Your Co-op Cares DIXIE ELECTRIC COOPERATIVE 2 0 2 0 A N N UA L R E P O RT
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TABLE OF CONTENTS Executive Report
3
Board of Trustees
4
Management Team
5
New Solutions for New Challenges
6
2020 Facts and Figures
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Who We Are
7
Caring for Our Members and Community
8
Navigating 2020
8
System Maintenance & Reliability
9
2020 Balance Sheet
10
Secretary-Treasurer’s Report
11
Financial Report
11
2020 Statement of Operations
11
Distribution of Costs
11
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Executive Report We learned in 2020 that we never know what challenges may come our way, but I feel that we also learned how to adapt and make the most of our circumstances. When COVID-19 hit, we found ourselves reevaluating our business operations throughout the year to navigate our ever-changing circumstances. We developed programs to assist our members through difficult times and referred others to local community resources for assistance. Jim Rohn once said, “The more you care, the stronger you can be.” Our employees and members showed great strength during the adversity we all faced during 2020. As if battling COVID-19 weren’t enough of a challenge during 2020, we were also hit with several major hurricanes. Despite these challenges, and the fact that our power supplier, PowerSouth Energy Cooperative, closed its coal-fired power plant, we were able to avoid any rate increases and continued our mission to safely provide our members with economical and reliable electricity. As soon as we became aware of the potential severity of the coronavirus, we responded quickly. We provided teleworking opportunities for some employees and created rotating work schedules for others to allow for social distancing and to hopefully minimize the risk of the spread of the virus throughout our workforce. We also limited contact between personnel from our two offices to help ensure we always maintained sufficient staffing. We implemented Centers for Disease Control and Prevention (CDC) protocols among our employees and members to help keep everyone healthy and safe. We closed our office lobbies but allowed our drive-thrus to remain open for service. We also modified procedures to allow more services to be performed electronically and online to reduce the traffic flow at our offices. Cooperative personnel were designated at each office to do frequent cleaning throughout the building, including disinfecting and sanitizing door handles and other commonly used areas of the facility. Maintaining the infrastructure that distributes electricity to the more than 25,000 homes and businesses we serve remained a top priority at your cooperative. Line crews, right of way crews and warehouse personnel continued to work to ensure all members had power to do their jobs and educate their children from home. Just as our forefathers overcame many challenges over 82 years ago when they worked to bring electricity to rural portions of our service area, our current board of trustees and employees are ready to face any new challenges that come our way. Your co-op cares and we are always looking out for you. R. Gary Harrison President/CEO
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Board of Trustees THOMAS ELLIS
HELENA DUNCAN
DISTRICT 1, SEAT 1
DISTRICT 2, SEAT 4
Thomas Ellis, and his family, have owned and operated Priester’s Pecans for many generations. He grew up in the business, working as a laborer in the pecan shelling plant, working and supervising on the production side, overseeing customer service, handling computer management, and eventually managing the corporate responsibilities as president of the company. He also owns and operates Triple E Farm, which raises both cattle and poultry. Ellis is very active in agricultural and economic development organizations in the community and throughout the state. He is also actively involved in his church serving in leadership capacities and participating in various mission trips.
Helena Duncan received her bachelor’s degree in finance from Auburn University Montgomery. She has over 30 years of experience in the banking industry with the majority of her time serving in executive management positions. Duncan currently serves as senior vice president of operations and investor relations with the Business Council of Alabama where she is responsible for building and growing member relations and developing strong partnerships within the business community. She also oversees accounting, communications, human resources, marketing and membership. Duncan is actively involved as a community leader. She has served as chairman of the board for Saint James School, and as a board member for the Montgomery Area Chamber of Commerce, Child Protect, Women in Business Task Force, Central Alabama Community Foundation, and the Board of Governance for Committee of 100.
