2020 ANNUAL REPORT
Providing Electricity that is Safe, Reliable and Affordable RURAL ELECTRIC
SAFETY ACHIEVEMENT PROGRAM
99.9%
Creating a culture of safety
Safety First is one of Central’s core values. The co-op participates in the Rural Electric Safety Achievement Program (RESAP) which evaluates a co-op’s practices and ensures safety is achieved through a strong safety culture.
AVG. RESIDENTIAL COST PER KWH
Central has an Average System Availability Index (ASAI) of 99.9%. This measures the uptime a customer experiences.
Central measures reliability using various metrics. Through preventive maintenance, Central works to ensure members enjoy 99.9% reliable service through all weather conditions.
Central 9.56¢ Oklahoma 10.21¢ United States 13.01¢ 2019 Data https://www.eia.gov/electricity/sales_revenue_price/
Central’s rates are affordable and in line with state and national averages.
SEVEN COOPERATIVE PRINCIPLES
Central Rural Electric Cooperative, like all member-owned cooperatives, adheres to a set of seven cooperative principles that guide everything the cooperative does. The principles, highlighted in this annual report, are reflected in each decision made at Central.
Membership in a cooperative is open to all persons who can reasonably use its services and stand willing to accept the responsibilities of membership, regardless of race, religion, gender or economic circumstances.
We are Here to Serve You Central is governed by a seven-member board of trustees. The board of trustees hires a CEO who oversees a workforce of 78 employees. Each day, employees and the trustees work to serve you, the membership. 41% of our employees are also members of the cooperative.
Seven Trustees
78 Employees
22,540 22,540 Meters
2
Education and training for members, elected trustees, management and employees help them effectively contribute to the development of their cooperative.
By working together through local, national, regional and international structures, cooperatives improve services, bolster local economies, and deal more effectively with social and community needs.
How the Average Household Uses Electricity The latest data from the U.S. Energy Information Administration shows the combined use of clothes washers and dryers, computers, dishwashers, small appliances and other electrical equipment (noted as “all other uses” ) accounts for nearly 40% of electricity consumption in American homes.
15.8% Space Cooling 39.0% All other uses
2
12.1% Water Heating 16.3% Space Heating 1
4.2%
TVs & related equipment
7.4%
Refrigerators & Freezers
5.2% Lighting Source: EIA, Annual Energy Outlook 2020
1 Includes consumption for heat and operating furnace fans and boiler pumps. 2 Includes miscellaneous appliances, clothes washers, dryers, computers, stoves, dishwashers, etc.
FIBER AND ICE
OPPORTUNITIES DURING 2020 The year 2020 was truly a year like no other. The pandemic forced us to redefine normal and brought sweeping changes across the world as basic human interactions were altered. It was then that the critical importance of having high-speed connectivity became obvious. Unfortunately, this also highlighted the disparity of the simple availability of a quality-of-life service between rural and urban. Albert Einstein once said, “In the middle of a difficulty lies opportunity.” That’s where we found ourselves during the past year… in the middle of great opportunity. While the difficulties of convening in large groups during the pandemic may have caused our annual meeting format to change, it also created opportunities to engage with a larger portion of the membership. Multiple meeting locations made the meeting more convenient, and as a result, we saw increased participation in the democratic process of the cooperative. We also found an opportunity to prepare Central for the future by approving to move forward with a system-wide fiber network. This network will build the foundation needed to prepare the cooperative for the future. Not only will this opportunity benefit the electric grid, but also people in Central’s service area by allowing a subsidiary, Centranet, to offer fiber services. The pandemic exposed the need for highspeed internet access across the state as several Oklahomans were forced to work and learn from home. This fact drove us to check the membership’s pulse on Central
pursuing access to a system-wide fiber network for the membership, and the results were overwhelmingly in favor. Construction began in October 2020, just before a rare fall ice storm hit our system. This ice storm impacted our entire service area, and we were given the opportunity to showcase one of our cooperative principles – Cooperation Among Cooperatives - as cooperatives from four different states stepped up to help us restore power to nearly two-thirds of our system. And we cannot forget about the personal difficulties many of our neighbors faced as several were out of work, had hours cut or searched for new jobs. Once again, this presented an opportunity for the cooperative spirit to shine as we saw your Operation Round Up contributions go to those in need. Those small contributions made a difference in the lives of many and is truly at the heart of what makes our communities and cooperative strong. There will be a lot for which 2020 is remembered. For us, it will definitely be remembered as a year filled with opportunities that culminated with Fiber and Ice.
Carol Dvorak, Board President
Hunter Robinson, CEO
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$1.8 Million
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control as well as their unique identity.
