EXECUTIVE REPORT
R. GARY HARRISON PRESIDENT/CEO
Your COOPERATIVE is COMMITTED to You
When you search the Internet for the definition of commitment, you get many versions depending on the source.
COMMITMENT:
•An agreement or promise to do something in the future.
An agreement or promise to do something in the future.
•The state or quality of being dedicated to a cause, activity, etc.
The state or quality of being dedicated to a cause, activity, etc.
•A promise to give yourself, your money, your time, etc. to support something.
A promise to give yourself, your money, your time, etc. to support something.
•A willingness to give your time and energy to something that you believe in.
A willingness to give your time and energy to something that you believe in.
•Adherence to something to which
Adherence to something to which one is bound by a pledge or duty.
While all these definitions apply to our commitment to our members, a quote from Abraham Lincoln speaks volumes about what commitment truly means. He said, “COMMITMENT is what transforms a PROMISE into REALITY. It is the WORDS that speak boldly of your intentions. And the ACTIONS which speak louder than the words.”
Someone can speak of commitment all day long, but at the end of the day what matters is their dedication, determination and willingness
to execute the actions necessary to fulfill that commitment. The board and employees of Dixie Electric Cooperative put their commitment to our members into action every day. Whether they are meeting to review our financial stability, speaking to new members who are establishing service, addressing questions about an account, installing service to a new subdivision, or coordinating a community event to benefit a local charity, our team is always in action.
Our commitment to our members began in 1938 with our founding board members and employees who made the decision to adhere to this core value, and it continues still today. As you read through our 2023 Annual Report, you will find many examples of our continued commitment to you, our members. This same commitment will carry on for many years to come as our unceasing pledge to our members.
At Dixie, we are committed to you!
Dixie Electric Cooperative BOARD OF TRUSTEES
THOMAS ELLIS
DISTRICT 1, SEAT 1
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. He has completed the NRECA Credentialed Cooperative Director program, Board Leadership certification, and Director Gold certification.
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
DISTRICT 1, SEAT 3
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
DISTRICT 2, SEAT 4
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. Prior to her roles with the BCA, she served as Regional President for Liberty Bank & Trust. 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, YMCA, Montgomery Committee of 100, Board of Controls Committee of 100 and Synovus Bank. She currently serves on Dixie’s audit & ethics, capital credits, and wage & salary committees, and has completed the NRECA Credentialed Cooperative Director program.
KIM JACKSON VICE CHAIRMAN
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 Vice Chairman of the Board. He has completed the NRECA Credentialed Cooperative Director program, Board Leadership certification, and Director Gold certification.
JOHN LIVINGS
DISTRICT 2, SEAT 6
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 CHAIRMAN
DISTRICT 3, SEAT 7
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 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. He practiced veterinary medicine for 52 years and recently retired. 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.
ALBERT PERRY
DISTRICT 3, SEAT 8
Albert Perry has served on Dixie’s board since 1996. 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 renewables and rates committee and the scholarship committee. He has completed the NRECA Credentialed Cooperative Director program and the Board Leadership certification.
JIMMY ELLIS SECRETARY/TREASURER
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, 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.
GARY HARRISON President/CEO
MIKE BARLOW Chief Financial Officer
ERNIE FAULKNER Vice President, Member Services, Marketing & Economic Development
BRANDON JOHNSON Vice President, Engineering & Operations
BRENT MOFFETT Vice President, External Affairs & Special Projects
KAMIKA REEVES Vice President, Human Resources & Administrative Services
OUR COMMITMENT TO YOU
At Dixie Electric Cooperative, our commitment to you, our valued members, is at the heart of everything we do. We are dedicated to providing reliable and affordable power while continuously improving our services to meet your needs. We prioritize safety, integrity, and commitment to community, ensuring that we not only power your homes but also contribute to the growth and well-being of our entire community. Your trust in us fuels our mission to serve you better every day.
COMMITMENT TO EDUCATION
At your cooperative, we understand that the youth of today are the leaders of tomorrow. The students we engage with now could become our future board members, employees, and valued members. This is why we dedicate significant time and resources to programs that support their growth. Through educational initiatives, financial opportunities, and specialized training for educators, we are committed to empowering future generations and fostering a sustainable and vibrant cooperative community.
SCHOLARSHIP RECOGNITION
We recognize the vital role education plays in shaping the future. In 2023, we proudly awarded $45,000 in scholarships to 14 local students. Whether they choose to attend a trade school, a two-year program, or a fouryear university, these funds will help them pursue their educational goals and build brighter futures.
EMPOWER WORKSHOP
We are proud to have sponsored 16 educators from our service area to attend PowerSouth Energy Cooperative’s EMPOWER Energy Education Workshop. This workshop equips educators with valuable training and resources to enhance STEM curriculum and conduct engaging experiments in the classroom, ultimately benefiting their students and fostering a stronger educational environment.
YOUTH TOUR
The Rural Electric Cooperative Youth Tour program provides high school juniors with a unique opportunity to explore the cooperative business model, gain insight into the political process, and tour significant sites in both our state capital and Washington, D.C. In 2023, we proudly sponsored eight students from our area
for the Montgomery Youth Tour. Of those, four advanced to the Washington Youth Tour, a week-long event in D.C. Participants visited iconic landmarks such as the Lincoln Memorial, the Franklin Delano Roosevelt Memorial, the Vietnam War Memorial, and the WWII Memorial and many more. Delegates also engaged with congressional leaders, enriching their understanding of our nation’s history and governance.
