Innovation&Integrityin in all that we do...

Transcription

1 PALMETTO ELECTRIC COOPERATIVE, INC. l 2017 ANNUAL REPORT Innovation&Integrityin in all that we do...

2 EXECUTIVE REPORT 2017 As a member owned utility, Palmetto Electric Cooperative has always worked diligently to offer programs, services and ideas that not only empower every home and business we serve but also the entire community where we work and live. Our number one job is to enhance the lives of our members, offering smart solutions that make a positive difference for everyone. As a not-for-profit organization, we also operate under a timehonored code of ethics that speaks to wise and cost-efficient ways of doing business. Reflecting on the challenges and opportunities of this past year, we have worked hard to provide innovative ideas that are built on discipline and trust. To that end, we proudly bring you Innovation and Integrity the theme of our 2017 annual report that speaks to our collective work of the past year and a reminder to always serve members in the best possible ways. In 2017, Palmetto Electric employees worked hard to offer Innovation and Integrity across all levels of service, programs and community outreach, including: A. Berl Davis Jr. P r e s i d e n t a n d C h i e f E x e c u t i v e O f f i c e r Jeremiah E. Vaigneur C h a i r m a n o f t h e B o a r d Weather Response: As weather once again proved to be challenging to our community this past year, our members looked to us for reliable and responsible solutions. The strong winds, pouring rain and high tides of Hurricane Irma brought damage to the Lowcountry, but Palmetto Electric crews worked diligently and swiftly to return power and normalcy to our service area. We also used innovative solutions and modern technology that allow us to remotely communicate with our meters and substations to help expedite restoration time. In addition, our mobile app and social media enabled us to stay in touch with our members in a fast and efficient manner. In all instances, we thank our members for their patience, the community for its support, and especially our line workers and office personnel who worked around the clock to restore power within two days. Capital Credits: In 2017, Palmetto Electric was pleased to return $4.5 million in Capital Credits to our members our highest amount since our founding in This record return reflects your ownership in Palmetto Electric and we were extremely excited to give back these Capital Credits to you. Sustainability: As stewards of our natural resources, Palmetto Electric is proud of our environmental record. In 2017, we debuted two new community solar farms, making solar energy more accessible for all. The 240 shares for the solar farms generating capacity sold out in four days and speaks to our commitment to community and natural energy solutions. This initiative also goes hand in hand with our other sustainability efforts, including Green Power, Solar Schools and our ongoing Bright Ideas teacher grant funding. Education: With a focus on our future generations, Palmetto Electric sponsored several high school students to attend the first statewide Cooperative Youth Summit in the state s capital in Youth Summit attendees received an educational immersion into electric cooperatives, helping them to comprehend the cooperative business model and giving them an opportunity to meet with Governor Henry McMaster. In addition, we once again sponsored local high school juniors to represent Palmetto Electric Cooperative in the nation s capital on the Washington Youth Tour. Participants were able to observe our government in action and visit historical sites while also learning about co-ops and meeting students from around the nation. Customer Satisfaction: Finally, we are especially proud to share our 2017 American Customer Satisfaction Index (ACSI) score of 91 the highest we have ever received. This independent survey of Palmetto Electric members is a good indication of how we are leading with Innovation and Integrity across all lines providing excellent service to our members and ranking Palmetto Electric in the top one percent of all ACSI-participating co-ops nationwide. For more than 77 years, we have been driven by Innovation and Integrity in everything we do, and we strive to give members the exemplary service and dedication they deserve. When we succeed, our community thrives and, on behalf of all Palmetto Electric Cooperative employees, we thank you for the privilege to serve you. Jerem iah E. Vaigneur A. Berl Davis Jr. 1

3 Innovation&Integrity Integrityin in all that we do... The very creation of electric cooperatives proved that innovation along with a mission of community-driven service could create a power utility by the people and for the people. Since 1940, we have led by example, putting the needs of our members first and foremost to help everyone conserve valuable resources while also helping everyone save their hard-earned money. In 2017, we were proud of our collaborative efforts in these areas, and we highlight some of our community initiatives of the last year in this annual report. Innovation & Integrity in sustainability and education In 2017, Palmetto Electric, in conjunction with Santee Cooper, continued to offer Green Power South Carolina s first source of renewable power generation. Palmetto Electric s Green Power program was the first green power program in the state, and the only one that is Green-e certified, which means it meets the environmental and consumer-protection standards set forth by the nonprofit Center for Resource Solutions. Our Green Power Partners commit to buy a certain percentage of their energy as Green Power and support renewable energy which improves the environment and our community. And best of all, 100% of Green Power revenue funds existing and future renewable energy projects. Since its launch in 2001, the program has grown from one landfill site generating 2.2 megawatts to 6 landfills in Horry, Lee, Richland, Anderson, Georgetown and Berkeley counties generating 28 megawatts of renewable energy. Green Power energy also has expanded in the classroom with the addition of more Green Power Solar Schools in our service area. Currently, there are 28 Green Power Solar Schools in S.C., including participating educational partners such as the Technical College of the Lowcountry, Hardeeville- Ridgeland Middle School and Hilton Head Middle School. Green Power Solar Schools encourage student interest in the environment and demonstrate the feasibility of renewable power. Our local sites are equipped with a total of 24 kilowatts of solar panels that provide a teaching, research and hands-on demonstration opportunity for students. Teachers and students also use a specially designed renewable energy curriculum that meets state science standards as well as an internet-based monitoring system that allows students to see how much power their school s solar panels are generating. The school outreach program continues to fulfill our ongoing commitment to reinvest Green Power funds back into renewable resources across South Carolina. Teri Anne Metelak, from Hardeeville-Ridgeland Middle School, teaches her sixth grade Solar School class about the power of solar energy. The students along with Principal Senaca Baines see firsthand how the sun can power their handmade vehicles. 2