20 20
$1.2 Million 20 19
20 18 $740,000
$1.2 Million 20 17
20 16 $700,000
Capital Credit Retirement
Central is a member-owned, not-forprofit electric cooperative. Being notfor-profit, any margins (profits made after expenses are paid) are returned to the members in the form of capital credits. As shown in the chart, Central has returned more than $5.6 million in patronage capital back to you, our member-consumers, over the past five years. Capital credits are just one of the many benefits of being a member of Central.
Equity
49%
Equity measures the extent to which the cooperative has financed plant and other assets with its own funds rather than outside sources. Reported as a percentage, the calculation is Capital Equity divided by Total Assets.
Secretary/Treasurer Report Financial integrity is of the highest importance to Central’s board of trustees. Each month, the board oversees the cooperative’s financial position and ensures the finances are aligned with the cooperative’s financial plan, as well as the mission and vision of the cooperative. This due diligence is crucial, and is our responsibility to you - the membership. Central’s budgeting process, policies and procedures ensure effective cost controls are in place to make certain your funds are properly utilized and accounted for. We are committed not only to providing reliable energy at a reasonable cost to today’s members, but also to ensuring that a well-maintained
operations & maintenance
costS
61
purchased power
4
Our commitment to doing business with integrity is one quality that contributes to Central being among the lowest cost providers in the state and nation. Central’s 2020 financial records are audited by the certified public accounting firm of Bolinger, Segars, Gilbert & Moss, L.L.P. A summary of the financial report can be found on page 5.
Bill Davis, Secretary/Treasurer
Total Cost of Service
13fixed 26%
and financially-stable organization exists to serve your needs in the future.
Central spent $54 million to provide power and services to its members in 2020. $33 million (61%) was used to purchase the power used by our members. $14 million (26%) was used for operations and maintenance of the electric system and general plant. $7 million (13%) was used for fixed costs such as taxes, depreciation, and amortization and debt interest.
Financial Summary FOR YEARS ENDING DECEMBER 31, 2020 AND 2019 OPERATING REVENUE PURCHASED POWER DISTRIBUTION EXPENSE - OPERATION DISTRIBUTION EXPENSE - MAINTENANCE CONSUMER ACCOUNTS, SALES & INFO. EXP. ADMINISTRATIVE & GENERAL EXPENSE DEPRECIATION & AMORTIZATION TAXES INTEREST ON LONG-TERM DEBT OTHER INTEREST & DEDUCTIONS TOTAL OPERATING EXPENSES OPERATING MARGIN OTHER MARGINS & EQUITY NET MARGIN
Assets NET UTILITY PLANT OTHER PROPERTY & INVESTMENTS CURRENT ASSETS OTHER ACCRUED ASSETS TOTAL ASSETS
2020 $55,754,783 $32,991,188 $4,324,907 $4,567,737 $1,770,324 $3,205,581 $5,314,731 $68,912 $1,589,299 $2,385 $53,835,464 $1,919,319 $2,776,914 $4,686,223
2019 $58,463,042 $35,550,729 $4,472,220 $4,116,000 $1,926,223 $3,902,388 $5,302,424 $75,597 $1,547,759 $147,189 $57,040,529 $1,422,513 $3,204,094 $4,626,607
2020 $103,236,597 $36,288,492 $29,133,397 $866,132 $169,524,618
2019 $99,827,654 $34,479,092 $24,317,404 $1,859,411 $160,483,561
2020 $83,073,224 $64,979,961 $8,285,187 $13,186,246 $169,524,618
2019 $80,451,045 $57,501,325 $7,725,474 $14,805,717 $160,483,561
Liabilities and Equity CAPITAL EQUITY LONG-TERM DEBT CURRENT LIABILITIES OTHER LONG-TERM LIABILITIES TOTAL LIABILITIES & EQUITY
System Stats Total Assets Total Meters Overhead Miles of Line Substations Total Revenues Peak Demand Residential Membership Percentage Commercial Membership Percentage Industrial Membership Percentage
$169.5 million 22,540 4,417 22 $55.6 million 115 MW 62% 36% 2%
Members contribute equitably to the capital of their cooperative. Part of that capital remains the common property of the cooperative. Members allocate surpluses for any or all of the following purposes: developing the cooperative, setting up reserves, benefiting members in proportion to their transactions with the cooperative and supporting other activities approved by the membership.
Density Central has five meters per mile of line compared to 48 meters per mile of line average for public utilities such as municipals, and 34 meters per mile of line average for investorowned utilities like OG&E and PSO.
Energy Mix
Through Central's power provider, Associated Electric Cooperative Inc., we are able to provide members with a diverse portfolio of energy. Central members receive 46% of electricity from coal-powered plants, 28% from natural gas powered plants, 16% from wind farms, 9% from hydro-powered dams, and purchases 1%. Associated’s energy mix allows Central to provide clean, affordable, and reliable power to our members.
