2014 Annual Report

2014 Annual Report
Northwestern Rural Electric Cooperative, Inc.
2014 Executive Report — Board Chair/President & CEO
YOUR COOPERATIVE had another
strong financial year in 2014. Electric
revenue was enhanced by strong sales
during the cold weather in the first
quarter stemming from the “polar vortex.” Margins for the year were about
$2,600,000. This enabled your co-op to
return $500,000 in capital credits payments to you based upon your patronage. The strong margins also enabled
funding for improvements to your electric plant. Approximately $4.3 million
was invested in the plant during the
year. Wholesale power prices from our
cooperative’s power supplier, Allegheny
Electric Cooperative, Inc., continued to
be stable in 2014. Your cooperative’s
board and management team developed plans and strategies to operate
your co-op while maintaining affordability for you, the member. Your retail
electric rate continued to be competitive and one of the most reasonable
energy values in our area.
The cooperative has embarked on an
extensive line improvement program
designed to improve reliability. This
project has been ongoing for about the
last 30 years. The project includes
replacing the old copper conductor
with new aluminum wire that is
stronger and can withstand the
extreme weather conditions that are a
common occurrence here in Northwestern Pennsylvania. This new conductor is more efficient and reduces
line loss, helping to keep your electric
rates affordable. During the process of
making the upgrades, the cooperative
also takes the opportunity to move the
lines closer to the road. This allows our
linemen to maintain the electric lines
utilizing bucket trucks, which give
them ease of access to the facilities.
This means outage time is reduced
because linemen do not have to carry
heavy equipment and walk through
lengthy rights-of-way to remote areas
to make repairs. Reliability is one of
our main objectives. We are taking
advantage of low interest rates and
reinvesting in our facilities to provide
you with world-class service.
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Mary A. Grill,
President & CEO
The winter of 2014 was one of
extreme weather. In January, peak
demand for electricity was 25 percent
higher than in a typical January. There
was heavy electrical demand for heating due to the polar vortex, which
brought record cold temperatures. PJM
Interconnection — the electric grid
operator for this area — reported tight
operational conditions from Jan. 6-8,
2014. Voluntary demand response systems like our load management system
were called upon twice on Jan. 7 to curtail load. For those who participate in
load management, this meant that their
electric water heaters and electric heat
were shut off during the control periods. These voluntary systems like our
load management program were very
significant in helping PJM Interconnection manage the grid during this peak
event. Your cooperative’s load management continues to be one of our key
programs. Not only has the load management program saved all of our
members about a $1 million in power
Kathryn J. Cooper-Winters,
Board Chair
costs during 2014 by lowering demand
during peak periods, it is a real value
to the participants. Members who participate agree to allow the cooperative
to control or shut off their hot water
tank or controlled heat during peak
events. Members participating in the
hot water heater program also benefit
by 24/7 hot water heater servicing with
a free tank replacement as needed.
Members with controlled electric heat
benefit from shared savings and a
reduction in their heat rate. If you are
one of the 9,000 members on our load
management program, we would like
to thank you for making a real impact,
especially during last winter’s polar
vortex.
In late 2014, your cooperative’s
emergency plan was put to the test. In
the evening hours of Nov. 5, 2014, what
appears to be a random act of violence
occurred at our Edinboro West Substation. A round of bullets from a high
powered semiautomatic rifle was fired
at the 10-MVA substation transformer
Northwestern Rural Electric Cooperative, Inc.
organizations, we are
faced with a large wave of
retirements in the next
five- to 10-year period as
the Baby Boomer generation prepares to retire.
Many of our senior and
experienced employees
will be leaving the organization as they move into
their retirement years. In
2014, your cooperative
implemented a reorganization plan to prepare for
the future. We have a new
competent staff in place,
and an extensive multifaceted training program
has been developed to
make certain our young
employees will be prepared to take leadership
roles when the time
comes. I can assure you
that your cooperative will
MARY AND HER VPS: from left, Ken Lindberg of human resources, Thomas Dimperio of IT, Mike Baker of finance, Danielle
Haschalk of accounting, Mary Grill, Bradley Smith of member services, Kevin Hindman of operations/engineering, Michelle be prepared to face the
Garcia, executive secretary, and Linda King of communications and energy solutions.
challenges of the future.
Please accept this perin service at Edinboro West. This
diation of the site on April 3, 2015. We
sonal invitation to you and your family
caused extensive damage, and when
achieved the standard as set forth in
to help us celebrate our 79th year.
our crews arrived on the scene they
Act 2 and the site attained a residential
Our annual meeting will be held at
found mineral oil leaking from several
standard for soil. Law enforcement
the Crawford County Fairgrounds on
small holes in the large substation
continues to investigate the incident.
