Connecting with our community Annual Report
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1 Connecting with our community 2016 Annual Report
2 Looking back at 2016, it s easy to recognize the tremendous changes we witnessed as a nation and as a commonwealth, even some changes here in our own community. While the news was ever-changing, one thing that didn t change was South Kentucky RECC s commitment to you our member and to our communities. Reliability goes beyond knowing your lights will come on when you flip the switch. For nearly 80 years, since local farmers and citizens first formed South Kentucky RECC, we have been here to power our communities. As our mission states, SKRECC is driven by people, not profit, and improving the quality of life for our members is a priority. As a member-owner of South Kentucky RECC, your co-op is locally owned and controlled for the benefit of all our members. Unlike investor-owned utilities, a cooperative s goal is not to make a profit, but to provide a reliable and affordable product. Your membership matters because you have a voice you can attend annual meetings, offer suggestions, and vote for a board of directors that is charged with directing the affairs of your co-op. This annual report focuses on how SKRECC connects with our communities in a variety of ways beyond providing safe, reliable, and affordable electric service to you, our member-owner. GROWING ECONOMIC DEVELOPMENT One way we are a true community partner is our commitment to support and grow the communities we serve, encouraging development to improve our members quality of life. That means being proactive and working with other entities to attract jobs and industry. South Kentucky RECC has been a leader among coops for its efforts. The co-op was the first in the state that began working with the Rural Economic Development Loan (REDL) and Grant (REDG) programs in 2005 to provide funding to rural projects. Under the REDL/G program, USDA provides zero interest loans to local utilities, like South Kentucky RECC, which they, in turn, loan to local businesses (ultimate recipients) for projects that will create and retain employment in rural areas. Since 2005, SKRECC has been involved in about 26 loan/ grant projects through USDA, creating approximately 1,250 jobs in our region. In addition, the owner-member electric cooperatives of East Kentucky Power Cooperative, our power supplier, recently developed PowerVision. This innovative program uses the latest drone technologies to provide an aerial showcase of available commercial and industrial tracts across areas served by Kentucky s Touchstone Energy Cooperatives. PROVIDING THE BEST SERVICE TO MEMBERS Providing the best possible service is a top priority at South Kentucky RECC and providing it safely is important to our employees and members alike. To paraphrase a quote, electricity is a useful servant but a terrible master. Each day our service to you begins with that idea and safety in mind. South Kentucky RECC s reliability rate for 2016 was percent. That means if all the outages from 2016 were spread evenly across the SKRECC membership,
3 Cover photo: South Kentucky RECC Service Technician Greg Hammond, shown with his daughters, Laila, 9, and Stella, 4, is just one of the many SKRECC employees that connect with our member-owners each day making sure safe, affordable, and reliable electricity gets to you. Photo: Tim Webb Left photo: South Kentucky RECC Rightof-Way Supervisor Paul Wilson presents a People Fund grant to Southwestern High School Future Business Leaders of America President Allie Patrick, FBLA Advisor Chris Muse, back row, right, and students from the school s FBLA chapter. SKRECC s People Fund program is another way the co-op is able to give back to the community. Photo: Joy Bullock Below photo: Each year, South Kentucky RECC participates in several community events held within its service territory, including many Christmas parades. This photo is from the 2016 Wayne County Christmas parade. Photo: Joy Bullock power was available percent of the time. This statistic includes the major winter storm the co-op endured at the end of January There are several things that South Kentucky RECC does to keep electricity flowing reliably. Among them, we constantly monitor voltage readings and blinks through our Advanced Metering Infrastructure (AMI) system. SKRECC is very proactive in sending servicemen to inspect any member s service that may be outside the normal limits of voltage