Georgia Georgia Georgia Celebrating the Georgia lifestyle
GEMC
®
MAGAZINE
Celebrating the Georgia lifestyle
POWERING YOUR LIVES
®
GEMC
2021 Cobb EMC Annual Report
MAGAZINE
Celebrating the Georgia lifestyle
GEMC
®
MAGAZINE
Read the Cobb EMC Annual Report Page B Join us for the 83rd Annual Meeting See back page SEPTEMBER 2021
2021 ANNUAL REPORT
LETTER TO MEMBERS From the CEO and the Chairman of the Board For more than 10 years, we’ve been investing in sustainable technology that supports safety, reliability and affordability for our members. We perform year-round maintenance to strengthen our system. Our automated smart grid technology can often sense power interruptions and automatically reroute power around it, which may shorten the length of an outage.
From left, Kevan Espy, President and CEO, and Tripper Sharp, Chairman, Board of Directors.
We all experienced change this past year. The COVID-19 pandemic has left no part of our lives untouched. Yet while we all adjusted to a new normal, we focused on providing you reliable power and on supporting the members and communities we serve in their time of greatest need. But we also continued to be a leader among EMCs by innovating and breaking ground on a major renewable energy project, declaring our long-term sustainability goals and growing our electric vehicle experiences. Throughout the last year, Cobb EMC’s board and employees have focused efforts on maintaining dependable, affordable electricity and ensuring a cleaner future for the next generation. We’re one of the few electric co-ops in the nation with a solar and battery storage system on-site and we have significant diversified renewable energy sources in our portfolio.
B
As a not-for-profit business, we exist to provide you with reliable electricity – not to make a profit. When we have a good year and earn profits or margins, we can give cash back to our members. It’s one of the things that makes an electric co-op unique, and it’s one of the benefits of being a Cobb EMC member. Thanks to leadership planning, securing future power needs and operating efficiently, our board voted to return $15 million in excess revenue – known as capital credits – to members who received electricity from Cobb EMC in 2019. Capital credits are your individual portion of the co-op’s profits. The amount you will receive is based on how much you paid for electricity during 2019. Over the last 12 months, our board also gave $2.2 million back to members in the form of a Wholesale Power Adjustment (WPA) credit on electric bills. We’re proud to keep money where it belongs – in your pocket. Whether it’s keeping our rates low or returning excess revenue, we’re honored to serve you and to bring you savings. Thank you for the opportunity to power your lives, homes and businesses.
2020 HIGHLIGHTS Gas South, a wholly-owned subsidiary of Cobb EMC, also offers you big savings, including no deposit and no connection fee, plus a permanent discount on already low rates. Gas South helps keep Cobb EMC strong by returning its profits to Cobb EMC, which helps keep electric rates low and reliability solid. Together, we save you money. As a co-op member, you belong to something special. We’re proud to work with the best employees in the electric industry who are dedicated to providing you with safe, reliable, affordable and sustainable electricity. Thank you to each of you for being a valued member of Cobb EMC. We want to invite you to our annual meeting so you can enjoy our member appreciation event. Bring your family to Jim R. Miller Park on Saturday, Sept. 18.
Kevan Espy President and CEO
STRONG FINANCIAL POSITION We operate responsibly for the benefit of you, our member-owners. Strong investment grade rating of A+ by Fitch Ratings in 2020 Lowered member bills nine times in four years through WPA credits $15 million returned to members in the form of capital credits
IMPROVEMENTS FOR MEMBERS
Everything we do is with our members in mind, and we work to make your experience with us easier and more convenient. Launched text message and email alerts for outage and account info
Tripper Sharp Board Chairman
Highest customer satisfaction survey scores in company history Opened Solar Flower Garden on-site – freely available to members and the community Invested in clean energy technology, including solar and battery storage
C
2021 ANNUAL REPORT
OUR MISSION
OUR VALUES
Reliable, safe electricity, Rate competitive, Robust governance, Relevant services, Recognized employer
Put People First. Stay Safe. Innovate. Own It.
