Steve Jobs, co-founder and former Chairman and CEO of Apple, once said, “Great things in business are never done by one person. They’re done by a team of people.” While Jobs was 100 percent correct that it takes a team effort, I think it is important to recognize that success can only be achieved if that team is dedicated to a common purpose. Without dedication, a team is destined to fail and will be unable to achieve their goals and mission.
If it weren’t for a dedicated team of individuals, Dixie Electric Cooperative would not be in existence today. In fact, your cooperative was founded in 1938 by a group of individuals who were dedicated to making life better for their community by bringing electricity to our rural service area. These community members went door-to-door encouraging their friends and neighbors to sign up for power with the cooperative which was often referred to in those days as the REA (Rural Electric Administration).
These founding members set forth on a mission to safely provide reliable electric service at an economical cost. They did so by organizing the cooperative based on seven cooperative principles:
1. Open and Voluntary Membership
2. Democratic Member Control
3. Members’ Economic Participation
4. Autonomy and Independence
5. Education, Training, and Information
6. Cooperation Among Cooperatives
7. Concern for Community
Just like those founding members, your cooperative has a dedicated board and team of employees whose purpose is to execute the cooperative’s mission, as well as uphold these seven cooperative principles. Throughout our annual report, you will find valuable information correlating to each of these principles and will discover examples of our dedication and commitment to you, our members.
With each passing year, we want to remind you that your cooperative is always looking out for you.
R. Gary Harrison President/CEOThomas 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. He has completed the NRECA Credentialed Cooperative Director program, Board Leadership certification, and Director Gold certification.
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 has completed the NRECA Credentialed Cooperative Director program, Board Leadership certification, and Director Gold certification.
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 53 years. He has served on Dixie’s board since 1986 and has held the position of secretary/treasurer and vice chairman. He has previously served on the board of Cooperative Utility Services, LLC and PowerSouth Energy Cooperative. He has served as chairman of the cooperative’s buildings and grounds committee, and served on both the capital credits and wage and salary committees.
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 President and CEO of the Business Council of Alabama. She is also 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. Duncan was named a Yellowhammer 2022 Woman of Impact for her influential role and contribution to business and the community across Alabama. She has completed the NRECA Credentialed Cooperative Director program.
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 Vice Chairman of the Board. He has completed the NRECA Credentialed Cooperative Director program, Board Leadership certification, and Director Gold certification.
John Livings is a practicing CPA, and is the founder and president of Livings, Lankford, Lambert & Co. CPAs. 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 the governance, wage and salary, renewables and rates, and scholarship committees. He has completed the NRECA Credentialed Cooperative Director program, Board Leadership certification, and Director Gold certification.
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 has completed the NRECA Credentialed Cooperative Director program, Board Leadership certification, and Director Gold certification.
Albert Perry has served on Dixie’s board since 1996. He currently serves on the cooperative’s scholarship committee. 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. He serves on both the renewable and rates committee and the scholarship committee. He has completed the NRECA Credentialed Cooperative Director program and the Board Leadership certification.
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, a position from which he recently retired. 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, Board Leadership certification, and Director Gold certification.
Our employees work hard to fulfill our mission, but the value of our work can only truly be measured in the satisfaction of our cooperative members. In 2022, we conducted a Residential Member Satisfaction Survey to gather feedback from our members to determine your satisfaction level in a variety of areas of our business. As part of our survey efforts, we asked questions that are key indicators of our overall performance. The results of these questions were then tabulated using industry benchmarking standards in order to provide us with both a Cooperative Attitude and Performance Score (CAPS) and an American Consumer Satisfaction Index (ACSI) Score.
CAPS is an industry-specific benchmark developed by Inside Information, Inc. specifically for electric cooperatives. The model is based on responses to questions related to whether our members consider us to be a trustworthy organization, if they believe we truly care about our members, and if we are a well-managed organization. Your cooperative’s CAPS score in 2022 was 91. This is higher than the average scores on both a regional and national level.