Saturday, Aug. 1. The fairgrounds open
transformer. Our fear was that the
Thankfully, the loss was primarily covat 10 a.m. and we have a lot of fun
damaged unit would overheat and
ered by insurance. Therefore, it had
things and great food planned for the
threaten fire. Had it not been for the
minimal impact on your 2014 financial
whole family. Our cooperative business
swift actions of our highly trained
statements. The silver lining in this
meeting is at 1 p.m., and there will be
engineers and linemen, the situation
event is that it demonstrates our level
an election of three members to reprewould have escalated to a serious sceof preparedness for emergency
sent you on the board for a three-year
nario. Utilizing our advanced, highresponse. Your linemen work in the
term. Come join us for a day of co-op
tech equipment, our engineers and line
most challenging of conditions, and
fellowship. This is your opportunity to
crews were quickly able to mitigate
are true first-responders, always mindexercise your democratic control — one
and respond to the accident. Our
ful of public safety. The management
of the seven principles that has served
crews were able to manually transfer
and board of your co-op are proud of
your cooperative’s business model well
the electric load to an alternate locathe work of our Engineering and
for the past 78 years.
tion. Fortunately, your cooperative
Operations Department, and this is
invested in a mobile substation many
another fine example of their commityears ago. This equipment has been
ment to keeping the lights on.
key to us over the years and was used
One of our most important initiaKathryn J. Cooper-Winters
to minimize outage time for members
tives during the past year was to
Board Chair
in the area until repairs could be
develop a succession plan for our
made. The leaking oil was confined
organization. Your cooperative is a perand we immediately began to remedipetual organization. We celebrated our
ate the site. I am pleased to tell you the
78th anniversary in 2014, and will be
state Department of Environmental
here to serve our members for many
Mary A. Grill
Protection (DEP) approved the remeyears into the future. Like many
President & CEO
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Northwestern Rural Electric Cooperative, Inc.
Northwestern Rural Electric Cooperative
Association, Inc. and Subsidiaries
The financial statements of the cooperative for the year
2014 has been audited by Buffamante Whipple Buttafaro,
P.C., Jamestown, New York. The audit resulted in a clean
opinion stating that the financial statements presented
fairly, in all material respects, the financial position of the
cooperative and subsidiaries as of December 31, 2014,
and results of their operations and cash flows for the
years ended in accordance with accounting principles
generally accepted in the United States of America.
The auditor’s complete report is on file in the office of the
cooperative and is available for inspection by the membership.
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Northwestern Rural Electric Cooperative, Inc.
Northwestern Rural Electric Cooperative
Association, Inc. and Subsidiaries
Northwestern REC
Quick Facts
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Northwestern Rural Electric Cooperative, Inc.
Statistics & Trends
Liberty and a better life for all
EVERY JULY, we take time to reflect on our country’s history and
remember how the actions of a few helped shape the way we live
today. In the same way, we can look back on the rich history of the
electric cooperative movement, and how some determined individuals working together were able to improve their quality of life
and the quality of life for all those who would come after them.
Every day, Northwestern REC members and employees pay
homage to the legacy of our cooperative founders. And,
because we are a part of an electric cooperative, we know we
have the power to impact our present and shape the future,
just like those who came before us.
Through grassroots advocacy efforts, we help influence policy decisions that will affect our communities now and for years
to come. We are the catalyst for change in our communities. We
leverage our collective power to get things done. For example, in
December 2014, the Northwestern REC Board of Directors made a
$5,000 donation toward the creation of warming centers throughout
Northwestern Pennsylvania. A $5,000 CoBANK grant was awarded
to double those funds to $10,000.
We work together, partnering with other co-ops, local businesses
and community organizers to achieve economic development goals —
creating better opportunities and improving the quality of life for our
families and communities just as our founding co-op members did.
Today, the Co-op Connections Card has saved over $135,500 in prescription costs since 2011.
We understand that the decisions we make today could greatly
affect how future generations live, so we invest in energy-efficiency
programs that protect our future generations while still providing
high-quality, affordable electric power. Through the co-op’s load
management program, over $21 million has been saved in avoided
power costs since 1985; nearly $1 million was saved in 2014
alone.
Cooperatives are helping to build the next generation of leadership through our Rural Electric Youth Tour program that
sends high school students to Washington, D.C., to meet with
lawmakers and get an up-close view of how our government
functions. Youth Tour participants leave our nation’s capital
feeling energized. It inspires them to make a difference in their
communities and gives them a new perspective. Youth Tour
provides young people from our communities with an opportunity they may otherwise have never known.