HOW WE OPERATE Since 1938, our co-op has operated according to a core set of principles that make us different from other electric utilities. Learn more about the cooperative principles and how they impact you as a member at cobbemc.com/about.
1. OPEN AND VOLUNTARY MEMBERSHIP
5. EDUCATION, TRAINING AND INFORMATION
We welcome all qualifying members to the co-op.
We provide training to employees and members.
2. DEMOCRATIC MEMBER CONTROL
6. COOPERATION AMONG COOPERATIVES
Members have a voice and a vote in co-op operations.
Co-ops help other co-ops when needed.
3. MEMBERS’ ECONOMIC PARTICIPATION
7. CONCERN FOR COMMUNITY
Members have ownership in the co-op.
We’re dedicated to improving our community.
4. AUTONOMY AND INDEPENDENCE We’ll remain in the hands of our member-owners.
YOUR BOARD OF DIRECTORS The co-op is regulated by a board of nine directors who work diligently to plan for the future. Directors are elected from and by the membership. To learn more about each director go to cobbemc.com/board and to see which areas of the co-op they serve, visit cobbemc.com/district.
D
Ed Crowell District 1
David McClellan District 4
Tripper Sharp District 5 Chairman
David Tennant District 6
Malcolm Swanson District 7
Bryan Boyd District 8
Rudy Underwood District 2
Kelly Bodner District 3
Eric Broadwell District 9
Secretary-Treasurer
Vice Chairman
Nominee for Director Election running unopposed
Nominee for Director Election running unopposed
Nominee for Director Election running unopposed
Underwood has more than 30 years experience managing public affairs, public policy and public relations issues with membership-based organizations. In addition, he has served on boards of several local, state and national organizations and is the past chair of the Southern States Energy Board.
Bodner has been in education for 27 years, is a Title 1 District Science Coach for Cobb County Schools and serves on the Georgia Science Teachers Association board.
Broadwell has been a Cobb EMC board member since 2012. He has a diverse background in the fields of aerospace engineering, technology consulting and nonprofit management. He has consulted for the boards of some of the nation’s largest financial companies.
More at cobbemc.com/board
She holds a specialist degree from Kennesaw State University in education leadership. Bodner has been recognized as Georgia’s Elementary Science Teacher of the Year and volunteers for community youth programs.
More at cobbemc.com/board
More at cobbemc.com/board
E
2021 ANNUAL REPORT
COMMUNITY GIVING
Cobb EMC Foundation and economic development At Cobb EMC, our service to the community goes beyond delivering reliable power. We’re part of the community that founded us, and we believe in investing in the neighborhoods where we live and work.
We don’t do all of this alone. You help us make a difference. The Cobb EMC Foundation is supported by members who choose to round up their bills to the nearest dollar through Operation Round Up.
Nonprofits rely on our support, and much of that comes from the Cobb EMC Foundation. Since 2013, the foundation has given more than $6 million to local nonprofits with outreach programs that reach our fivecounty service area.
In 2020, for the first time ever, the foundation created an emergency relief fund to expedite funds to support critical needs in our community. This resulted in a collective donation of $50,000 to 24 organizations assisting with the COVID-19
pandemic. The emergency relief fund is now a standing part of the foundation and will be activated as needs arise. In addition to supporting nonprofits in the community, we’re actively involved in civic organizations and local chambers of commerce to contribute to economic development. We want our community to thrive. Enhancing economic development strengthens our local economy, adds jobs and creates stability.
COMMUNITY GIVING Education
Where we come from is just as important as where we’re going, and that’s why our investment in the community also focuses on the future generation. From scholarships to electric safety, our programs reach thousands of students annually. 2020 ACHIEVEMENTS INCLUDE: • Partner in Education for 145 schools in our service territory • Awarded $86,500 in scholarships to studentmembers
• Awarded $31,800 in minigrants to teachers at partner schools in support of special projects
• Planted trees at six elementary schools to honor teachers and beautify our schools
• Hosted Virtual Literacy Week, in partnership with Gas South, for 15,000 students
• Employed 12 high school student-members through internship programs
• Sponsored virtual STEM competitions and science fairs in Cobb, Cherokee and Paulding counties
Beyond supporting schools, we honor the first responders in our community each year by providing lunch to local police officers, firefighters and emergency call center operators.
