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Cooperatives: Building A Better World
A SUPPLEMENT TO CAROLINA COUNTRY
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Board of Directors
South River EMC Board of Directors back row: Carlton Martin, George Williams, Glenn Riddle and William E. Tew Jr. Front row: Kelly Harrington, Mary Talley, Francis Clifton, Laurie Chancy and William B. Jackson.
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Affordable. Innovative. Member Focused. It’s hard to predict the future, but one thing seems certain -- new government regulations will increase the cost of electricity. We want to work with you to keep your electric bills AFFORDABLE. We’re controlling costs through INNOVATION, and no matter what the future holds we’ll continue to put you, our members FIRST.
Looking Find our how we are looking out for you www.sremc.com or www.ourenergy.coop.
for
Out
You
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Executives’ Report The past year flew by quickly and was notable for extreme weather events such as an ice storm, tornado and hurricane. Technology continues to play a large part in the ongoing improvement of our service to our members. However, despite the challenges posed by Mother Nature, it was also a year marked by achievement and recognition of success. Mid-afternoon Saturday, April 16 -- two days after the annual meeting -- a series of tornadoes tore through our area leaving a large path of destruction and narrowly missing both of our offices. In just a matter of minutes we found ourselves with about 32,000 members without electric service. Due to the experience of our employees, hard work and commitment, the restoration of electric service was complete by the morning of Monday, April 18. Crews from Aberdeen, Asheboro and Shallotte joined the efforts to replace 154 utility poles that were uprooted or snapped, to string countless miles of lines and replace 68
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transformers that had been destroyed. Then, August 27 brought a glancing blow from Hurricane Irene. This storm impacted a total of about 5,000 members. After our members all had power, South River EMC sent crews to assist Tideland EMC in Pantego – a coastal cooperative that was more heavily impacted. Weather extremes again marked 2011 as an unusual year. The months of October, November and December, members received credits on their bills to reflect an offset of fuel costs due to the extreme heat and higher-thananticipated revenue. The total of the credits was $1,455,494. This combined with the capital credit retirement of $2,699,985 means that South River EMC returned $4.1 million to members in 2011. Last year we engaged in a campaign to ensure we have updated phone numbers and email addresses for our members. We realize that over time this information changes and most members don’t think to
contact their utility with the new data. This information is vital to the launch of a new Integrated Voice Response, or IVR, system. Our automated IVR enables members to receive service quicker while also being able to make bill payments 24hours a day using a credit card or e-check. Members can also call and get information about their account using the IVR. The IVR allows our customer service representatives to handle more calls in a shorter time span and gives you the ability to choose from a menu of options for service you need so you are sent to the proper department. An outage management system was added to complement the IVR, which not only
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enables outage reporting through the automated system, but also gives updates of outage restoration. Once the outage is reported, the system tells if the cooperative is aware of the outage, if crews have been dispatched and the extent of the outage (if known). You can also request an automatic call-back once power has been restored in your area. This is especially helpful for anyone who has gone to stay with family or friends until power is restored. The outage management system also interfaces with our Web site so members can see where outages are on our system and how many members are affected. Both the IVR and outage management system are linked to phone numbers. When a member contacts the cooperative, the system asks for their phone number and their account is immediately identified. We have also added a mail remittance system, which allows us to process payments more efficiently. Currently, an average of 12,300 credit card payments are processed monthly; of these, 33 percent are made online, 22 percent through the automated phone system and 43 percent are han-
dled by customer service. The new technologies have also impacted the volume of mail we receive monthly. In 2008, there were 22,000 bill payments mailed monthly. In 2011, that number dropped to an average of 10,000 payments made by mail per month. All of the technological advancements over the past few years, coupled with our internal processes and a dedicated, competent workforce, have helped to make South River EMC one of the best-run cooperatives in the nation. This claim is not biased, but based on a series of factors considered in the Key Ratio Trend Analysis, KRTA, compiled by the Cooperative Finance Corporation (see page 6). The KRTA is based on five years of data for 815 electric cooperative systems across the nation. The full KRTA includes 145 ratios segmented into 10 categories. The categories vary from a base group analysis, financials, revenue and margins, sales, controllable expenses, fixed expenses, total expenses, employees, growth and electric plant (facilities). The KRTA gives cooperatives a comparison tool by which they can measure their performance within their
state, among similarly sized cooperatives and against other electric cooperatives as a whole. In many of these key areas, South River EMC ranks in the top 10 percent of cooperatives in the country. Our financial ratios indicate that we generate earnings adequate to meet long-term interest payments and to pay our debt. Additionally, our long-term debt as a percentage of our total assets meets the national average and is lower than both the North Carolina average and the average of cooperatives of the same size. South River EMC retires (refunds) a greater amount of capital credits to members than the average cooperative. Amazingly, South River EMC has been able to accomplish all of this while maintaining a lower rate of revenue per kilowatt hour (kwh) sold than the national and state averages. As you can see, your cooperative is in good hands. The employees are well-trained, dedicated and competent, the management is seasoned and knowledgeable and the board takes their fiduciary responsibilities seriously – all because we are looking out for you.
