McLean Electric continues to grow

Transcription

1 JUNE annual meeting manager s report by Martin D. Dahl, general manager/chief executive officer McLean Electric continues to grow Dahl 212 was a good year for the cooperative. The year ended with great ratios and adequate equity. Congratulations to Travis Voth on 1 years of service and Lucas Dusek at five years, two of our younger lineworkers. 212 was productive, with the addition of 135 new services and the completion of 235 work orders. Although oil development has slowed in our area, the other load areas have continued to grow. Cabin sites continue to increase in numbers, irrigation continues to grow, farm loads are growing and year-round cabin residences are also increasing. We have seen record numbers of new services and work orders over the past two years, which has added a tremendous workload to our small staff. I want to publicly thank the dedicated staff at McLean Electric Cooperative. I am very proud of the staff for their dedication and hard work. Whether it is setting the pole or completing the last piece of paperwork, it takes a dedicated team to keep the lights on. These folks get a lot of work done with a minimal number of people. McLean Electric is also working with construction contractors, which increases the paperwork comparable to that of a much larger cooperative. McLean Electric has also kept a contractor crew busy all winter this past year, and our outside personnel can more than double during the months when you add the contractor lineworkers. Several upgrades were in the works during 212, including the planning stage for the Central Power Electric Cooperative project and the Minnkota Power Cooperative project. The Central Power project involves upgrading three substations and 6 miles of new 115-kilovolt transmission line. This project also involves McLean Electric moving 2 miles of distribution line to make room for the new transmission line. The distribution changes will clean up old line and add capacity to the area. The substations will all be upgraded to 1-MVA transformers, which will give the ability to serve more emergency load during outage situations. The new transmission line and relay coordination will help solve some blinking issues seen in this area by replacing the weak transmission source with a more robust source. The new distribution line will replace aging lines that were in need of maintenance. The majority of these costs will be paid by Central Power Electric Cooperative. The Minnkota project will involve approximately 27 miles of replacement of overhead lines with new underground lines south of Mercer. This project will be partially funded by Minnkota Power with extras and transitions outside of the mitigation area being funded by McLean Electric. The project involves $815, of new line funded by Minnkota. These improvements will provide a reliable power source to this area for years to come at a minimal cost to McLean Electric. This project is a winwin for Minnkota and McLean Electric as Minnkota is given mitigation credit for the burying of our lines and we get new lines with a potential 3-plus years of life. These improvements are in an area where growth is not expected and upgrades would have taken years to complete under normal budget scenarios. Maintenance is a never-ending necessary cost to the cooperative and ensures continued service. McLean Electric spent $11,62 trimming trees in 212. We spent $96,63.75 on pole changes, and $1,643,262.4 on new services and service upgrades, $3, on arrestor changes and $413,53 on general maintenance. Our outage numbers were tracking well with the maintenance dollars spent until December. McLean Electric experienced a number of ice and frost-related outages at that time, which pushed up our numbers significantly. The good news is we had no broken poles during these ice and frost-related outages. I ll close with a quote by Benjamin Franklin: Without continual growth and progress, such words as improvement, achievements and success have no meaning. Thanks again to the board, staff and members for a good year for the cooperative. It is my pleasure to serve McLean Electric Cooperative. McLEAN ELECTRIC NEWS, JUNE 213 C1