or reasonable blinks on their service. Next, we do custom and scheduled tree trimming in rights-ofway to avoid as many tree-caused outages as possible. The co-op has a regular tree-trimming/maintenance cycle schedule, so that the entire system is gone over regularly. In addition, right-of-way crews give attention to trees in lines as reported by members. This adds up to approximately 2,000 requests per year. Finally, South Kentucky RECC provides the best possible service through its state-of-the-art 24-hour dispatch. The co-op has someone available so members can reach us at any time with their service problems or outages. SKRECC also has crews on call 24 hours per day to handle issues that arise. POWERFUL INNOVATIONS As technology gets more sophisticated, so does South Kentucky RECC, raising the standards for reliable electricity. Delivering the energy you need in your homes and businesses involves a complex process. State-of-the-art equipment helps make that process a little more clear. Members have access to their accounts through an online member portal at that allows members to view or pay their bills; review their account(s); set up to receive e-bills and e-delinquents; report minor issues; sign up for alerts; learn about and sign up for various co-op programs; and a number of other actions. South Kentucky RECC has an interactive power outage map on its website, which allows members to track outages across the service territory. The simple-to-use map shows the exact number
4 One of South Kentucky RECC s biggest community events is the yearly annual meeting. Employees register children at the 2016 annual meeting. This year s meeting will be held on June 8 at the new Somerset headquarters. Photo: Joy Bullock of members affected by outages on a county-by-county basis. The information on the power outage center updates every 15 minutes or less during outage situations to help provide members with the most recent information possible. Technology has also helped South Kentucky RECC serve you more efficiently. From online payments to checking your energy use, you are afforded the most up-to-the-minute information. In our fast-paced world, technology now even offers you a way to pay as you go with our Prepay option. Prepay is an option that helps members avoid paying deposits, late fees, and/or reconnect fees. It s an option that gives members control regarding when and how much they pay at any one time. Simply put, rather than paying for electricity after it is used, with the Prepay option, you pay for your electric before you use it or as you use it. The co-op also offers a smartphone app for iphone, ipod Touch, ipad, and Android, which gives members access to their accounts regardless of where they are, as long as they have cell phone service. Finally, Facebook and Twitter are other ways the members and South Kentucky RECC can make connection. Through both outlets, SKRECC is able to update members on outages, energy-efficiency programs and tips, and information about events at the co-op. WAYS WE CONNECT Of the seven core cooperative principles South Kentucky RECC endorses, one of the most important is Concern for Community. Cooperatives work for the sustainable development of communities, through policies approved by our members. You see your cooperative s name on the walls of local sports teams fields and gymnasiums, as a sponsor of community events, and with co-op employees volunteering their time for local charities. South Kentucky RECC gives back to its communities through our People Fund program, which allows members to round up their electric bill to the nearest dollar, then awards grants from that funding to community organizations, like schools, food banks, senior citizens centers, and many others, whose financial needs are not being met by other resources. South Kentucky RECC also encourages its employees to participate in community events, like American Cancer Society Relay for Life or March for Babies. In addition, South Kentucky RECC made a longterm commitment to community through construction of its new headquarters in Somerset. In 2016, the facility was completed, and the co-op made its move earlier this year. SKRECC has invested in its facilities in order to provide the best possible service well into the future. South Kentucky RECC is proud to call our communities home, and we know our commitment to Connect with Our Community is something you expect, just as much as the light that follows when you flip a switch in your home.
