2 0 1 2 A n n u al R e p o rt - 4-County Electric Power Association

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2 0 1 2 A n n u al R e p o rt - 4-County Electric Power Association

2 0 1 2 A n n u a l R e p o r t

Seeing the Value of Electricity


A bigger, better, brighter future at 4-County

Providing an important

service for value is

something we do every

day at 4-County Electric

Power Association. But it is

too easy today for us to only

focus on the issues and

expenses involved in running a

cooperative of this size - items

like power supply, politics and

regulation, industrial growth,

conservation, finances,

maintenance, technology and more. I think that too many

times, as we take care of our responsibilities to our

members and their investment, we may be guilty of not

talking enough about the real, measureable value of the

service we provide our members daily.

While we all might be tempted to complain about a

high power bill, in fact, the price of electricity has

remained low since this Association first began providing

electricity to our members in 1939, especially in relation

to other products we use on a daily basis. And despite

the fact that the costs to build and maintain our system

have risen dramatically in the same time span, I’m proud

to say that 4-County has done a superb job in providing

electricity that is affordable and reliable. As you’ll see on

the following pages, electricity is a great value across the

country, but especially for 4-County members, who pay

an average of $5.00 a day for the power they use at their

homes. It’s difficult to imagine anything else you could

purchase for that amount that lets you do all the things

that electricity does.

Even though electricity is one of the best values

around, the simple truth is like anything, if you use a lot

of it, it will cost you more. Americans use more electricity

now than ever before and that use can add up. 4-County

offers programs and resources that can help you lower

your usage – and your bill – from our free annual energy

use audits for your home, to access to daily usage

information online to financing and incentives for energy

efficient improvements including heat pumps, to easy

energy efficiency tips and much more.

As we go about our lives, I hope we can all take the

time to realize what the great value that comes in the

services 4-County provides and take advantage of

everything your Association has to offer.

There aren’t many sure

things in life, but one of

them is the Cooperative

model of doing business. Part

of being a cooperative is that

we operate as a not-for-profit

business. In other words, once

we pay the power bill-which

accounts for about 75 cents of

every dollar we take in- and

take care of taxes, interest and

depreciation, we have about 17

cents left. That’s 17 cents used to maintain 5,700 miles of

line, more than 45,000 meters, 22 substations, 34,000 plus

transformers, 117,046 poles, the technology we use, the

offices we occupy and the employees who work diligently

to keep your lights on.

And if those things aren’t impressive enough,

4-County also provides many other things to our members,

including programs such as the Co-op Connections Card

which has already saved members more than $96,000 on

prescription drugs. There are also our many energy

efficiency programs which give members help in lowering

their usage and their electric bills. We’ve also added the

ability to let you see your account online, including a look

at your daily power use, as well as smartphone apps to

allow access to your account and even make payments.

This year we also added an online voting option for our

Board of Directors election. We are also hard at work

looking for even more ways to serve you better. One of

those, coming this fall, will allow members to change the

way they pay their electric bills. It’s a program called

Prepay and it will let you pay ahead of what you use, just

like putting gas in your car. You put money in your

account and we’ll tell you when you are getting low and

need to fill up. Some of the great benefits include being

able to budget by making your payments as you see fit,

and not having a bill at the end of the month. Interested?

Look for more information in the coming months.

In the meantime, you can rest assured that every

4-County employee is working hard to keep providing our

members the service, programs and value they expect, and

we will continue to pursue new technologies and different

ways of doing business that will allow us to do this in the

most cost-effective ways possible. It’s all part of the

Cooperative way.

Jay Gilliland, President

4-County Board of Directors

Joe Cade, CEO/General Manager

4-County Electric Power Association

2


The Value of Electricity

When you look at the numbers, electricity is a powerful bargain

2.4

10

11.5

average cost, in cents, of a kWh of electricity for

4-County residential members in 1939

average cost, in cents, of a kWh of electricity for

4-County residential members today

average cost, in cents, of a kWh of electricity for

U.S. residential customers today

$5 average cost, for a 4-County member to power their home for 24 hours

$3.50 average national cost in 2011 for 1 gallon of gas

$6.50 average national cost in 2011 for 1 fast food meal

$7.93 average national cost in 2011 for 1 movie ticket

2 average hours, out of a possible 8,760, that 4-County

members are without power in a year.