4 Palmetto Electric s President and CEO Berl Davis (left) welcomed State Sen. Tom Davis (center) and State Rep. Jeff Bradley (right) along with other dignitaries at Palmetto Electric s Community Solar Dedication on March 31, On the Cover: The 120kW Community Solar project at PEC s Ridgeland office is now producing electricity for our members. Another source of renewable energy got a lot of attention this past year with the introduction of our two Community Solar Farms. With State Sen. Tom Davis and Rep. Jeff Bradley, along with other dignitaries attending, Palmetto Electric dedicated locations at our New River office in Hardeeville and near our Ridgeland office. Both sites offer a 120 kilowatt solar array and are already producing electricity. Community or shared solar means multiple people get electricity from a large solar array, offering an affordable and safe choice for members to purchase power from a carbon-free resource. Palmetto Electric began selling shares of the solar farm s generating capacity on a firstcome, first-served basis with the 240 shares made available to the public selling out in only four days. With this model, Palmetto Electric takes care of the construction, maintenance and upkeep, giving members the benefits of solar power without the burden of installing a system of their own. In 2017, Palmetto Electric also awarded $44,650 in Bright Ideas grants to 57 teachers in area schools that promote sustainability to our youngest minds. Awarded by the Palmetto Electric Trust, Palmetto Electric offers this yearly grant program to provide funding for innovative classroombased education projects. Since Palmetto Electric launched the program in 2004, area teachers in Hampton, Jasper and southern Beaufort counties have received more than $465,349 in grants. Last fall, the Bright Ideas Prize Team surprised local teachers in their classrooms with grant awards and gift bags to the delight of deserving teachers and their students. A highlight of the 2017 Bright Ideas grants included students working on a Power House Project to learn about alternative energy and sustainable living. In this innovative project, students were asked to build model houses and conduct experiments such as heating, cooling, conduction, convection and insulation. The project helped enhance the students understanding of renewable sources and provided the opportunity to learn in a fun and interactive way. Based on STEM Education, the project focused on science, technology, engineering and mathematics concepts taught through problemsolving, discovery, exploratory learning and critical thinking. Students also learned to work cooperatively as they built, investigated, discussed and evaluated concepts, ideas and designs. Stacey O Grady used her Bright Ideas grant for her Power House project building model houses and conducting experiments with her middle school students at Hilton Head Christian Academy, teaching them about alternative energy and sustainable living. 3

5 Innovation & Integrity through efficiency and savings Along with education and sustainability, Palmetto Electric used Innovation and Integrity in the creation of new energy conservation programs and services. One such popular program included Beat the Peak, a free and voluntary effort to help members control their energy costs. During peak demand an industry term for the critical periods when wholesale electricity prices soar members can Beat the Peak through text or alerts advising them how to reduce their energy use in peak demand hours. Alerts advise members to reduce power-intensive activities such as adjusting their thermostats higher by 3 degrees during summer afternoons and evenings; delaying activities that require hot water, such as washing clothes, taking showers or washing dishes; and postponing using heavy appliances, like clothes dryers and ovens. By offering this innovative idea, members learn how to shift their energy use to help conserve resources which helps keep costs down. Another popular program that has helped members save on their monthly billing includes the H2O Select Load Management Program. Providing members with plenty of hot water when they want it, the H2O Select water heater operates only during off-peak hours when electricity is at its lowest cost which passes savings on to members. With two ways to participate, members can either replace their current water heater with a new electric model to receive a rebate or they can choose the turnkey option where Palmetto Electric purchases and installs a new water heater for a nominal monthly fee spread over five years. Jami Baxter (center), mother of two daughters, Emmaline (left) and Amelia (right), knows the importance of having hot water for hot baths and washing dishes and clothes. She is also learning how to save energy during the peak demand hours. Jorge E. Cardenas, PEC Marketing Technician, installs a high-efficiency Rheem Marathon lifetime water heater offered through Palmetto Electric. And innovation is also at every member s fingertips with Palmetto Electric s My Energy mobile app. Available for Apple and Android devices, the My Energy app provides members with nearly real-time information about their energy use. By viewing daily usage and history, members can better understand how and when they use energy, leading to insights on how they can continue to conserve energy. DeAnne Owens, co-owner of Simply Carolina Kitchen & Bath in Ridgeland, S.C., keeps informed about her Palmetto Electric account anytime she wants with updates on her free PEC mobile app. We look forward to continuing to put Innovation and Integrity in all that we do in 2018 and beyond always putting excellence in service at the forefront. 4