Developed by the University of Michigan, the ACSI is the only uniform, national, crossindustry measure of satisfaction with the quality of goods and services available in the United States. This model is based on responses to questions related to overall satisfaction, exceeding member expectations, being an ideal utility, and whether the member would choose the cooperative again. By utilizing the ACSI, we are able to benchmark our results against top companies in America, including other electric utilities. In 2022, your cooperative received an ACSI score of 88. The chart below shows how we are ranked in comparison to top American companies. As you can see, our satisfaction score was higher than Apple, Southwest Airlines, Lowe’s, and Wal-Mart, as well as the average scores of other Touchstone Energy® cooperatives, investor-owned utilities, and municipal utilities.
In 2022, our energy auditor was busy assisting members who had questions about fluctuations in their energy use. Utilizing our automated meter reading system, we were able to pull usage data to help members pinpoint high usage periods throughout the day and narrow down the cause of their fluctuations. Our energy auditor performed a total of 157 residential and five commercial in-person energy audits. This involved using our infrared camera to take temperature readings through the business or home and evaluating HVAC systems and insulation quality to make energy efficiency recommendations. Members also continued to take advantage of our free online usage monitoring service to receive daily usage alerts to help them quickly make adjustments when their usage escalated.
We understand that communication with our members is also key to your satisfaction. We utilize a variety of resources to stay in touch with our members. Some of those resources include email, direct mail, Alabama Living magazine, a monthly bill insert, and social media. Our website also offers members 24/7 access to valuable cooperative information and a link to our customer service portal. Through our customer service portal, members can access their accounts, make payments, view bills, analyze billing history, and update their contact information. Members can also gain access to this same information utilizing our convenient mobile app.
We have two office locations available to conveniently serve our members, along with a highly trained staff of member service representatives who are available to assist members in person and over the telephone. These representatives help with establishing new service, answering billing questions, and signing members up for prepaid service. They also take member payments, assist with service order requests, manage our outage management system, and dispatch work to our crews. In 2022, your cooperative received a total of 439,598 payments, 73,524 of which were handled by our representatives. The remainder were made utilizing one of our convenient electronic payment methods. The chart below provides a breakdown of our payment methods by percentage.
We understand that our members expect a reliable supply of electricity - you flip a switch, and it’s there. In 2022, our system reliability was 99.97 percent. While we would prefer that you have electricity 100 percent of the time, outages are unfortunately something that all utilities experience at some point in time. We analyze our outage data each year in an effort to improve any areas we can by maintaining and upgrading equipment; however, there are some causes that are completely beyond our control. In those instances, our crews work diligently to safely restore power as quickly as possible.
In 2022, your cooperative performed line upgrades along Highway 82 in Bullock County. Additional plans were developed for upgrades in Bullock, Lee, Macon and Montgomery counties, with implementation scheduled for 2023 based on manufacturer timelines for sourcing the required materials.
As part of our on-going maintenance efforts, your cooperative performs padmount transformer and pole inspections. Upon inspection, work orders are created for any poles and transformers that require replacement, and the work is assigned to our crews. We also inspect meters to ensure they are functioning properly. In 2022, we inspected 120 padmount transformers, 5,902 poles and 8,077 meters. As a results of the inspections, we also replaced 913 poles.
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 that jeopardize power lines, paired with a herbicide application process to improve the aesthetics of the right of way. Through this program, crews cleared and trimmed 365 miles and treated 770 miles of right of way in 2022. Our current pace typically allows us to maintain right of way along our entire system on a five-year cycle.
Another aspect of system reliability that we monitor closely is our peak demand. Each year, we work with PowerSouth Energy Cooperative, our power supplier, to develop load forecasts to ensure we have an adequate power supply throughout our electric system now and well into the future. This involves a detailed analysis of historical data, as well as projected growth trends for our area.
With the upsurge of electric vehicles in our service area, we are working closely with PowerSouth to conduct studies designed to analyze the impact EV chargers have on our overall system demand. As part of this effort, we worked in conjunction with PowerSouth to offer a one time rebate to members who registered their electric vehicles with the cooperative. Many of our EV owners have already taken advantage of the rebate along with our EV time of use rate that offers an incentive for charging during off-peak times. Off-peak charging is beneficial to all of our members because it reduces overall demand on our system during peak times, which in turn reduces our wholesale purchased power costs. We also introduced a traditional time of use rate for those members who do not have an electric vehicle, but still wish to take advantage of a reduced off-peak rate.