KIM JACKSON
TOM JAMES
DISTRICT 1, SEAT 2 Tom James has a bachelor’s degree in civil engineering from MIT and a master’s degree from the University of Houston. He served as a lieutenant in the United States Navy during Vietnam. James was in the heavy industrial construction business for over 35 years, working with companies such as Shell Oil, ORBA Corporation, Blount Energy Resource Corporation, and Zachry Industrial, Inc. Through this experience he has firsthand experience in all types of power generation facilities, cement plants, steel manufacturing, and other large industrial projects. He has held the position of secretary/treasurer, vice chairman, and chairman of Dixie’s board of trustees. He received his Board Leadership Certificate, is a Credentialed Cooperative Director, and completed the Director Gold Credential Program through NRECA.
JAMES SIKES
SECRETARY/TREASURER DISTRICT 2, SEAT 5 Kim Jackson has a bachelor’s degree from Ohio University and spent his entire professional career with PricewaterhouseCoopers, from which he retired in 2010. As a financial services assurance partner, he specialized in the audit of public company banks, and worked with other industries such as construction and real estate development. He played a leading role in the development of the Firm’s internal audit services practice, and assisted numerous companies in their implementation of the Sarbanes-Oxley internal control requirements. Following retirement, Jackson served as business manager at Montgomery Catholic Preparatory School until 2019. He has served on Dixie’s board since 2015, and currently serves as secretary/treasurer of the Board. He has completed the NRECA Credentialed Cooperative Director program and his Board Leadership certification. He is currently pursuing his Director Gold certification.
JOHN LIVINGS
VICE CHAIRMAN DISTRICT 1, SEAT 3
DISTRICT 2, SEAT 6
James Sikes has a bachelor’s degree in agricultural education from Auburn University. He is the owner of Sikes & Kohn’s Country Mall, a widely recognized business that was established in 1970 and has been a vital part of the community for more than 50 years. He has served on Dixie’s board since 1986 and is currently the vice chairman. He has previously served on the board of Cooperative Utility Services, LLC, and currently serves on the board of PowerSouth Energy Cooperative. He is chairman of the cooperative’s buildings and grounds committee, and serves on both the capital credits and wage and salary committees.
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John Livings is a practicing CPA, and is the founder and president of Livings, Lambert, Duffee & Mackin P.C. He is an active member of the Alabama Society of CPAs and the American Institute of CPAs. He is also president and owner of Designer Homes, Inc., as well as owner, manager and partner in Waugh Properties, LLC. He has served on Dixie’s board since 2006 and has held the position of secretary/treasurer, vice chairman, and chairman. He has also served on the board of the Alabama Rural Electric Association, Cooperative Utility Services, LLC, and PowerSouth Energy Cooperative. He is chairman of the capital credits committee, and serves on both the bylaw review/nominating committee and the scholarship committee. He has completed the NRECA Credentialed Cooperative Director, Board Leadership, and Director Gold programs.
ANDREW CALLAWAY CHAIRMAN DISTRICT 3, SEAT 7
Management Team
Andrew Callaway received his bachelor’s in agriculture and holds a doctor of veterinary medicine degree from Auburn University. Following graduation from Auburn, Callaway served as a captain in the U.S. Air Force where he assisted the Navy with the inspection of food going into the Atlantic nuclear submarine fleet. Callaway opened a veterinary clinic in Eufaula following his military career, and practiced there for 25 years. He later moved his practice to Hurtsboro when he returned to live in his homeplace in Roba. This is the same home his parents lived in when his father became a charter member of Dixie. Callaway continues to practice veterinary medicine today. He has held the position of secretary/ treasurer, vice chairman and is currently the chairman of Dixie’s board of trustees. He received his Board Leadership Certificate, is a Credentialed Cooperative Director, and completed the Director Gold Credential Program through NRECA.
GARY HARRISON President/CEO MIKE BARLOW Chief Financial Officer ERNIE FAULKNER Vice President, Member Services, Marketing & Economic Development BRANDON JOHNSON Vice President, Engineering & Operations
ALBERT PERRY
DISTRICT 3, SEAT 8
Albert Perry has served on Dixie’s board since 1996. He currently serves on the cooperative’s scholarship committee. He has completed the NRECA Credentialed Cooperative Director and Board Leadership programs. He owns an agricultural farming operation, and has been involved with the Alabama Cooperative Extension Agency for many years. He is also an active member of Hardaway AME Church. He volunteers many hours and leads fundraising efforts on an annual basis for numerous community organizations including Highway 51 Volunteer Fire Department and the Bullock County Sheriff Department’s Cops for Kids program. He also helps coordinate a quarterly county-wide cookout to instill leadership skills among the youth in the area.