• Provided more than 75 families with Christmas gifts through the Shop with a Lineman program and employee donations
Learn more about our commitment to the community at cobbemc.com/community.
2021 Community Foundation Scholarship recipients accept their scholarships valued at $5,000 each. Scholarships can be used toward a four-year university or vocational/technical college.
2021 ANNUAL REPORT
RELIABILITY
Powering your homes COMMITMENT TO A CLEAN ENERGY FUTURE Over the last decade, we’ve continually invested in renewable energy and sustainable technology. Increasing the amount of clean energy in our diverse energy portfolio allows us to deliver reliable power and to achieve our renewable energy goals without passing additional costs on to our members. In 2020, we broke ground on our latest innovations to bring more clean energy to our system and enhance options for our members.
SEVERE STORM HIGHLIGHTS RELIABILITY
• Opened innovative Solar Flower Garden featuring solar flowers, which can provide an additional 13,140 kWh of energy, in addition to serving as an educational experience for the community.
Electricity powers many aspects of our lives, and we know how important it is to keep the lights on. When a storm threatens our area and causes service interruptions, our team goes straight to work. This was our reality in October 2020 when Tropical Storm Zeta’s strong winds and heavy rains swept through, causing the worst damage to our system in 82 years.
• Built an on-site battery storage facility that can generate enough power for 220 homes and provides 50% of the energy headquarters needs to operate. We can discharge the battery during peak times to reduce Wholesale Power Costs and save money for the membership.
• Launched the Green Energy for a Penny renewable energy credits (RECs) program so members can participate in renewable energy without installing solar panels at their home or business.
Over the course of five days, we restored 120,000 outages with the help of mutual aid from neighboring co-ops and contract crews. A large portion of outages were restored from our command center through our smart grid system, which allows us to reroute power and heal the system remotely. Other outages required manual repairs as crews worked day and night to repair 137 damaged poles scattered across the service territory.
We’re moving toward a more sustainable energy future without passing on additional costs to our members.
For the safety of our members and system, we watch severe weather events closely and prepare in advance to respond should outages occur.
• Installed solar panels on top of three buildings and a solar car canopy – 1.5 MW AC – to charge our battery storage system.
Cobb EMC uses state-of-the-art technology to deliver reliable electricity. Our electric grid is backed by smart technology and uses intelligent devices to keep your lights on. Smart meters connect to the grid and alert us of outages almost immediately, so we can restore power quickly and often without sending a crew. Learn more at cobbemc.com/smartgrid.
BENEFITS OF SMART GRID TECHNOLOGY • 25% reduction in outages over the last 10 years. • 99.99% service reliability. • Faster outage restoration – ranked No. 1 in the nation.* • More reliable power – ranked No. 3 in the nation.* • More efficient member service and support. • Lower operating costs. •
H
*Institute of Electrical and Electronics Engineers
SUBSIDIARY BRINGS VALUE TO MEMBERS Gas South is a wholly-owned subsidiary of Cobb EMC, and together we save you money. As a member, Gas South offers you exclusive benefits and big savings, including no deposit, no connection fee and a permanent discount on low rates. Gas South helps Cobb EMC remain strong by returning its profits to the co-op, which in turn helps to keep electric rates low and reliability solid. In October of 2020, Gas South announced its acquisition of Florida-based Infinite Energy. Gas South now provides natural gas service to approximately 425,000 residential, commercial, industrial and wholesale customers throughout the Southeast. The acquisition brings together two strong and successful companies with shared geographic footprints, similar ‘people first’ cultures and complementary core business competencies.
As part of Gas South’s mission to “Be a Fuel for Good,” the company pledges 5% of its annual profits to support the communities it serves. In 2020, it donated over $1 million to help families impacted by the COVID-19 pandemic. Infinite Energy’s similar ‘people first’ culture with a focus on community involvement, customer experience and company culture fits nicely into the Gas South culture and has helped make the transition a success.
A COBB EMC COMPANY Gas South offers you natural gas savings you can feel good about. Visit GasSouth.com/cobb for more.