COMMITMENT TO SECURITY
Technology plays a significant role in our daily operations, which means we must be vigilant when it comes to cybersecurity.
In 2023,your cooperative partnered with Critical Path Security for monthly managed security, including vulnerability scans, and replaced firewalls at both the Montgomery and Union Springs office. We also migrated to a new cellular service that is a nationwide wireless broadband network for first responders deployed through a public-private partnership between the federal government and AT&T.
COMMITMENT TO COOPERATION
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. Not only has there been no rate increase for the past 23 months, but in 2023 SBCWA applied for and obtained $2,700,000 in grants to accompany a $645,000 loan to construct and install 4 capital projects.
Dixie Electric Cooperative continued building relationships with and encouraging broadband companies to expand coverage in the cooperative’s service territory. In 2023, these existing Internet providers made significant progress to help meet the growing demand for reliable connectivity among members.
The year 2023 also marked the 19th 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.
By managing SBCWA and partnering with CUS, Dixie effectively shares costs, leading to significant savings for all our members.
COMMITMENT TO RELIABILITY
System integrity is essential to delivering the reliable service you expect from your cooperative. We dedicate significant time to planning for your future energy needs by thoroughly evaluating our current system, anticipating future growth, and collaborating closely with our power supplier, PowerSouth Energy Cooperative. Together, we ensure that they have the generation capacity needed to meet the future demands of our system, so you can count on us to keep your power on.
As part of our commitment to reliability, your cooperative conducts thorough inspections of padmount transformers and poles. When issues are identified, work orders are generated, and replacements are promptly assigned to our crews. We also inspect meters to ensure they are operating correctly. In 2023, we inspected 335 padmount transformers, 9,533 poles, and 1,045 meters. As a result of these inspections, we replaced 791 poles, ensuring the continued strength and dependability of our system.
Your cooperative also maintains an extensive vegetation management program designed to protect power lines from large trees and overgrown vegetation. This program combines heavy-duty clearing and trimming equipment with herbicide applications to enhance the aesthetics of the right of way. In 2023, our crews cleared and trimmed 657 miles and treated 423 miles of right of way. Our current pace typically allows us to maintain right of way across our entire system on a five-year cycle, ensuring continued reliability and safety.
While our goal is to provide reliable electricity 100% of the time, occasional outages are an unavoidable reality that all utilities face. Each year, we thoroughly analyze our outage data to identify opportunities for improvement, focusing on maintaining and upgrading our equipment. However, some outages are caused by factors beyond our control. In those instances, our crews are committed to restoring power safely and as quickly as possible.
2023 FACTS & FIGURES
564,071,350
2,085
9,533
26,514
791
1,150
1,045
COMMITMENT TO ACCOUNTABILITY
Dixie Electric Cooperative received a clean financial audit with an unmodified opinion for year ending 2023 performed by Gruenloh Hardy & Associates, P.C. The financial reports for the 2023 audit period can be found on the following pages. We also received a satisfactory internal audit completed by Jackson Thornton in the areas of purchasing, inventory, accounts payable, cash disbursements and financial reporting for the year of 2023.
We completed our annual cost of service study in September 2023. 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.
Your cooperative’s financial ratios and parameters were in good standing in 2023, which allowed us to submit a loan application to Rural Utilities Service (RUS). The loan was subsequently approved by RUS.
Our energy auditor was also busy assisting members who had questions about any fluctuations in their energy use. During 2023, we performed a total of 121 in-person energy audits. Members were also referred to our free online usage monitoring service to receive daily usage alerts to help them quickly make adjustments when their usage escalated.
With the rise of electric vehicles (EVs) in our service area, we continue to collaborate with PowerSouth to study the impact of EV chargers on our overall system demand. As part of these efforts, we’ve partnered with PowerSouth to offer a one-time rebate for members who register their electric vehicles with the cooperative. Many EV owners have already taken advantage of this rebate, with 44 rebated in 2023 and nearly 100 currently participating in our EV time of use rate, which provides an incentive for charging during off-peak hours. Off-peak charging benefits all of our members by reducing overall demand on our system during peak times, which, in turn, helps lower our wholesale power costs.
BALANCE SHEET
As of December 31, 2023
LIABILITIES AND OTHER CREDITS
Long-Term Debt
The financial information provided is part of the financial statements for the year ended December 31, 2023, which contained an unmodified auditor’s opinion. A copy of the financial statements is retained at the Cooperative’s office.
DISTRIBUTION OF EXPENSE DOLLAR
By Percentage
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 62 percent of our expenses.
STATEMENT OF OPERATIONS
NOTICE: The financial information provided is part of the financial statements for the year ended December 31, 2023, which contained an unmodified auditor’s opinion. A copy of the financial statements is retained at the Cooperative’s office.
REPORT OF THE SECRETARY-TREASURER
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, 2023. 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-Treasurer
FINANCIAL REPORT
Monies invested in system improvements and routine construction during the past year resulted in an increase in net utility plant of 5.4 percent. Kilowatt-hour sales decreased 1.7 percent from 2022, while annual growth in consumers was slightly higher in 2023, increasing by 2.0 percent. The decrease in kilowatt-hour sales can be attributed to changes in weather patterns.
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 1.7 percent in 2023, with wholesale power accounting for 62 percent of our total cost of service – an uncontrollable yet essential expense.
Total revenue for 2023 was $78,631,842. Operating margins were $3,798,022, or 4.8 percent of total revenue.