6 BOARD OF DIRECTORS 2017 Palmetto Electric Cooperative is governed by a policy-making board of 12 trustees six who reside in Beaufort County, three who reside in Hampton County and three who reside in Jasper County. The directors serve terms of three years each, with terms of two directors from Beaufort County and one director each from Jasper and Hampton counties expiring each year. These directors are elected at the Annual Meeting of the members, and exercise all of the powers of the Cooperative, except those reserved for the members, according to the bylaws of Palmetto Electric. Jeremiah E. Vaigneur Chairman of the Board JASPER COUNTY C. Alex Ulmer Vice Chairman Eunice F. Spilliards Secretary/Treasurer JASPER COUNTY Dr. Earl Bostick Sr. JASPER COUNTY Henry Driessen Jr. James O. Freeman HAMPTON COUNTY Carolyn Grant Jimmie D. McMillan HAMPTON COUNTY William J. Nimmer James L. Rowe D. Terrell Smith HAMPTON COUNTY David A. Solaro 5

7 FINANCIAL REVIEW 2017 BALANCE SHEET AS OF DECEMBER 31, A S S E T S : Total Utility Plant... $ 266,438,234 $ 263,513,672 Less: Provision for Depreciation... 83,744,064 81,415,759 Net Utility Plant... Other Property & Investments... $ 182,694,170 15,856,158 Cash General Fund... Temporary Cash Investments... Accounts Receivable... Materials & Supplies... Accrued Unbilled Revenue... Prepayments... Total Current and Accrued 12,932,903 3,680,795 7,238,357 1,493,031 9,107, ,100 14,208,662 5,681,297 6,525,088 1,537,667 7,430, ,790 Assets... Deferred Charges... Total Assets and Other Debits... 34,895,908 9,303,293 $ 242,749,529 L I A B I L I T I E S : Memberships... $ 288,830 Patronage Capital... 68,509,954 Other Equities... 8,652,463 Total Equity... Total Long Term Debt... Accounts Payable... $ 11,319,311 Consumer Deposits... 4,403,972 Other Current and Accrued Liabilities... 55,274,267 Total Current and Accrued Liabilities... Total Liabilities and Other Credits... STATEMENT OF MARGINS AND PATRONAGE CAPITAL AS OF DECEMBER 31, Operating Revenue... Operating Expense $ 169,519,891 $ 158,310,507 Cost of Power... $ 119,640,552 $ 113,321,419 Operation and Maintenance... Consumer Accounts... Administrative and General... Depreciation... Taxes... Interest... 9,436,046 5,302,758 11,765,270 8,971,517 5,768,480 3,783,007 8,685,771 5,075,384 10,696,637 8,780,291 5,755,879 3,968,680 Total Operating Expense ,667, ,284,061 Net Operating Margins... Non-Operating Margins $ 4,852,261 $ 2,026,446 Interest Income... $ Patronage Capital from Associated Organizations , ,759 $ 176, ,940 Net Margins... Patronage Capital Beginning of Year... Retirement of Capital Credits... Patronage Capital End of Year... $ 77,451,247 94,300,732 70,997,550 $ 242,749,529 1,159,118 $ 6,011,379 67,017,474 $ 73,028,853 4,518,899 $ 68,509,954 $ 284,145 67,017,474 8,699,394 $ 9,261,695 4,277,207 54,688,032 $ 182,097,913 15,258,889 35,643,833 11,339,153 $ 244,339,788 $ 76,001, ,111,841 68,226,934 $ 244,339,788 1,148,498 $ 3,174,944 68,615,439 $ 71,790,383 4,772,909 $ 67,017,474 The Cooperative s financial statements are audited annually by independent certified public accountants. Copies of the audited financial statements and accountants reports are available for your inspection at the Cooperative s offices. 6

8 The Touchstone Energy symbol is your assurance that we re a community-minded electric cooperative providing high standards of service for customers large and small. For power outages, call: PowerTouch Hampton: Hilton Head: New River: Ridgeland: palmetto.coop