The residential housing market continued to experience significant growth in our service area. In 2022, engineers worked on development of more than 1,000 residential home lots as well as 218 apartments.
We also experienced commercial and industrial growth during 2022. Numerous restaurants, retail establishments, hotels and business offices were constructed. The year 2022 also brought the development of two industrial parks and the expansion of an industrial facility for one of our members.
Technology plays a significant role in our daily operations, which means we must be vigilant when it comes to cybersecurity.
In 2022, your cooperative engaged an external security firm to conduct an external and internal penetration assessment. The assessment included a complete external and internal review of our public-facing assets to determine if any vulnerabilities existed that could lead to a breach. They also evaluated system configurations to determine if any changes needed to be made to strengthen the overall security posture.
The objective of the assessment was to identify and safely exploit vulnerabilities leading to critical infrastructure compromise without service interruption, destruction of facilities, or compromise of sensitive data. The overview of both our external and internal findings showed there were no issues of any significance to report.
Dixie Electric Cooperative received a clean financial audit with an unmodified opinion for year ending 2022 performed by Gruenloh Hardy & Associates, P.C. The financial reports for the 2022 audit period can be found on the following pages.
We completed our annual cost of service study in September 2022. This study involves us looking at various aspects of our business operation to ensure our fee and rate structure are allowing us to cover our actual cost of conducting business.
Our accounting department also completed a ten-year financial forecast in 2022. Your cooperative’s financial ratios and parameters were in good standing in 2022, which allowed us to submit a loan application to Rural Utilities Service (RUS). The loan was subsequently approved by RUS.
Your co-op continues to manage the South Bullock County Water Authority (SBCWA) in an effort to improve the quality of life for our members in Bullock County. During 2022, SBCWA received grant and loan funding to perform four system projects. The projects consist of the construction of a 200,000 gallon elevated tank; the construction of a six inch water line to tie the High Ridge area to the Simsville/Hector area and to create a back up source from Hall’s Crossroad; the upgrade of lines in the Peachburg area; and the refurbishment of the Aberfoil tank.
The year 2022 also marked the 18th year of Dixie’s partnership with Central Alabama Electric Cooperative, operating as Cooperative Utility Services, LLC (CUS). CUS operates and maintains the electric facilities on Maxwell/ Gunter Air Force Base in Montgomery.
Endeavors such as our management of SBCWA and partnership in CUS allow Dixie to share costs, which results in savings to all of our members.
Your cooperative conducted a feasibility study to determine the broadband needs of members in our service area, while also considering the existing resources available to our members. Dixie Electric Cooperative made the determination that the cooperative would not enter the broadband business, but would instead nurture relationships with existing broadband providers to encourage them to expand their systems in order to reach all of our service territory. In 2022, these existing Internet providers made significant progress in their expansion within our service territory.
As of December 31, 2022
NOTICE:
The financial information provided is part of the financial statements for the year ended December 31, 2022, which contained an unmodified auditor’s opinion. A copy of the financial statements is retained at the Cooperative’s office.
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 64 percent of our expenses.
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, 2022. 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.
Jimmy Ellis Secretary-TreasurerMonies invested in system improvements and routine construction during the past year resulted in an increase in net utility plant of 2.2 percent. Kilowatt-hour sales increased 6.5 percent from 2021, while annual growth in consumers was slightly higher in 2022, increasing by 1.6 percent. The increase in kilowatt-hour sales can be attributed to changes in weather patterns and growth in the number of member owners served.
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).
Power cost per kilowatt-hour sold increased 6.0 percent in 2022, with wholesale power accounting for 64 percent of our total cost of service – an uncontrollable yet essential expense.
Total revenue for 2022 was $74,053,371. Operating margins were $1,060,039, or 1.4 percent of total revenue.