Sources: 4-County Electric

Power Association, ABC News,

National Association of Theater

Owners, Business Insider,

Tennessee Valley Authority,

NRECA

3


Income Statement*

Calendar Year Ending December 31, 2011

OPERATING REVENUE

(What our members paid for service)

Electric Sales Revenue:

Residential $65,915,597

Small Commercial 11,808,847

Large Commercial & Industrial 28,161,373

Street & Outdoor Lighting 2,718,008

Total Electric Sales Revenue $108,603,825

Other Revenues 2,720,665

TOTAL OPERATING REVENUE $111,324,490

OPERATING EXPENSES

(What it costs to operate your system)

Purchased Power (What we paid TVA for power) $80,012,366

Operation & Maintenance Expenses (Cost to operate &

maintain the system)

17,926,291

Depreciation Expense (Use of plant & equipment over life) 5,855,118

Tax Expense (Payroll, property, & other taxes) 381,923

Interest Expense (Interest on debt & member deposits) 3,346,678

Condensed Balance Sheets*

Calendar Years Ending December 2011 & 2010

December 31 December 31

2011 2010

ASSETS

Utility Plant - Net $165,081,852 $157,602,187

Other Property & Investments 2,649,953 2,707,481

Current Assets 13,011,239 16,611,693

Deferred Debits 3,541,185 5,453,833

Total Assets & Other Debits $184,284,229 $182,375,194

LIABILITIES

Memberships & Patronage Capital $90,865,467 $86,640,445

Long Term Debt 67,324,435 70,142,047

Current & Non-Current Liabilities 20,885,237 20,600,503

Deferred Credits 5,209,090 4,992,199

Total Liabilities & Other Credits $184,284,229 $182,375,194

TOTAL OPERATING EXPENSES $107,522,376

Interest Income (Money earned on short-term investments) 160,538

Other Income (Income from organization memberships & 330,291

gains on sales of assets)

TOTAL OTHER INCOME $490,829

TOTAL MARGINS (Members’ equity for the year) $4,292,943

Electric Sales Revenue

Residential

Small Commercial

Large Commercial & Industrial

Street & Outdoor Lighting

$11,808,847

Operating Expenses

Purchased Power

Operation & Maintenance Expense

Depreciation Expense

Tax Expense

Interest Expense

16.7%

$28,161,373

5.4%

$65,915,597

0.4%

3.1%

74.4%

$2,718,008

4

*A portion of this information is unaudited as our audit is performed on a fiscal year basis as of June 30.


Highlights

A look at some of the successes 4-County has had over the last year

Saved nearly $300,000 due to improvements and changes in inventory procedures

Added an online voting option for 4-County Board of Directors elections

Named Tree Line USA electric utility by National Arbor Day Foundation for third year in

a row

Began engineering for new Waverly substation in Clay County with a goal of energizing

the substation in April 2014

Replaced and/or upgraded protective devices used on power lines in order to limit the

number of members affected by outages associated with our West Point, Carbonic and

Adaton substations as part of an ongoing strategy to upgrade system protection

equipment

Enjoyed continued success of In Home Energy Evaluation program, with members

making more than $1,350,000 in improvements and receiving more than $122,000 in

incentives

Saved members more than $96,000 on prescription drug costs with the Co-op Connections

Card program

Added nearly 1,000 new residential members to Bank Draft, which puts nearly 25 percent

of all members in the program

Worked more than 176,700 hours with no lost time accidents

Revamped our outdoor lighting program to better track our inventory, resulting in a more

accurate and complete billing of more than 26,000 outdoor lights on our system

Inspected more than 10,000 poles for deterioration and decay, resulting in the replacement

of 231 of them

Began providing upgraded account information to members including daily usage and

temperature data online

Implemented E-mobile - a centralized, computerized work dispatch system -resulting in

savings on paper, fuel, time and expenses

Updated 4-County logo, integrating it throughout the cooperative to include building signs

and vehicles

Brought right of way management back in-house, with 4-County system arborists

overseeing ROW contractors

5


Programs

Energy Efficiency

Programs:

In Home Energy Evaluation

Energy Use Audit

Sunscreens

Heat Pump

PowerPlus New Home

Commercial Advice and Incentives

Save money on prescription drugs, at local merchants

and online with the Co-op Connections Card

Members have already saved nearly $100,000 at

participating pharmacies and can shop and save at

nearly 100 local retailers.

Resources:

www.4county.org

www.togetherwesave.com

www.energyright.com

Bank Draft

Credit Card Draft

Budget Billing

Payment Options

Golden Priority

Make payments 24/7

online or by phone

Coming soon: Prepay!

Pay by mail or

in person

Get the

details

Usage Graph

Set up an online

account and get

access to your

4-County billing and

usage information.

You can track how

much power you

use, when you’re

using it and how the

weather affects it

and more.

6


Board of Directors & Executive Staff

Directors

Jay Gilliland, President

Chickasaw & Webster Counties

Johnny Johnson, Vice President

At-large

Mike Banks, Treasurer

Noxubee County

Kenneth Seitz

Oktibbeha County

Bud Tumlinson

Clay & Monroe Counties

John Scarbrough

Lowndes County

Marty Crowder

Choctaw & Winston Counties

Staff

Joe Cade, CEO/General

Manager

Brian Davis, Manager of

Human Resources & Training

David Kilpatrick, Manager

of Information Technology

Anthony Miller, Manager

of Operations

Marcus Stone, Chief

Financial Officer

Lynn Timbrook, Manager

of Engineering

Jon Turner, Manager of

Marketing and Public Relations

Cliff Wall, Manager of

Consumer Services

7


Committees

Credentials & Election Committee

George Bailey – West Point

Sylvester Davis – Starkville

Nick Hairston – Columbus

Clay Hollis – Macon

Bob Hudson – Columbus

Kenneth King – Ackerman

Millard Long – West Point

Warren Oakley – Starkville

Bobby Ray Perkins – Mathiston

Jim Porter – Mathiston

James Rowe – Prairie

John Tennant – Weir

Nominating Committee

Julius Beck – Macon

Tom Breland – Starkville

Eric Chambers – Ackerman

Paul Crowley – Maben

Robert Cunningham – Brooksville

Buddy Griggs – West Point

Gary Holtman, Secretary –

Columbus

Frank Howell – Columbus

Henri Sue Kennard – Starkville

Don Land, Chairman – Aberdeen

Charles McMinn – Ackerman

John Partridge – Columbus

Thomas Robinson – Columbus

Odie Shaw – Sturgis

Belk Weems – West Point

Jimmy Whitt – Mathiston

Sammie Williams - Columbus

Member Advisory Committee

Leslie and Margaret Baucom - Steens

Eric and Mary Grace Chambers -

Ackerman

Dexter and Dee Cochran - Steens

Paul and Sherry Crowley - Maben

Robert and Libby Cunningham -

Brooksville

David and Pat Curtis - Columbus

Sylvester and Marilyn Davis -

Starkville

Elton and Lenora Dean - Cedar Bluff

Russell and Haley Dodds - Starkville

Frank and Lula Bell Draper - Macon

Phillip and Sherrie Eaves - Macon

Wesley and Debbie Gammill -

Ackerman

David and Annie Gibbs - West Point

James and Rhonda Gillespie - Macon

Benny and Deanie Graves -

Ackerman

Buddy and Gale Griggs - West Point

Bubba and Emily Harrington - Sturgis

Frank and Kathy Howell - Columbus

Tim and Mary Hudson - Steens

Don and Bonnie Land - Aberdeen

Grey and Teresa Land - Macon

Millard and Anne Long - West Point

Gene and Paulette Moore - Macon

Scott and Barbara Murrah -

Columbus

David and Carolyn Oswalt - Sturgis

John and Bonnie Partridge -

Columbus

Gene Penick - Macon

Robert and Bettye Phillips -

Columbus

Charles “Bob” and Johnie Power -

Ackerman

Larry & Deborah Pruitt - Maben

Jack and Pam Rhoades - Starkville

Jerry and Mary Riggan - Mathiston

James and Betty Rowe - Prairie

Winford and Marjorie Swedenburg -

Crawford

John and Carole Tennant - Weir

Carlos and Debby White - Starkville

Sammie and Sandra Williams -

Columbus

Jimmy and Jimmie Whitt - Mathiston

Paul Yeatman - Starkville

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