2 213 annual meeting chairman s report by Alvin Myers, board president Annual meeting June 18 Myers Another year is behind us. First, a thank you to Don Sorge for his years of service on the board of our cooperative and especially the years he led our cooperative as chairman of the board. Also, a thank you to Del Sayler for her years of service on the board of our cooperative and also for her service on the various positions held during these years. I would encourage all of you to mark your calendars and make plans to attend this year s annual meeting of McLean Electric Cooperative on June 18 at the Garrison City Auditorium. The cooperative business model has worked well over the years that McLean Electric Cooperative has existed. Members of a cooperative always have the opportunity to contact someone at the office or any of the board of directors if the need arises. The annual meeting is an excellent venue to become informed about the issues of the past year and those ahead. I hope to see you the evening of June 18. Come to the annual meeting and see how things are going down at the co-op. Why the cooperative needs margins: Understanding mortgage covenants Overview: As with a personal mortgage, McLean Electric Cooperative s mortgage comes with a list of requirements. Your personal mortgage might require things like carrying insurance, paying your property taxes, and owning a certain percentage of your home. Our lenders aren t all that different. Below are the three primary requirements that McLean Electric s mortgage holders monitor. Equity/assets ratio: This is simply a measure of how much of our company is owned by the members of the cooperative. Just as the bank requires you to have a certain percentage of the value of your home as a down payment, our lenders require that our members own at least 3 percent of the value of the company. As we grow our company, the value of it increases, meaning that our membership s stake in the company needs to grow as well. That is accomplished through year-end margins which turn into capital credit allocations to our members. C2 JUNE 213, McLEAN ELECTRIC NEWS Time interest earned ratio (TIER): This ratio measures the ability of the cooperative to pay the interest on its longterm debt. The lenders are dependent on our full and timely payments to keep their business afloat, so they want to be sure that we are generating enough cash from our operations to cover the interest on our loans. If the TIER drops below 1, it means that we are borrowing money to pay our interest payments. The lenders require a 1.25 TIER on an annual basis. Debt service coverage ratio (DSCR): This ratio is a more in-depth look at the cooperative s ability to meet its debt obligations than the TIER. It takes into consideration four figures: the depreciation expense, the net margins, principal payments on long-term debt, and interest payments on long-term debt. It determines if the cooperative is generating enough cash flow to cover its principal and interest obligations. If the DSCR is less than 1, it means the cooperative would need to borrow money to make its payments. McLean Electric s lenders hold us to a 1.35 DSCR.

3 Member Information 212 Rate Class Numbers 212 KWH Sales RATE CLASS NUMBER OF METERS ENERGY DATA Single Phase 3426 KWH Purchases 111,121, ,64,683 Three Phase 125 KWH Sales 15,483, ,114,289 Irrigation 52 Peak Demand (KW) 19,491 19,93 Blue Flint 1 Miles of Line 1,745 1,758 GRE 1 Electric Heat 1155 RATE CLASS REVENUE PERCENT OF REVENUE Single Phase 4,81,481 46% Three Phase 2,488,198 24% Irrigation 243,676 2% Blue Flint 2,3,634 22% GRE 515,523 5% Wheeling (WAPA) 44,77 % KWH Sold By Year 49,499,32 53,162,213 53,88,546 53,775,421 54,513,576 56,444,262 89,163,516 98,491,68 95,631,657 16,645,77 15,483,13 112,114,289 McLEAN ELECTRIC NEWS, JUNE 213 C3

4 Balance Sheet As of December 31, 212 ASSETS & OTHER DEBITS LIABILITIES & OTHER CREDITS Utility Plant Margins & Equities Total Utility Plant In Service $25,162,162 Memberships Construction Work in Progress $246,132 Patronage Capital 6,229,535 Total Utility Plant $25,48,294 Operating Margins - Prior Years Operating Margins - Current Year 92,147 Accum. Provision for Dep. & Amort. $7,364,423 Non - Operating Margins (11,256) Net Utility Plant $18,43,871 Other Margins & Equities 849,97 Total 7,897,523 Other Property & Investments Non-Utility Property (Net) $ Long Term Debt Investment in Subsidiary Companies $ Long Term Debt - RUS (Net) 55,978 Invest. In Assoc. Org - Patronage Capital $3,422,152 Long Term Debt - FFB - RUS Guaranteed 6,228,477 Invest. In Assoc. Org - General Funds $ Long Term Debt - Other - RUS Guaranteed Invest. In Assoc. Org - Nongeneral Funds $18,27 Long Term Debt - Other - (Net) 7,247,89 Investments in Econ. Dev. Projects $14,74 Long Term Debt - RUS - Econ. Devel. (Net) 242,5 Other Investments $47,144 Payments -Unapplied Special Funds $4,522 Total Long Term Debt 14,269,44 Total Other Property & Investments $4,82,765 Non-current Liabilities Current and Accrued Assets: Obligations Under Capital Leases - Noncurrent 12,978 Cash - General Funds $72,451 Accumulated Operating Provisions 31,35 Cash - Construction Funds - Trustee $ Total Other Noncurrent Liabilities 314,328 Special Deposits $ Temporary Investments $ Current & Accrued Liabilities Notes Receivable (Net) $ Notes Payable 95, Accounts Receivable - Sales of Energy (Net) $1,135,75 Accounts Payable 987,24 Accounts Receivable - Other (Net) $275,964 Customer Deposits 64,568 Renewable Energy Credits $ Current Maturities Long Term Debt Materials and Supplies - Electric and Other $617,359 Current Maturities Long Term Debt - Econ. Dev. Prepayments $58,375 Current Maturities Capital Leases Other Current and Accrued Assets $ Other Current & Accrued Liabilities 451,88 Total $2,789,854 Total Current & Accrued Liabilities 2,453,472 Regulatory Assets $ Regulatory Liabilities Other Deferred Debits $39,176 Other Deferred Credits 21,299 TOTAL ASSETS & OTHER DEBITS $24,955,666 TOTAL LIABILITIES & OTHER CREDITS 24,955,666 C4 JUNE 213, McLEAN ELECTRIC NEWS