5 agenda ANNUAL MEETING OF MEMBERS SOUTH KENTUCKY RURAL ELECTRIC COOPERATIVE CORPORATION Where: South Kentucky RECC Headquarters, 200 Electric Avenue, Somerset, KY Parkers Mill Rd.; co-op on the right) When: Thursday, June 8, 2017 Registration Time: 4:00 p.m. Meeting Time: 7:00 p.m. Greg Redmon Chairman, District #2 Greg Beard, Secretary/Treasurer, District #5 Billy G. Hurd District #4 Brent Tackett District #7 Cathy Crew Epperson Vice Chairperson, District #1 Rick Halloran KAEC Representative, District #3 Boris Haynes East KY Power Representative District #6 Mark David Goss Attorney 2017 OFFICIAL BUSINESS MEETING AGENDA (Turn at Stoplight 22 on HWY. 27 onto The annual membership meeting of South Kentucky RECC organizes to take action on the following matters: 1. Call of Meeting to Order 2. Determine Quorum Present 3. Reading of the Notice of the Meeting and Proof of Mailing 4. Consideration and Approval of the Minutes of the 2016 Annual Meeting 5. Presentation and Consideration of Reports of Officers, Directors, and Committees 6. Report on the Election of Board Members District 1 and District 5 7. Unfinished Business 8. New Business as Proposed in Section 3.08 of the Bylaws 9. President and CEO s Report 10. Adjournment Allen Anderson President/CEO
6 2016 South Kentucky RECC MEMBERS BY COUNTY (as of December 31, 2016) ADAIR CASEY... 1,753 CLINTON...6,658 CUMBERLAND...21 LAUREL LINCOLN... 1,238 MCCREARY...6,165 PULASKI... 27,910 ROCKCASTLE...71 RUSSELL... 10,090 WAYNE...12,568 PICKETT, TN SCOTT, TN TOTAL... 67,318 AVERAGE KILOWATT-HOUR USAGE , ,055 MILES OF LINE , ,836 CONSUMERS PER MILE COMMERCIAL 32.11% SERVICE AREA REVENUE SOURCES OTHER 2.33% RESIDENTIAL 65.56% MAJOR COSTS WHOLESALE POWER OPERATIONS DEPRECIATION INTEREST TAXES OTHER EXPENSES 72.89% 16.20% 6.27% 4.48% 0.13% 0.03%
7 STATEMENT OF OPERATIONS For the Year Ending December 31, 2016 Operating Revenue...$126,578,792 COST OF ELECTRIC SERVICE Cost of Electricity Purchased from East Kentucky Power... $91,258,444 Cost of Operating the Distribution System... $20,288,571 Depreciation Expense... $7,848,985 Interest Expense on Loans... $5,603,459 Public Service Commission Assessment... $159,127 Other Expenses... $46,980 Total Cost Electric Service... $125,205,566 Gross Margins from Electric Service... $1,373,226 Non Operating Income... $7,230,643 Net Margins (Deficit)... $8,603,869 BALANCE SHEET As of December 31, 2016 ASSETS Total Poles, Wires, and Other Equipment... $255,522,601 Less Accumulated Depreciation... $67,148,201 Net Value of Poles, Wires and Other Equipment... $188,374,400 Investments in Associated Organizations... $70,204,197 Cash and Equivalents... $9,106,933 Accounts and Notes Receivable... $14,851,948 Material in Inventory... $1,458,457 Prepaid Expenses... $244,926 Other Assets... $5,171,945 Total Assets... $289,412,806 LIABILITIES AND MEMBERS EQUITY Consumer Deposits... $1,610,522 Members and Other Equities... $122,212,656 Long-Term Notes Payable... $135,147,015 Notes and Accounts Payable Owed to Vendors... $18,907,075 Other Liabilities... $11,535,538 Total Liabilities and Members Equity... $289,412,806 TOUCHSTONE ENERGY
8 O F F I C I A L N O T I C E ANNUAL MEETING 2017 FEATURING Season 10 American Idol Winner Scotty McCreery See You Tonight Feelin It I Love You This Big The Trouble With Girls and many more Registration - 4 p.m. EDT Business Meeting - 7 p.m. EDT Thursday, June 8 SKRECC HEadquaRtERS Turn at stoplight 22 on S. Highway 27 in Pulaski County; SKRECC is on the right. Free bucket and LED light bulbs for all registering members Prizes for all ages Information about South Ky. RECC and our many services Inflatables and fun for the kids Call (606) for more information. All offices of SKRECC will be CLOSED Annual Meeting day!
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