajor Event Days: 2014 = 870 outages 2015 = 1,066 outages 2016 = 1,025 outages 2017 = 1,029 outages 2018 = 2,314 outages 2019 = 1,759 outages

e. Outages by District: Central 18% (51 outages affecting 3,028 members) Eastern 3% (27 outages affecting 331 members) Northern 7% (20 outages affecting 638 members) Western 9% (47 outages affecting 1,528 members)

f. 2019 Storm Data: Winter Storm Gia: 453 outages, 17,868 members affected and

24,516 member outages Winter Storm Petra: 139 outages, 9,433 members affected and

13,295 member outages February Windstorm: 59 outages, 3,462 members affected and

3,539 member outages March Windstorm: 50 outages, 4,555 members affected and

5,115 member outages May Thunderstorm: 77 outages, 3,968 members affected and

4,819 member outages October Thunderstorm: 134 outages, 5,896 members affected

and 9,434 member outagesg. December SAIDI switching savings:

Realized 7.1 minutes (77%) Saved by automation (SCADA) switching 1.7 minutes (19%) Saved by manual switching 0.4 minutes (4%)

h. SAIDI per District: Central 3.49 minutes in December; YTD 86.9 minutes Eastern 1.23 minutes in December; YTD 52.4 minutes Northern 0.26 minutes in December; YTD 24.3 minutes Western 1.75 minutes in December; YTD 100.2 minutes

i. SAIFI per District: Central 0.056 events in December; YTD 0.77 events Eastern 0.009 events in December; YTD 0.43 events Northern 0.007 events in December; YTD 0.34 events Western 0.017 events in December; YTD 0.75 events

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j. CAIDI per District: Central 63 minutes in December Eastern 141 minutes in December Northern 83 minutes in December Western 106 minutes in December

k. Year-to-Date CAIDI:Month Working Hours Non-Working Hours

January 76 87 February 61 169 March 93 152 April 103 101 May 106 163 June 84 116 July 76 145 August 61 122 September 88 134 October 89 90 November 70 109 December 81 80

l. Fleet service orders completed YTD:Month Service Orders (SO) Average Cost/SO

January 81 $543 February 77 $527 March 83 $423 April 74 $492 May 79 $280 June 60 $723 July 64 $604 August 106 $329 September 62 $263 October 82 $411 November 96 $232 December 63 $305

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m. Penske information:Month Parts Cost Downtime (Days)

January $43,986 2.32 February $33,036 2.12 March $26,477 4.02 April $28,608 2.82 May $19,357 3.02 June $18,123 4.29 July $29,995 2.81 August $31,957 3.21 September $13,882 3.20 October $33,070 2.72 November $17,242 3.01 December $19,221 4.91

5. ACSI Member Satisfaction Survey and Call Coaching Scorecard initiative:a. SEC participates in regular satisfaction surveys conducted via telephone

and email. Surveys are conducted by TSE Servicesb. The Cooperative transitioned from a quarterly to a bi-annual reporting

schedule, a cost reduction of $20,000 to be used for a more real timeevaluation as the Call Coaching Initiative and Post Call Survey system

c. SEC’s 2019 third quarter score remains at 81.d. Call Coaching Scorecard:

Provides feedback to Member Service Representatives’ (MSR)call handling, member service skills, system navigation andaccount knowledge

Recognize opportunities to promote core options; prepay, budget,auto-draft and paperless

Data collection, building member loyalty and recognizing membertrends; payment, usage and communication

The scorecard is made up of five sections; greet & identify,courtesy, handle & control, solve problems & confirm, and speechquality & close

Provides information on MSR strengths and weaknessese. Areas of concerned brought out by the survey will be further investigated

and addressed.ACTION: Board inquired about the number of walk-in members that visit the Cooperative. Ron White will provide at the next Board Meeting.

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6. Mr. Edwards updated the Board on the number SEC employees retiring over thenext five to ten years.

7. The Board discussed Delegate Lee Ware’s proposed legislation, House Bill 203– Virginia Energy Reform Act, which would affect all cooperatives and theirmembership throughout the state of Virginia.

8. The Cooperative’s LEAD Program was offered to employees to developleadership skills. There are 24 participants in the program, and management staffwill take turns leading the program. There will also be guest speakers as part ofthe program. There is a total of seven sessions throughout the year.