All of these things, plus so much more, are what make up the
cooperative difference. This Fourth of July, as we think about the
future of electric cooperatives and how we will continue to shape
our country and our society, Northwestern REC remembers
what it took to bring power to our communities and let the determination of those who came before us guide us.
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Northwestern Rural Electric Cooperative, Inc.
Who answers your questions at the co-op?
Loyal connections
Co-ops change lives in the communities they serve
LOYALTY IS a prized virtue — to country, family, even the schools we attend. We keep those
ties strong throughout our lives.
We at Northwestern REC also have loyalties
— to the members and communities we serve.
We have deep connections here because Northwestern Pennsylvania is our home, and you are
our neighbor.
When you signed up for service with Northwestern REC, you became a member, not a customer —because each of our 20,000 consumermembers owns a portion of the cooperative.
That means we care about improving the
quality of life in the areas we serve. From sponsoring the scoreboard at the high school football stadium to taking donations for the local
food bank, Northwestern REC invests in the
places where you live and work.
Northwestern REC doesn’t exist to make
profits for distant investors on Wall Street. We
exist to provide you with safe, reliable, and
affordable electric service — and we are doing
so in a way that makes things better for future
generations. Because electric co-ops operate on
a not-for-profit basis, we have no need to
increase revenues above what it takes to run
our business in a financially sound manner.
This structure helps keep your electric bills
affordable.
We take our jobs seriously, but we also take
our community roles seriously. That’s why we
offer scholarships to college-bound students,
and offer hands-on teacher grants to our local
educators. Through our Clearly Brighter
Teacher Grant program, over $42,600 has been
awarded in teacher grants since the program
began in 2000.
We don’t participate in these activities simply because it’s nice to do, or even the right
thing to do. We do it because we remain loyal to
our members, our neighbors, our home — and
a mission to make life better in the areas we
serve.
CO-OP MEMBER SERVICES: The Member Services Department handles everything from new
membership applications to billing and payment questions. Capital credits and payment
assistance are also handled by this department. Front row from left: Matt Stroup, Kati Miller,
Kim Zombeck and Bradley Smith. Back row from left: Leslie Burton, Jill Glunt, Jane Brown,
Melissa Newhard, Brenda Dugan and Gerda Frazier.
CO-OP ENGINEERING & FIELD SERVICES: The Engineering, Operations and Field Services
Department is responsible for right-of-way clearances, new construction, line relocations,
outdoor lighting and safety hazard awareness. From left: Connie Sovisky, Amy DeWoody,
Amanda Rhoades, Chuck Hickernell, Steve Miller, Bob Joslin, Ryan Meller, Jeff Kachik, Laura
Roggenkamp, Brian Thompson, Rob Burns and Steve Kargol.
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Northwestern Rural Electric Cooperative, Inc.
Your board
of directors
Who is your director?
NORTHWESTERN Rural Electric Cooperative is guided by a board of 10 directors (pictured left), one from each of the 10 districts within its service territory.
Although each director is a member from his or her district, the entire co-op
membership votes the directors into office through the election process held
during the annual meeting. Director terms last for three years.
William (Jack) Sheffer
District 1
Jesse (Earl) Koon
District 2
Board Treasurer
District 1 — Springfield, Conneaut, Girard, Elk Creek, Fairview, and
Franklin townships, and Platea Borough in Erie County; and Monroe and
Conneaut townships in Ashtabula County.
District 2 — McKean, Washington, Waterford, and LeBoeuf townships, and
Edinboro Borough in Erie County.
District 3 — Amity, Union, Wayne, and Concord townships, and Elgin and
Union City boroughs in Erie County; and Spring Creek Township in Warren
County.
Robert Agnew
District 4
Roger Follett
District 3
District 4 — Beaver, Spring, Conneaut, Summerhill, Summit, Sadsbury, and
Pine townships, and Conneautville Borough in Crawford County; and Richmond and Pierpont townships in Ashtabula County.
District 5 — Cussewago, Hayfield, Venango, Cambridge, and Woodcock
townships, and Woodcock and Saegertown boroughs in Crawford County.
District 6 — Rockdale, Richmond, Bloomfield and Athens townships in
Crawford County.
Kathryn Cooper-Winters
District 5
Board Chair
Kim Docter
District 6
District 7 — Sparta, Rome, Oil Creek, Steuben, and Troy townships, and
Centerville Borough in Crawford County; and Southwest and Eldred townships in Warren County.