5
STRIKING WHILE THE FIBER IS HOT AMIDST PANDEMIC, BOARD APPROVES FIBER PROJECT
More than 10 years ago, Central identified the need to increase system reliability and support connectivity for its rural membership. Unfortunately, efforts to prepare the grid for the future and support rural connectivity were not reaching everyone.
Mainline fiber construction began in October in the Stroud, Perkins and Stillwater areas, and the first of 18 fiber huts have been installed. Fiber huts are equivalent to substations on an electrical grid, and are the main switchboards for a fiber network.
This was all too apparent when Central learned that one school district in its service area estimated that 40 percent of its students lacked access to high-speed internet. The reality of the disparate situation Oklahoma students are facing was confirmed when the State Board of Education shared that approximately 25 percent of Oklahoma public-school children lack access to home internet.
Learn more about the project at MyCentral.coop/fiber.
Armed with this new information, Central realized that it had to find a way to help. Central quickly began to look across the country to see how other cooperatives were helping support the connectivity needs of their memberships. Research showed that many cooperatives were helping bridge the digital divide by supporting fiber-to-the-home (FTTH) projects across their entire service area. In March 2020 Central sent a survey seeking feedback from a random selection of its members on their interest in fiber internet. The results were overwhelmingly positive: 97 percent supported moving forward with fiber.
A technician splices a fiber connection at the Ramsey fiber hut.
“Knowing you can help so many people improve their quality of life is a big responsibility that cannot be ignored,” said Hunter Robinson, Central CEO. “We knew fiber was the answer to accomplishing two major goals of the cooperative: high system reliability and improved quality of life for the membership.” Today, all of Central’s 22 substations have fiber communications, but that’s where the fiber pieces of the electric grid stops. A full fiber network will provide significant advantages and positioning of the cooperative for the future demands of the grid. “Our future electric system reliability depends on our ability to communicate with downline devices – understanding where the faults are and predicting outages,” Robinson said. “Expanding fiber communications throughout our entire service area will increase connectivity in the field, as well as allow for more automation capabilities, which will make us more efficient and benefit our members.”
6
A fiber crew lashes fiber to the strand. Central’s fiber will run below the power lines in the space reserved for communications on our electrical system.
A crane lifts a fiber hut into place at the Ramsey substation near Perkins.
97% of members surveyed support Central offering high speed internet; of those who do not support, half say they need more information before determining support.
Survey Results ➤ 97% view high speed internet as important or absolutely necessary to quality of life in the area ➤ 83% of the members surveyed currently have internet service ➤ Of those who do not have internet service, reasons for not subscribing are expense (37%), followed by availability (29%) and reliability (27%); 8% indicate they do not want/need internet service ➤ Most common internet connections are land-based wireless at 37% and satellite internet at 31% * Results of this survey have a margin of error of +/-5.4% at a 95% degree of probability. For any given statistic, there is a 95% chance that the result does not vary by more than 5.4% in the actual total population.
FIBER CONSTRUCTION MILESTONES
MILESTONE 2
HUT HUT
MILESTONE 1
MILESTONE 4
WHO’S THERE?
HANG IN THERE
CONSTRUCTION
TEST 1, 2
MILESTONE 5
MILESTONE 1
DROP TIME
MILESTONE 3
POLE TO POLE
MILESTONE 3
MILESTONE 6
FIBER IMPLEMENTATION MILESTONES
IN THE ZONE
SURF’S UP MILESTONE 2
The timeline shows the steps during the fiber construction process. The entire fiber project is expected to take 5-7 years to complete.
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Foundation Giving Hits $1 Million MAKING A DIFFERENCE – A FEW PENNIES AT A TIME
While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.
In 2020, the Central Community Foundation achieved a milestone of giving back more than $1 million to our communities, and this couldn’t have been achieved without your generous support! Central members who participate in Operation Round Up give a few cents each month, but that small pocket change makes a big impact in Central’s seven-county service area. So much so, that over the past 15 years, we have been able to give back more than $1 million! $420,000+ to schools, 4-H clubs & educational programs $186,000+ for health care initiatives $168,000+ in disaster relief grants $159,000+ to community-wide projects & food banks $116,000+ helped individuals with personal needs You’re the true hero! Without your participation in Operation Round Up, these donations wouldn’t be possible. Thank you!
2020 Grant Recipients
Our Daily Bread in Stillwater received $3,000 to help provide food for families during the pandemic. In 2020, the Foundation provided more than $36,000 in grants to food banks during the pandemic.
The Foundation provided a $4,200 grant to the Meridian Fire Department to purchase thermal imaging cameras. Pictured from left to right are Meridian Fire Department board president Simon Thomas, Central Community Foundation board member Peggy Wolfe and Fire Chief John Pross.