9. Jeff Edwards, Brad Furr and Jacob McCann held meetings with operationspersonnel about morale issues. Three of the four districts said there were noissues. Some good information was received during these meetings and anysuggestions will be followed up on at future meetings. These meetings will beheld bi-annually going forward.

NEW BUSINESS

1. In preparation for the National Rural Electric Cooperative Association (NRECA)Annual meeting a selection of a voting delegate and alternate are needed forthe Cooperative Finance Corporation (CFC):

Voting Delegate: Paul S. Bennett Alternate: William T. White

On motion made and seconded:

The CFC voting delegate and alternate are approved as reappointed. MOTION CARRIED

2. The Tarheel Electric Membership Association (TEMA) selection of a votingdelegate and alternate are needed:

Voting Delegate: Earl C. Currin, Jr. Alternate: Jeffrey S. Edwards

On motion made and seconded:

The TEMA voting delegate and alternate are approved as reappointed. MOTION CARRIED

3. Safety Improvement Plan:a. Component of NRECA RESAP (Rural Electric Safety Achievement

Program) requirement with inspections every three years.b. Internal evaluation:

Identifies key areas for improvement How to improve the areas identified Improve employee awareness

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c. Initiatives: 2019 Action Items:

‐ Safety Committee to analyze a variety of near miss scenariosand estimate near miss report goals (June 12, 2019)

‐ Near miss scenario survey completed by Safety Committee in February 2019

‐ Determined present near miss definition acceptable ‐ Developed Safety Improvement boxes and placed them in all

districts and Headquarters in March 2019 ‐ Standard Operating Procedure (SOP) was implemented in April

2019 ‐ Developed an incident investigation SOP and was implemented

in May 2019 ‐ Developed a safety culture survey in October 2019, chose

NRECA’s Employee Safety Culture Perception Survey ‐ Established an employee testing procedure to provide data to

improve safety presentations and training using Kahoot, a web-based testing app in November 2019

2020 Action Items:‐ Continue near miss training based on developed 2020 goals

and measure training retention by December 2020 ‐ Safety Committee to develop multi-tier incentive program based

on impact of safety suggestions with a deployment target date of 2021

‐ Continue to develop and implement improved dissemination of incident investigation results to employees

‐ Deploy safety culture survey and draft plans to implement corrective action for climate improvement by 2021

‐ Utilize budgeted training retention tool, Kahoot, at a minimum of two times per quarter

‐ Develop presentation materials and delivery options to improve member & public safety

3. Emergency Response Plan (ERP) annual review/exercise was reviewed:a. Created in response to Rural Utilities Service (RUS) requirements

following September 11, 2001b. The ERP was created December 9, 2005 and must be reviewed and/or

exercised annuallyc. Staff collaborated on review and update of the ERP through SharePoint.d. The ERP was reviewed and updated:

Reflecting new and/or changed reporting roles

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Update several standalone documents that support the ERP Development of a new Business Continuity Plan to support the

ERP All documents are stored on the employee intranet site for

improved accessibilitye. Plan was exercised on January 13th due to a Winter Storm Gia:

17,868 members without power 453 outage events 11 broken poles Total estimated cost of restoration was $500,000

f. Key items noted from the exercise: Limited prestaging available due to coverage of ice/snow along

the East Coast Crew Scout package was updated, and additional training was

held in September 2019 Development of a “paperless” field documentation process

nearing completion with testing ongoing4. Transmission Pole Replacement Bid Results:

a. PowerTech Engineering prepared the design package and circulated thebid.

b. The pre-bid meeting was held on October 25, 2019.c. The bids were opened on November 15, 2019.d. Nine contractors were sent bid documents with only three who provided

bids.e. Volt Power out of Atlanta, Georgia provided the winning bid at $274,725

5. FASTC Project Update:a. Foreign Affairs Security Training Center (FASTC) is a U.S. State

Department training center located at Fort Pickett in Central District’sservice territory.

b. FASTC provides security training to personnel from the StateDepartment, the foreign affairs community, and law enforcementagencies.

c. The facility is comprised of in-door and outdoor shooting ranges,explosive ranges, drive tracks, classroom buildings, and support facilities.

d. SEC began the preliminary design of its electrical build in 2014 with twophases from 2016 – 2017 and 2017 – 2019. The project was completedin 2019.

e. Contract/phase one was constructed using two SEC contractors andCentral District crews built and energized four new services. The finalcost of the contract was $1.1 million.

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