District 8 — East Fallowfield, Vernon, Greenwood, Union and Fairfield
townships in Crawford County.
District 9 — West Mead, East Mead, East Fairfield, and Randolph townships, and Blooming Valley Borough in Crawford County.
David Rectenwald
District 7
Board Vice-Chair
Bob Davis
District 8
District 10 — Wayne Township in Crawford County; Jackson, Plum, Oakland, Cherrytree, and Canal townships in Venango County; and French
Creek Township in Mercer County.
Safety is our core value
Larry Proper
District 9
Board Secretary
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Lanny Rodgers
District 10
NRECA Director
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NORTHWESTERN REC places the safety of our employees, our members,
and our community as the primary focus to direct and guide our actions.
The co-op has a Safety Committee that meets monthly to review any safety
incidents and to direct our employees’ efforts toward safe work practices at
work and at home.
In 2014, Northwestern REC had 18 safety incidents, four of which were
lost-work time incidents comprising 87 days of lost work time. Incidents
ranged from twisted knees to strained backs and minor fender benders.
Northwestern Rural Electric Cooperative, Inc.
What do the Declaration of
Independence, rural electric
cooperatives have in common?
WHEN BENJAMIN FRANKLIN signed the Declaration of Independence, he is credited with saying, “We must, indeed, all hang
together, or most assuredly, we shall all hang separately.” That
recognition of the need to work together may also be why
Franklin, in 1752, founded the first successful cooperative in the
United States, the Philadelphia Contributionship for the Insurance
of Houses from Loss by Fire, which still operates today.
The principles behind the Declaration of Independence that
form the basis of American democracy also form the basis of
cooperatives. A cooperative is owned and democratically controlled by the people who use its services. Each member has one
vote regardless of their stake; that is, some members cannot buy
more control than anyone else. This stands in stark contrast to
investor-owned businesses where only shareholders have a vote in
how the business is run; and even among shareholders, some
have more votes than others depending on their shares of stock.
The Declaration of Independence declared the equality of rights
of its citizens and that people had the right to organize to secure
their futures when their rights were infringed upon. At the time
the Declaration of Independence was written, democracy was a
pretty untested idea — but the founders of our country were
determined to make it work.
So when you celebrate the many liberties and rights we enjoy
with our families and friends this year, think about those principles that inspired the Founding Fathers. They also inspired the
pioneers who established electric cooperatives — folks who were
determined to provide safe, reliable and affordable power to
secure the futures of rural communities.
Northwestern REC has always operated under the principles of
democracy, and we are dedicated to fulfilling that promise as we
serve members today and in the future.
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Northwestern Rural Electric Cooperative, Inc.
Know the nominees
You and the other members at the Northwestern REC Annual Meeting elect your board of directors on a rotating basis. This year,
directors from Districts 3, 5 and 10 are up for election. Nominating meetings were held in each of the districts during April. The members
who attended these meetings nominated people they believed met the qualifications necessary to be a director of Northwestern REC.
The following biographical sketches will familiarize you with the candidates.
District 3 — Amity, Union, Wayne, and Concord townships, and Elgin and Union
City boroughs in Erie County; and Spring Creek Township in Warren County.
Michael Sample, District 3 nominee
Michael Sample
17495 Buffalo Road
Corry, PA 16407
Mike Sample has been a member of the Northwestern REC since 1994. He is the
owner of The Titusville Herald and The Forest Press of Tionesta, Pa. Mike is also a
co-owner of The Corry Journal, a family-owned local newspaper. As a business
owner in an industry that has experienced tremendous challenges, Mike adapts to
change very well. Mike graduated from Penn State Erie, The Behrend College, with
a bachelor of science degree in management in 1989. He has worked at daily and
weekly newspapers in Pennsylvania, New York, and Alabama, and has 30 years of
experience in the newspaper industry.
Mike has always called Northwestern Pennsylvania home. He is an active member of the Titusville Rotary Club, where his service includes cleaning up the community and helping decorate Titusville during Christmas. His dedication to helping the
area does not end there. Mike has served as the campaign chair of the Titusville
United Way and currently serves as the 2015 campaign vice chairman, helping raise
money through donation work for local nonprofit agencies.
In the past, Mike has helped regional businesses grow and prosper as a member
of the Titusville and Corry Area Chambers of Commerce boards. Mike loves sports
and giving back to the community, which is why he has also volunteered as a youth
baseball coach.
Mike and his wife, Debbie, and their children are members of Christ Our Hope
Parish in French Creek, N.Y. They live outside of Corry on their farm.