5 Income Statement As of December 31, 212 McLEAN ELECTRIC NEWS, JUNE 213 C5

6 212 Co-op Stats 212 KWH Sales GRE 515,523 BLUE FLINT 39,34,53 SINGLE PHASE 42,197,185 THREE PHASE 2,482,54 IRRIGATION 1,869, Sales Revenue By Percentage C6 JUNE 213, McLEAN ELECTRIC NEWS

7 Courtney Tweeten selected for Youth Tour The Electric Cooperative Youth Tour has brought high school juniors and seniors to Washington, D.C., every June since the late 195s. Students compete for slots for this unique opportunity and are selected for this program by their local electric cooperative. McLean Electric s selection process takes the form of an essay contest. This year s winner is Courtney Tweeten, who is the daughter of Harold and Roxann Tweeten of Washburn. During her time in Washington, D.C., Courtney will learn about electric cooperatives, American history and U.S. government. She will walk away with a greater understanding of her role as a citizen. Courtney will participate in National Youth Day, visit with North Dakota s Congressional delegation, and explore the sights around the nation s capital. She will travel with other students from North Dakota and get to interact with students from across the nation. There is no doubt that she will see much of the rich history that is America. Walking the hallowed halls of Congress is a memory that will always stay with her. McLEAN ELECTRIC NEWS, JUNE 213 C7

8 Service Awards 1 years of service, Travis Voth, lineworker 5 years of service, Lucas Dusek, lineworker COOPERATIVE STAFF MANAGEMENT Martin Dahl, manager 4 Years Luke Steen, office manager 3 Years Wayne Skarda, operations manager 3 Years Darrin Sand, member service manager 8 Years STAFF Renee Fetzer, administrative assistant 28 Years Tonya Graeber, billing supervisor 14 Years Marcia Zimmerman, accountant 9 Years Lisa Zacharias, custodian 9 Years Chrissy Utley, accounts payable 2 Years C8 JUNE 213, McLEAN ELECTRIC NEWS Anne Brawley, MSR/electrician 1 Year LINE CREW Daryl Engel, line foreman 39 Years Rick Gienger, lead lineworker 36 Years Leon Philbrick, lineworker 37 Years Nathan Ruud, lineworker 11 Years Lucas Dusek, lineworker 5 Years Les Larson, staking engineer 21 Years Jerry Reiser, line foreman 34 Years Travis Voth, lineworker 1 Years Brian O Shea, lineworker 3 Years BOARD OF DIRECTORS: Alvin Myers, President, , District 1, Ryder Orvin Ravnaas, Vice President, , District 4, Turtle Lake Agnes Jennings, Secretary-Treasurer, , District 7, Washburn Ron Bloom, Director, , District 2, Ryder Rod Stockdill, Director, , District 3, Garrison Troy Presser, Director, , District 5, Turtle Lake Ernest Grueneich, , District 6, Turtle Lake STAFF: Martin Dahl, General Manager Wayne Skarda, Operations Manager Darrin Sand, Member Services Manager Luke Steen, Business Manager Office: Toll-Free: Fax: mclean@mcleanelectric.com Website address: