June 2016 was the 80th anniversary of the formation of Paulding Putnam Electric Cooperative. This huge milestone is only one of the many we experienced in 2016.
Employee safety set new records, capital credits
retirements were at an all-time high, and outage minutes were reduced to the lowest level in recent memory. The cooperative board suggested multiple changes to the Code of Regulations, and the membership overwhelmingly approved all changes. Perhaps most importantly, all our milestones were achieved without an increase in the cooperative’s distribution rates to our members.
The cooperative relies on its employees to be successful. Without the hard work and dedication of our employees, PPEC cannot provide high-quality member service. The most important thing in cooperative operations, from accounting to tree trimming, is employee safety.
In October 2016, our employees achieved one full year without a lost-time accident. This is an unprecedented milestone that doesn’t happen without dedication to a culture of safety embraced by all employees and supported by the board of trustees. In addition to regular safety training, our employees received training for disaster planning, active shooters and high voltage. Going home safely each and every night is our never-ending goal for our employees.
In December, cooperative members shared capital credits refunds totaling nearly $1.5 million. This credit was applied to December bills, and the refund came right before Christmas, effectively reducing electric bills during the holidays.
One of the seven cooperative principles is members’ economic participation, which means members contribute equity into the cooperative to help build and rebuild facilities. This equity is retained by the cooperative until it is returned to members in the form of capital credits retirements.
Over the years, the cooperative has returned an excess of $22 million back to our membership. Without members’ economic participation, PPEC would be forced to raise rates or borrow excess funds to build and rebuild our electric system. Through members’ economic participation, PPEC can properly manage equity and debt to maintain a high-performing organization that returns patronage capital on a regular basis.
Reliability is a key concern for our membership. Reducing member outages, eliminating blinking lights and improving response time to outages were all high priorities for PPEC in 2016. High-level results were achieved as outage minutes per member dipped below 70 minutes for the first time in 2016. Each year, the cooperative sets a goal for member outages. In 2016, that goal was 100 minutes per member. For the second year in a row, our goal was achieved.
PPEC continues to rebuild aging lines, replace facilities that have a higher failure rate and aggressively clear right-of-way. Trimming trees and removing dead, danger trees have a large impact on reduced outages and blinking lights. Cooperative employees answered the challenge as well by greatly improving response time and providing effective communication to keep members informed of outages and planned restoral times.
Code of Regulations
Soon after the annual meeting in March 2016, the board policy committee began its annual review of PPEC’s policies and Code of Regulations. It was noted that several code items were outdated, had masculine references, and did not include any provisions for future changes in technology.
During this time, the board conducted its annual strategic planning session and discussed term limits and succession planning for board members. As is typical, the discussion hit on term limits for trustees. Some trustees were for term limits, some were opposed to limits, and some thought the term should be longer (increased from the existing 15-year limit) but not eliminated. The question came to maintaining the existing 15-year limit or dropping the term limits completely.
After much discussion, it was left to the membership to decide. In late August, ballots were mailed to all members, and voting was conducted. Overwhelmingly, all proposed changes to the Code of Regulations, including the elimination of term limits, were passed by the members. Nearly 1,200 members voted.
Electric rates are a concern for all members. Again, in 2016, the cooperative did not increase its charges to the membership. This was the second year the distribution rates were not increased.
Financially, the cooperative continued to perform well, as margins exceeded $2.8 million. However, this was a reduction from the prior year by over $650,000. Total plant investment increased by $4.5 million to a year-end total of $86.8 million. Controllable costs increased slightly to 1.37 cents per kilowatt-hour from the prior year of 1.28 cents per kilowatt-hour.
Even though there was an increase in cost, the cooperative continued to perform well below similar-sized cooperatives, which had a controllable cost of more than 2 cents per kilowatt-hour. Controllable costs saw the increase due to increases in our line maintenance expenses.
Overall, PPEC performed very well in 2016. The highlight, of course, is our safety record. We cannot devote enough time and appreciation to our employees for achieving one full year without a lost time accident.
Financially, PPEC met many of its goals, even without meeting its margin goal. The cooperative remains financially strong, as evidenced by the largest capital credits retirement in cooperative history.
Finally, as we move beyond our 80th year and look to our 81st year of operations, we thank our membership for their trust, support and patronage. We want everyone to know the cooperative is focused on our commitment to quality electric service, sustainable energy solutions, superior customer service, and fair and reasonable prices.
GEORGE CARTER is CEO/general manager of Paulding Putnam Electric Cooperative.