BRENT MOFFETT Vice President, External Affairs & Special Projects MICHELLE WARD Vice President, Human Resources & Administrative Services
JIMMY ELLIS
DISTRICT 3, SEAT 9 Jimmy Ellis served as an active member of the United States Navy for three years, and continued his military service in reserve status for an additional 19 years as a training instructor. He later earned his State of Alabama Trade Teacher Certification and worked as a career tech instructor for the Alabama Department of Youth Services, eventually retiring with 28 years of service. While working as a career tech instructor, he also began serving as fire chief with the Town of Shorter Alabama Volunteer Fire Department, and he continues to hold that position today. He has served on Dixie’s board since 2015. He has completed the NRECA Credentialed Cooperative Director program and his Board Leadership certification. He is currently pursuing his Director Gold certification.
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New Solutions for New Challenges COVID-19 brought many new challenges, but these new challenges helped us think outside of our normal routines to offer creative ways to help our members. The concept of caring and concern for community is one of our core cooperative principles. It is what guides and motivates us to strive for our best in serving you, our members, everyday.
of the pandemic, we developed a new process utilizing an online form service to allow members to sign up for prepay from the comfort of their own home.
Updated Billing Processes and Procedures
In 2020, we made significant changes to our monthly billing processes and procedures. These changes allowed members more time to make a payment before late fees and disconnection of service for non-pay could occur. These changes shifted the due date to 15 days from the bill date and added an additional five days before late charges could be applied. We also discontinued collecting payments in the field. Overall, the new process allows at least 30 days for payment to be remitted before any action is taken to disconnect service.
CheckOut
We launched our CheckOut payment option before the start of the pandemic, not knowing just how convenient it would prove to be for members when we had to close our lobby doors. With the CheckOut system, members can make cash payments at local retail stores such as Dollar General, Family Dollar, and CVS. They simply enter their information on the CheckOut website and receive a barcode to scan at a retail location to make their payment. These retail stores offer more convenient locations and expanded hours of operation to better meet our members’ needs.
Communication Efforts
We always utilize a variety of communication tools to keep our members informed, but we recognized that these efforts were even more crucial during this time period. We continuously made social media posts, updated our website and sent email blasts notifying our members of changes to our process and educating them about various community resources available to assist them with any financial difficulties they were experiencing.
Electronic Application Options
While we have offered online applications for service for many years, several of our processes required members to come into our office, including establishing prepaid electric service. With many members staying home as a result
687
1,394
Agency Assistance Payments Received
Care Team Calls Answered
393
Care Agreements Executed
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2020 Facts & Figures
25,045
516,125,884
Homes and businesses served
Total kWh sold
2,079.05
624.89
Miles of overhead lines
Miles of underground lines
1,202.22
92
Full-time employees
Average monthly residential kWh usage
Who We Are MISSION
Dixie Electric Cooperative is committed to safely providing its memberowners with economical and reliable electric power and related services.
VISION
Dixie Electric Cooperative’s vision is to improve the quality of life in and around the communities we serve.
VALUES
Safety Integrity Member-Owner Oriented Efficiency Accountability Community Commitment
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Caring for Our Members and Community Changes to Normal Business Operations
Made up of our dedicated member service representatives, our CARE Team stepped up to listen to the individual needs of our members. Since COVID has impacted everyone in different ways, we understood the importance of creating a plan to cater to the needs of each individual.
When Governor Ivey declared a State of Emergency on March 13, 2020, we immediately stopped charging late fees, collecting payments in the field, and disconnecting services for nonpayment, all in an effort to help our members who were struggling financially due to job loss and layoffs, and to keep everyone healthy and safe. Our lobbies were also closed, but our drivethrus remained open throughout the pandemic.