Roger Follett, District 3 incumbent
Roger Follett’s first term as Northwestern REC board director began in 1985. He
has fulfilled the requirements for National Rural Electric Cooperative Association
(NRECA) Director Certification. A co-op member for nearly 50 years, he has served
as supervisor and township auditor, and is a member of the Wattsburg Historical
Society. He graduated from Corry High School in 1949 and served three years in the
United States Air Force. In 1952, he returned home to take up farming with his
father. He continued dairy farming until 1978, when he went into the security field.
Follett and his wife, Janet, have four children, five grandchildren and one greatgranddaughter.
Roger Follett
12209 Follett Road
Corry, PA 16407
at the Annual Meeting
Saturday, August 1
Crawford County Fairgrounds
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Northwestern Rural Electric Cooperative, Inc.
Know the nominees
You and the other members at the Northwestern REC Annual Meeting elect your board of directors on a rotating basis. This year,
directors from Districts 3, 5 and 10 are up for election. Nominating meetings were held in each of the districts during April. The members
who attended these meetings nominated people they believed met the qualifications necessary to be a director of Northwestern REC.
The following biographical sketches will familiarize you with the candidates.
District 5 — Cussewago, Hayfield, Venango, Cambridge, and Woodcock
townships; and Woodcock and Saegertown boroughs in Crawford County.
Kathryn Cooper-Winters, District 5 incumbent
Kathryn Cooper-Winters, first elected to the board in 1988, is currently serving
her 15th year as board chair. She previously served as the board treasurer for 11
years and has met the requirements for NRECA Director Certification. She is the
board representative to the Allegheny Electric Cooperative, Inc. Board of Directors
in Harrisburg. She currently serves as the Allegheny Electric Cooperative, Inc. board
vice chairman, and has in the past served as board treasurer.
Cooper-Winters was employed by Northwestern REC as a communications specialist for eight years before working as a farm consultant with Agway, Inc. In 1984,
she set up her own accounting and tax business with her father, the late Jess G.
Cooper, a retired Pittsburg State University professor.
Since retiring after the 2008 tax season, Cooper-Winters has been spending more
time watching grandsons play sports and enjoying her hobbies of quilting and gardening. She is also a member of the Saegertown United Methodist Church, where
she serves on the Finance Committee. She also volunteers for the local food pantry.
Cooper-Winters is married to William R. Winters Sr. and has one son, five stepchildren, two grandsons and nine step-grandchildren. She has been a co-op member
for 30 years.
Kathryn Cooper-Winters
17197 State Highway 86
Saegertown, PA 16433
District 10 — Wayne Township in Crawford County; Jackson, Plum, Oakland,
Cherrytree, and Canal townships in Venango County; and French Creek
Township in Mercer County.
Lanny R. Rodgers, District 10 incumbent
Lanny Rodgers retired as a regional manager for the Pennsylvania State Employees’ Retirement System. He served in the United States Marine Corps from 1962 to
1966. He is a former director of the Franklin YMCA, and is an active member of the
Franklin BPO Elks Lodge No. 110, the Cochranton American Legion, and the
National Association of Watch and Clock Collectors.
Rodgers was first elected to the board of directors at Northwestern REC in 2000.
He has served as board vice president, and as Northwestern REC’s representative on
the Pennsylvania Rural Electric Association Board of Directors from 2005 to 2014.
He presently represents the Pennsylvania cooperatives on the National Rural Electric Cooperative Association board. He is also a Credentialed Cooperative Director
and Board Leadership Director. He also serves on the board of directors for the
Cochranton Area Redevelopment Efforts.
Rodgers and his wife, Georgia, have two children and five grandchildren. They
have resided in the Carlton/Cochranton area for over 30 years.
Lanny R. Rodgers
159 28th Division Highway
Carlton, PA 16311
at the Annual Meeting
Saturday, August 1
Crawford County Fairgrounds
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Northwestern Rural Electric Cooperative, Inc.
EVERY MEMBER HAS A VOICE.
EVEN THE ONES WHO CAN’T YET SPEAK.
As an electric co-op member, your household has a say in how the co-op is run.
Which helps you care for an even bigger family – your community. Learn more about
the power of your co-op membership at TogetherWeSave.com.
Northwestern Rural Electric Cooperative Association, Inc.
22534 State Highway 86
P. O. Box 207
Cambridge Springs, PA 16403-0207
1-800-352-0014
Emergencies/outages:
Northwestern REC fax:
1-800-474-1710
1-814-398-8064
www.NorthwesternREC.coop
Office Hours Monday-Friday 7 a.m. – 3:30 p.m.
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