2019 Annual Report

From the CEO & General Manager

In a normal year, I’d write the introductory CEO & General Manager’s letter to the SMUD annual report. For 2019, I would have highlighted the organization’s strong financial position, the approval of our ambitious Integrated Resource Plan, our progress under the Sustainable Communities Initiative,  and our efforts to bring the California Mobility Center to Sacramento, among other developments.

Unfortunately, 2020 is the antithesis of normal. The COVID-19 crisis has changed life as we know it, not just for SMUD but for the customers and communities we serve. The audited 2019 financial statements are available for viewing at smud.org, but I decided that the opening part of the report, which has historically featured an overview of SMUD’s accomplishments illustrated by compelling photographs and graphics, would be inappropriate at this time.

In the first three months of the coronavirus, we’ve seen staggering economic and employment disruption in our community and across the nation.  SMUD has not escaped the impact and has experienced reduced revenues from customer sales which has focused the organization to cut costs without compromising the commitments we’ve made to our customers. The pandemic is unprecedented and there is a great deal of uncertainty around its longer term implications for the economy and how we all live, work and play.  As a result, we are closely monitoring the situation and running numerous potential scenarios and possible outcomes.

Our goal is to be nimble and flexible to adjust quickly to changed circumstances.  We took immediate steps including the implementation of a hiring freeze, the reduction of budgets to some of our programs, the deferral of some projects, and the imposition of spending limits for 2021 and 2022 to ensure financial sustainability.

None of this was imaginable as we entered 2020.  Since then we have closed our campuses to the public and quickly transitioned around sixty percent of our employees to working from home to ensure their health and safety.  Almost overnight, we implemented new safety and work protocols for critical employees who continued to work at our facilities and out in the field.  Regardless of where they were working, our employees remained productive and committed to meeting the promise we made to our community to provide reliable, affordable and environmentally responsible electricity to our residents and businesses.

At the same time, we are doing more than ever to support the members of our community who have been negatively impacted by the pandemic. We suspended electric service disconnections through the end of 2020, offered flexible payment plans, made it easier for customers to sign up for our low-income rate assistance program, and kept our financial commitments to our nonprofit and other partners in our community.

As an organization, we understand that during this difficult and uncertain time that keeping our promises to our community and customers is more important than ever. We understand that it is important that we continue to live by our values and as a community-owned, not-for-profit electric utility, we remain committed to work tirelessly to improve the quality of life of our customers and communities.

Months before COVID-19 arrived in the United States, I informed the SMUD Board that I would be retiring in August 2020. I have since agreed to stay on through the fall to help the organization successfully transition to a new CEO and general manager.

We have an outstanding electric company that is focused on the needs of the customer, the community, the environment, and the company’s role in our region. I’m confident that SMUD will emerge from this unprecedented time stronger than ever.

Stay safe and be well,

Arlen Orchard
CEO & General Manager 
 

Download financial statements        View facts and figures        View 5-year summary