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§ 4 Kids and Community, Perkins § Carney Public Schools § Citizens for Improvement of Chandler § Eden Chapel United Methodist Church, Perkins § Friends Chapel Church, Coyle § God’s Food Bank, Guthrie § Goodwill Industries of Central Oklahoma, Guthrie § Guthrie Public Library § Harrell Cemetery Association, Cushing § Helping Hands Community Foundation, Chandler § Hilltop Country Church Food Pantry, Morrison § Hope House, Guthrie § Langston Community Food Pantry § Luther Community Service Center § Luther Senior Citizens § Mehan Union Church Food Program, Stillwater § Meridian Volunteer Fire Dept. § Museum of Pioneer History, Chandler
§ Northeast Lincoln County Fire Dept., Cushing § Oak Grove School, Cushing § Orlando First Baptist Church § Our Daily Bread, Stillwater § Payne County Child Abuse Prevention Task Force, Stillwater § Perkins- Tryon Handicap Classroom, Perkins § Perry Community Cares § Perry Food Pantry, Inc. § Perry Splash Pad § Star Valley Cemetery Association, Chandler § Stillwater Girls, Inc. § Stillwater Project Graduation § Stillwater Rotary Club § Stillwater Weekend Food Sacks for Children § Stork’s Nest of Langston § Stroud Food Pantry § Tara’s Lighthouse, Cushing § Town of Langston (Veterans Appreciation Committee) § Wellston Community Library § Wings of Hope Family Crisis Services, Stillwater § Women’s Sewing Circle, Tryon
Carol Dvorak President | District 3
Stu Preston Vice President | District 2
Bill Davis Secretary/Treasurer | District 7
Gary McCune District 1
Len Tontz District 4
Mark Pittman District 5
Board of Trustees Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. Trustees are elected from the membership and are accountable to the membership. Members have equal voting rights – one member, one vote.
James Wells District 6
Service Area Central's service area covers more than 2,000 square miles. Within the service area, Central maintains more than 4,300 miles of power line. Central serves parts of seven counties in central Oklahoma. Segmented by board district, these counties include:
noble co. garfield co. pawnee co. Perry Glencoe
District 3 District 1 Stillwater
District 1 - 2,302 members Noble, Payne, Pawnee District 2 - 2,690 members
kingfisher co.
District 4
Perkins
Garfield, Logan, Noble, Payne, Pawnee
Guthrie
Stroud
Logan, Oklahoma, Payne
Luther
Lincoln, Payne
Wellston
Chandler
District 7
District 5 - 2,313 members District 6 - 2,462 members
creek co.
District 2
logan co.
District 4 - 2,654 members
Logan, Payne
Cushing
District 6
Lincoln, Logan, Oklahoma, Payne District 3 - 2,276 members
payne co.
District 5
Jones lincoln co. oklahoma co.
okfuskee co.
District 7 - 2,378 members Lincoln, Oklahoma Total Members - 17,075
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OF COURSE, 2020 WOULD END WITH AN
ICE STORM
A rare fall ice storm dubbed Icetober hit Central’s service area on October 26. Fall ice storms are rare and more damaging, as many trees still have their leaves. This provides more surface area for freezing rain to stick. The result was catastrophic for Central, resulting in nearly 200 damaged poles scattered across our service area. Crews worked around the clock for nine straight days to restore power. More than 14,000 meters were off at some point during the storm, and many members were without power for several days. “The ice storm, while early for the year, did not catch us off guard,” said Hunter Robinson, Central CEO. “Just the week before we held a table top drill for our Outage Response Plan and played out what needed to take place should a major outage event take place. When the ice storm hit, we were prepared to hit the ground running, and our team did just that.” Early in the storm, Central brought in mutual aid crews from neighboring Oklahoma cooperatives and three other states to help. Central also had contract crews in addition to the co-op’s own line crews. More than 100 individuals were working in the field along with support from nearly 60 employees in the office dispatching crews, answering members’ phone calls and making sure crews had everything they needed to work efficiently.
Ice began accumulating on the lines on Oct. 26 in a rare fall ice storm. Three waves of ice and wind hit Central’s service area.
All outages were restored by Tuesday evening, on November 3.
Mutual aid crews from four states helped Central crews restore power to members.
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Central was staffed 24/7 as line and right-ofway crews, dispatchers and office personnel worked to restore power and answer members’ questions.
GO AHEAD AND STREAM THE MOVIE! We’re breaking the rurals to bring you the fastest, most reliable internet. We didn’t write the rules for rural internet, but we’re set on breaking them.
Coming Soon!
405-533-FAST • CentranetFIBER.com
centranet basic
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centranet PLUS
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MyCentral.coop
3305 S. Boomer Rd. | P.O. Box 1809 | Stillwater, OK 74076 phone 405-372-2884 | toll free 800-375-2884