2021 ANNUAL REPORT
FINANCIALS AND STATISTICAL PROFILE
TREASURER’S REPORT Cobb Electric Membership Corporation is a not-for-profit electric membership corporation whose purpose is to provide electric service to its members. The consolidated financial statements present the financial position and results of operations of Cobb Electric Membership Corporation and its whollyowned subsidiaries, Cobb Energy Management Corporation, Gas South LLC and Fiber South Broadband LLC. McNair, McLemore, Middlebrooks & Co. LLC conducted our audits as of December 31, 2020, in accordance with auditing standards generally accepted in the United States of America. The financial information included in this report represents a summary of our consolidated financial condition and operating results. Copies of the audited consolidated financial statements are available at cobbemc.com. Review these statements for a more comprehensive overview of our financial condition.
Kelly Bodner Secretary-Treasurer Cobb EMC Board of Directors
J
2020
BALANCE SHEET – CONSOLIDATED ASSETS
Net Utility Plant Other Property and Investments Current Assets Other Assets
$ 684,478,695 246,642,802 262,139,530 152,189,479 $ 1,345,450,506
BALANCE SHEET – CONSOLIDATED EQUITIES AND LIABILITIES
Equities Long-Term Liabilities Current Liabilities Deferred Credits
$
441,643,457 618,422,669 253,583,455 31,800,925 $ 1,345,450,506
CONSOLIDATED STATEMENT OF OPERATIONS
Operating Revenues Operating Expenses: Cost of Revenues Distribution Operations Distribution Maintenance Consumer Accounts Consumer Service and Information Administrative, Selling and General Depreciation and Amortization Operating Taxes Total Operating Expenses
$ 802,432,007
548,401,802 10,266,461 23,971,038 13,639,427 1,168,166 96,980,841 38,414,899 4,371,110 737,213,744
Operating Margins Before Interest Expense 65,218,263 Interest Expense 20,119,733 Operating Margins After Interest Expense 45,098,530 Nonoperating Margins 1,933,885 Generation and Transmission Patronage Allocations 6,057,099 Other Capital Credits and Patronage Allocations 2,201,679 Net Income Before Income Taxes 55,291,193 Income Tax Expense 6,051,000 Net Income $ 49,240,193
210
4.5
205
4.0
200
3.5
195
2016 2017 2018 2019 2020
Number of Active Meters
209.8
(In thousands)
2016: 199.7 2017: 201.8
2018: 203.7 2019: 206.5
3.0
Kilowatt-hour Sales
3.9
10,700
1,200
10,500
1,100
9,000
1,000
8,300
2016 2017 2018 2019 2020
Miles of Line
2016: 9,068* 2017: 9,141
9,321
2018: 9,206 2019: 9,262
2016 2017 2018 2019 2020
900
(In billions)
2016: 4.1 2017: 3.9
2018: 4.1 2019: 4.1
2016 2017 2018 2019 2020
Peak Load
1,049.4
(In thousands of kilowatts)
2016: 1,170.2 2017: 1,127.8
2018: 1,162.3 2019: 1,192.2
*Due to system true-up.
1,000
450
800
400
400
350
0
2016 2017 2018 2019 2020
Total Plant Value
963.4
(In millions of dollars)
2016: 899.5 2017: 925.1
2018: 907.2 2019: 934.5
300
2016 2017 2018 2019 2020
Total Operating Revenue
430.7
(In millions of dollars)
2016: 420.9 2017: 429.7
2018: 434.5 2019: 425.6
2020 year-end – numbers represent Cobb EMC data only
K
2021 ANNUAL REPORT
Come to our member appreciation event and hear how we’re working to make your electric co-op more convenient and reliable. Plus, get free fair tickets and win prizes! Each Cobb EMC member who registers for the meeting will receive up to four North Georgia State Fair tickets.
Saturday, September 18 8-11:30 a.m. at Jim R. Miller Park 8-9:30 a.m.: Member registration More info: cobbemc.com/annualmeeting For the safety of our employees and members, we will be following CDC guidelines during the event.