CARE Plan
Our COVID-19 Arrangement & Relief Extension (CARE) Plan was designed to help members who had accrued outstanding balances on their accounts due to financial difficulties. By establishing a CARE Agreement, members were able to spread the arrears balance into 12 monthly installments on traditional billed accounts and allowed prepay members to take advantage of a debt recovery option with a 70/30 future energy to past due balance payment ratio. A total of 393 members executed CARE Agreements with the cooperative.
Community Resources
Our employees worked to stay abreast of any new programs and resources made available within the community to help members with their financial challenges. Member service representatives maintained lists of various agencies to refer members to for assistance. Letters and emails were also sent to members providing resource information. As a result of these efforts, almost 690 members received power bill assistance totaling approximately $235,000.
Community Assistance
Through careful planning and adherence to CDC guidelines, we were able to continue our partnership with WSFA last year to host 12’s Day of Giving at Renfroe’s Market to benefit the Montgomery Area Food Bank, Christmas Clearinghouse, and Toys for Tots. In 2020, 12’s Day of Giving generated over $48,000 in donations, 1,350 toys, and 11,000 pounds of food to help our neighbors in need.
CARE Team
Once it was determined that we could return to normal business operations in October 2020, we established a CARE Team to help members navigate this transition. Our CARE Team was the heartbeat of our overall CARE Plan taking almost 1,400 calls over a period of two months.
Navigating 2020 CheckOut, our newest free payment option, was launched offering members additional convenient payment locations.
The COVID-19 pandemic hit.
MAR
FEB
We stopped charging late fees, collecting in the field, and disconnecting for non-payment to support members during the uncertainty of the pandemic.
MAR Dixie sponsored eight high school juniors from our area to participate in Youth Tour.
FEB
In response to the pandemic, we closed our lobbies for the safety of our members and employees.
We educated members about community resources offering financial assistance during the COVID-19 pandemic.
MAR
MAR - JULY
8
335
7,320
7,963
1,068
performed
performed
padmount transformers inspected
inspected meters
pole inspections
pole changes
604
miles of right of way cleared
796
miles of right of way sprayed
System Maintenance & Reliability We understand that our members expect a reliable source of electricity. With many of our members working and educating their children from home due to COVID-19, reliability was even more crucial last year. In 2020, your power remained on 99.94 percent of the time. Each year, your cooperative works with PowerSouth Energy Cooperative, our power supplier, to develop load forecasts to ensure we have an adequate power supply to meet the growing electric demands on our system. Your cooperative has consistently remained one of the top five cooperatives among PowerSouth’s member systems in regards to projected load growth. Our engineering staff also works to develop long-range and four-year work plans.
The information contained in these plans helps staff determine where growth will take place, as well as the equipment and energy requirements necessary to meet the needs in those areas. Crews also inspect poles and equipment throughout the year to help maintain the integrity of the electric system. Your cooperative also has an extensive vegetation management program in place that includes the use of heavy-duty clearing and trimming equipment to remove large trees and growth followed by a spray that promotes the growth of green plants while eliminating wood stems and thick undergrowth. This process not only improves system reliability, but also improves the aesthetics of our rights of way.
We created The CARE Plan to help those in our area that were struggling financially.
We changed our monthly billing process to allow members more time to make payments.
We partnered with WSFA and Renfroe’s Market to safely host our annual 12’s Day of Giving, collecting over $48,000, 1,350 toys, and 11,000 pounds of food to help our neighbors in need.
AUG
SEPT
DEC
We communicated with members about our CARE Plan options and process.
We were able to successfully return to normal business operations.
SEPT
OCT
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Financials Balance Sheet as of December 31, 2020
ASSETS
Utility Plant Electric plant in service, at cost Construction work in progress Total utility plant Less accumulated provision for depreciation Net utility plant Other Assets and Investments Investments in associated organizations Investments in Cooperative Utility Services Other investments Non-utility property Total other assets and investments
2020
$ 145,998,406 543,708 146,542,114 33,609,856 112,932,258
24,930,474 1,778,257 15,502 1,365 26,725,598
Current Assets Cash 3,750,551 Temporary investments 6,733,997 Accounts receivable 4,983,656 Materials and supplies 1,164,957 Other current assets 68,048 Total current assets 16,701,209 Deferred Charges Total Assets
211,071 $ 156,570,136
NOTICE: The financial information provided is part of the financial statements for the year ended December 31, 2020, which contained an unmodified auditor’s opinion dated March 24, 2021. A copy of the financial statements is retained at the Cooperative’s office.
