CEO annual report

Posted on Jun 12 2024 in Southern Indiana Power

Everything we do at Southern Indiana Power must begin with a focus on safety. I am pleased to report that the cooperative did not experience a serious accident or injury in 2023. Two major milestones were achieved related to safety in 2023. First, the cooperative was recognized for 600,000 hours of no-lost time worked since October 2010. Second, the cooperative completed an unannounced on-site safety audit to attain our national safety achievement status. Since 2008, the cooperative has been recognized for attaining the NRECA national standard of “safety achievement.” I congratulate all employees for this accomplishment and their continued dedication to safety.


The primary purpose of the cooperative’s Annual Meeting is to hold elections for the board of directors and share financial information.

Back in 2020, we made some changes to increase member participation and control costs. The two major changes (reverting back to a business-style meeting and mail-in registration) have proven to be very effective in accomplishing these goals. The cost of putting on our Annual Meeting has decreased significantly, saving money for all members. Registrations and voting have risen dramatically from an average of 550 members to an average of 2,000 members. I would like to thank all members for their increased participation.

We plan to celebrate our 85th anniversary this summer by hosting a member appreciation day. Our “Brats and Kilowatts” event will include a lunch, an equipment demonstration, a live line demonstration, and T-shirts for the first 200 attendees. Stay tuned for more details about the event.


As a cooperative, we operate “at cost,” so any profit generated at the end of the year is assigned back to you in the form of capital credits. Over time, these capital credits are paid back to members. In 2023, we paid back just over $400,000 in capital credits to members who received electric service in 1998.

This year, your board of directors voted to pay back approximately $520,000 in capital credits for 1999. All active members who had service in 1999 will receive their capital credit distribution in November.

Since 2012, the co-op has paid back over $8 million in capital credits to our member-owners. I want to remind you that we began paying out estates back in 2018. If you are interested in estate retirements, please contact the office for details.


One of the main goals of the cooperative is to provide reliable power to all members. Maintaining an electric distribution system of nearly 1,700 miles is a year-round process.

In 2023, we began our new work plan, which includes investing over $16 million in our electric plant over the next four years. This includes new services to approximately 600 new members, 23 miles of three-phase line extensions, 1,200 pole changes, and approximately 40 miles of one-phase line rebuilds.

We have focused primarily on our least-performing electrical circuits from a reliability perspective. I am pleased to report that we are making good progress in these areas and are attempting to minimize service interruptions.

We are continuing our aggressive right-of-way maintenance program as well, with the same goal of minimizing service interruptions. An additional crew was added in 2022 to help reduce our overall trim cycle, which is the time it takes to move around our electric system. This year, we will focus on our Bandon substation in Perry County.


Here at Southern Indiana Power, we strive to keep your rates as low as possible. Until last year, we had enjoyed a 10-year period of rate stability, with bills increasing, on average, just 20 cents per month.

In 2022, we began seeing more significant increases than we have for quite some time. Our rates increased by 10% on average for that year. We were facing cost pressures on both the wholesale side and the distribution side of the business at the same time.

On the wholesale side of the business, Hoosier Energy was experiencing skyrocketing natural gas, coal, and energy market prices. These commodities have been volatile due to rising demand and our nation’s inability to increase supply. Wholesale costs were hovering around $70 per megawatt hour and then soared over $80 per megawatt hour. On the business’s distribution side, we saw significant increases in material costs for poles, transformers, wire, and fuel.

For 2023, I am pleased to report that wholesale and distribution costs began stabilizing. This cost stabilization was supported by an increased natural gas supply and shoring up the supply chain issues for electric distribution materials. While we were hoping for cost decreases that have not materialized, at least we saw this period of cost volatility normalizing somewhat. In the future, we hope to get back to providing the rate stability you have grown accustomed to.


In 2023, the Operation Round Up Board of Trustees awarded grants totaling nearly $35,000 to help fund much-needed community projects and scholarships. By members simply agreeing to round up their electric bill to the next dollar, the Operation Round Up program has been able to fund projects totaling nearly $550,000 since its inception in 2006. Thanks to all members who participate and make this program a huge success. I would like to thank our Operation Round Up Board of Trustees — Paul Malone, Michelle Lynch, Randy Kleaving, Amy Ramsey, Roger Hurm, Ed Denning, and Gary Waninger.


Southern Indiana Power (Southern) and Perry Spencer Rural Telephone (PSC) formed a partnership in 2019 to bring fiber optic high-speed Internet to all members. Approximately 4,000 members lacked access to a high-speed internet connection, nearly 50% of our electric service territory.

Engineering estimates to build fiber in these areas were approximately $24 million. We were fortunate to receive a $6.5 million grant from the state of Indiana. Also, Spencer County committed an additional $3 million in matching funds toward our areas in Spencer County. Rounding out the funding for our project, Southern secured a $15 million RUS loan.

The agreement structure is for Southern to own the fiber, PSC to own the customers and lease the fiber network from us, essentially making our debt service payments.

I am excited to report that the mainline construction phase of the project is complete. In 2023, drop construction and customer activations were focused on our two final remaining areas: the Rural Digital Opportunity Fund (RDOF) and the Indiana Connectivity Program (ICP). Members can continue to sign up for one of these programs (location determines which one) to get on the list to get connected. To date, we have connected nearly 2,000 members to fiber. Our goal is to complete this entire project by the end of 2025.

It is important to know that we will not stop constructing fiber until all Southern Indiana Power members have access to this world-class internet connection. We are delighted our two cooperatives are working together on these critical projects. Working together with PSC, we will get the job done!

Meet your 2024 elected directors

Randy Kleaving

District 5

Kyle Knieriem

District 6