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KRTA - Key Ratio Trend Analysis Below are several of the key operational areas where South River EMC exceled when compared to 814 other electric cooperatives nationally. Each category compares South River EMC to other cooperatives in NC, nationally and those of similar size. Category
South River EMC
Nationwide
North Carolina
Consumer Size
Total kwh sold
853,674,000
284,611,000
528,396,000
1,044,324,000
Total Utility Plant (facilities)
188,619,000
66,307,000
148,225,000
201,381,000
Number of Employees
97
47
78
135
36.60
41.78
36.55
36.34
2.43
1.99
2.92
2.02
98.07
100.25
109.33
98.07
81.53
61.83
76.62
67.31
18.07
20.31
20.58
17.14
371.08
422.47
382.69
348.07
62.20
62.12
62.68
65.22
81.65
79.00
84.11
80.73
18.07
20.31
20.58
17.14
7.37
10.59
9.46
7.92
428.47
291.2
383.17
370.46
12.29
4.80
8.36
8.42
Equity as a percentage of assets Annual capital credits retired per equitay % Total revenue per kwh sold (mills) Residential kwh sold per total kwh sold (%) Total controllable expenses per total kwh sold (mills) Total controllable expenses per consumer ($) Power cost per total kwh sold (mills) Fixed expenses per total kwh sold (mills) Total operating expenses per total kwh sold (mills) Total wages per kwh sold Avg. consumers per employee Annual growth in kwh sold (%)
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Financial Highlights
Assets
2010
$188,619,290 Electric Plant at Original Cost 43,825,433 Less Depreciation $144,793,857 Net Plant 4,914,912 Cash 11,964,243 Investments 10,865,297 Accounts Receivable 1,556,704 Materials and Supplies 1,931,664 Prepayments, Other Accrued Assets and Deferred Debits $176,026,677 Total Assets
2011 $198,454,262 48,563,778 $149,890,484 5,139,238 13,866,548 9,898,845 1,714,931 2,017,080 $182,527,126
Liabilities Long Term Debt - RUS, CFC Consumer Deposits Accounts Payable Deferred Credits Other Liabilities Membership Fees Patronage Capital Other Equities Total Liabilities
$82,268,975 2,317,884 9,904,664 1,617,720 18,483,856 76,295 61,357,283 $176,026,677
$89,426,052 2,520,079 7,044,761 2,100,535 18,566,113 73,010 62,796,576 $182,527,126
$86,707,527 56,617,558 2,554,343 3,449,202 1,907,444 3,265,070 4,246,790 5,939,166 2,766,461 4,377,532 $85,123,566
$89,603,794 59,053,069 2,431,626 2,700,393 2,217,020 3,605,404 4,876,022 5,974,743 2,954,937 4,673,579 $88,486,793
$1,583,961 366,778 1,236,713 $3,187,452
$1,117,001 446,524 1,363,048 $2,926,573
Operating Statement Operating Revenue and Patronage Capital Expenses Cost of Purchased Power Distribution Expense Operations Consumer Accounts Expenses Customer Service and Information Expenses Administration General Expenses Maintenance Expenses Depreciation Amortization Taxes Interest on Long Term Debt Total Cost of Electric Service
Our Margins Operating Margins and Patronage Capital Non-Operating Margins Other Capital Credits and Patronage Dividends Total Operating and Non-Operating Margins
unaudited
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South River Electric Membership Corporation