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LIABILITIES AND OTHER CREDITS
Equities Memberships Patronage capital Other equities Total equities
2020
$
106,397 63,057,676 2,649,607 65,813,680
Long-Term Debt
Mortgage notes payable Less: Current maturities Total long-term debt Current Liabilities Current maturities on long-term debt Accounts payable Consumer deposits Accrued liabilities Total current liabilities Deferred Credits Other Liabilities
71,596,808 2,842,448 68,754,360
2,842,448 4,155,700 4,501,793 5,183,326 16,683,267 121,253 5,197,576
Total Liabilities and Other Credits $ 156,570,136
Report of the Secretary-Treasurer
Distribution of Expense Dollar
The board of trustees of Dixie Electric Cooperative has examined the balance sheet and financial statements for Dixie Electric Cooperative for the fiscal year ending December 31, 2020. All subsidiary records and accounting procedures of the cooperative are kept in accordance with the Uniform System of Accounts as prescribed by the Rural Utilities Service. Your board of trustees reviews monthly statements. In turn, an independent audit has been performed by Gruenloh Hardy and Associates, P.C., Certified Public Accountants, on all cooperative financial records on a fiscal year basis as of December 31 for the preceding 12 months. Additional reviews are made periodically by the Rural Utilities Service for assuring compliance with required accounting procedures and mortgage requirements.
This graph provides a breakdown of our expenses by category and percentage. As you can see, the greatest expense incurred by your cooperative is purchased power. Power cost accounts for 60 percent of our expenses.
By Percentage
Kim Jackson Secretary-Treasurer
Statement of Operations
Financial Report
Revenue Electric Revenue Other Operating Revenue Total Revenue
Monies invested in system improvements and routine construction during the past year resulted in an increase in net utility plant of 4.3 percent. Kilowatt-hour sales decreased 3.6 percent from 2019, while annual growth in consumers was slightly higher in 2020, increasing by 1.8 percent. The decrease in kilowatt-hour sales can be attributed to a reduction in consumption at the onset of the COVID-19 pandemic and related lockdowns, as well as changes in weather patterns.
2020
$ 60,854,291 590,028 61,444,319
Expenses Cost of Purchased Power Operations & Maintenance Expense Consumer Accounts & Sales Expense Administrative & General Depreciation Tax Expense Interest Expense Total Cost of Electric Service
35,960,439 7,684,854 3,609,229 3,409,075 4,034,317 2,496,678 2,373,293 59,567,885
Operating Margins
1,876,434 252,152 817,214 181,422
Non Operating Margins Generation & Transmission Capital Credits Other Capital Credits
Patronage Capital
Purchased power, or wholesale power, is the single largest component of our rate. This expense comprises the cost of generating the electricity we provide to our member-owners (including generating fuel, capital expenses associated with constructing and operating power plants, and transmission costs to deliver energy from the power plants to our lines).
$
3,127,222
Power cost per kilowatt-hour sold decreased 6.2 percent in 2020, with wholesale power accounting for 60 percent of our total cost of service – an uncontrollable yet essential expense.
NOTICE: The financial information provided is part of the financial statements for the year ended December 31, 2020, which contained an unmodified auditor’s opinion dated March 24, 2021. A copy of the financial statements is retained at the Cooperative’s office.
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Total revenue for 2020 was $61,444,319. Operating margins were $1,876,434, or 3.1 percent of total revenue.
D I X I E E LE CTR IC COOPER ATIVE
9100 ATLANTA HIGHWAY MONTGOMERY, ALABAMA 36117 WWW.DIXIE.COOP 1.888.349.4332
