2015 Annual Report Choptank Electric Cooperative The Road to

The Road to Innovation
2015 Annual Report
Choptank Electric Cooperative
Letter to our Members
From the President and CEO
and the Chairman of the Board
The Road to Innovation
Did you know that the road to innovation is not just
in Silicon Valley but resides right here on the Eastern
Shore at Choptank Electric Cooperative? Most
people assume that the distribution of electricity
is the same as it was forty years ago, but this is not
the case. The Cooperative, the employees, and the
Cooperative Board are always looking for new ways to
be innovative.
We introduce new methods, ideas, and services for the
same reasons that we did when the Co-op was first
incorporated. We strive to provide safe, affordable,
and reliable electric service in the most efficient way
possible.
In many ways 2015 has been an innovative and
transitional year. For example, our new automated
metering infrastructure (AMI) initiative has been
highly successful. When someone’s house is sold or
a rental house changes hands we no longer have to
send an employee to get a meter reading. This allows
our field employees to perform other duties, and saves
money on gas and vehicles.
Our AMI system has indicated outages at individual
residences where the member was not at home.
Without AMI, we would not have known the power
was out, which saved members from food losses and
other inconveniences.
We now get reports on internal temperatures of
individual meters and voltage information daily that
allow the Co-op to solve many issues before any outage
has occurred. This saves members inconvenience
and allows the Cooperative to repair equipment
during normal business hours instead of nights and
weekends.
At Choptank Electric we continue to look for ways to
insure the safety of our electrical grid for both our
members and the public, and to keep the system safe
from outside intrusion. Cyber security is vital for our
future, and so we developed a working relationship
with Georgia Tech to determine vulnerabilities to
electronic systems. To improve safety for our key
infrastructure, we also installed state-of-the-art
cameras and enhanced our ability to remotely control
many of our field devices. During the year, we made
significant progress on a fiber optic network that
allows us to communicate to these devices, and to
our substations. The Vacuum Fault Interrupter (VFI)
cabinets Choptank Electric has been installing the past
several years have helped improve our automation
abilities and are safer for our crews. These innovations
help not only with security, but also speed up
restoration of power.
For several years Choptank Electric has utilized hybrid
vehicles, including a hybrid bucket truck. During
2015, we purchased our first extended range electric
pickup truck, affording us associated cost savings
and environmental attributes. While the electric
vehicle world is in its infancy, we expect it to grow
exponentially in the next five years. By participating
in this technology now, we will be ready to provide the
electricity our members need to power their vehicles
both at home and in key locations throughout the
Eastern Shore.
While these were big innovation projects, small
changes also benefit our members. During 2015,
we added a new feature to our online bill payment
system, SmartHub. Members can now report outages
with their SmartHub account using a mobile device,
tablet, or laptop. We also have added bar coding to our
inventory for better tracking capabilities which will
help the Co-op save time and money.
There are many paths that The Road to Innovation has
led us in 2015. Our Board of Directors and employees
are focused on innovations that will lead to better
member service, higher reliability, and provide the
lowest possible rates.
Respectfully,
The Board of Directors
Olin S. Davis, III
Chairman,
Kent County
Management
Michael I. Wheatley,
President and CEO
Robert P. Behlke,
Vice President of
Member Affairs
Todd R. Bireley,
Vice President of
Engineering Services
Paula J. Bishop,
Vice President of
Human Resources
Lisa H. DeSantis,
Vice President of
Corporate Services
W. Lance Lockerman,
Vice President of
Distribution Services
Jeffrey D. Rathell, Sr.
Vice Chair,
Talbot County
John J. Burke, Jr.
Secretary-Treasurer,
Cecil County
Robert E. Arnold
Queen Anne’s County
David W. Bruning
Worcester County
Francis A. Callahan, Jr.
Caroline County
Mission
Matthew R. Holloway
Wicomico County
Francis A. Ruffo, Sr.
Ocean Pines District
Douglas D. Scott
Dorchester County
Carl R. Widdowson
Somerset County
Choptank Electric
Cooperative exists
to provide reliable
and cost effective
electricity that
improves the quality
of life for our
member-owners.
We are committed
to service excellence
and guided by the
Seven Cooperative
Principles.
System Improvements for 2015
In 2015, Choptank Electric improved substations, replaced lines, completed fiber and underground cable
installation projects. Each project was carefully selected by the Cooperative for system-wide reliability.
The Ocean Pines Substation had a third transformer installed May 2015 to help serve the recent load growth in the Ocean Pines area. The
transformer was energized on September 29,
2015 and began serving members on October
12, 2015. The Ocean Pines Substation currently
serves approximately 9,200 meters.
Pictured right,
the St. Michaels
crew helped
create the oil
containment
system for the
Bloomfield
Substation. This
system prevents
oil from reaching
the wet lands
and navigable
water ways.
Pictured above, the Salisbury crews converting overhead lines to an underground cable installation during
a directional boring project at Barren Creek in Mardela
Springs.
Pictured left, Berlin
crews prepare
Sinepuxent Substation
for a second transformer
which is to be installed
early 2016.
Pictured left, Spring &
Associates, a local contractor for Choptank
Electric, performing
a directional boring
assignment for an
underground cable installation at the Sassafras River. This job was
difficult because the soil
compilation consisted of
sandstone and rubble,
unlike most of the shore
which is clay and sand.
This corridor previously
created many tree-related outages. This will
increase reliability for
our members located in
the Warwick area.
Pictured right,
the St. Michaels
crew swapping
out an old livefront cabinet
for a new VFI
(Vacuum Fault
Interrupter)
cabinet in Easton
Village. The
new VFI cabinet
will give System
Control access to
remote switches
and monitoring for faster
response times
during outage
situations.
The mission of our Vegetation
Management Program is to provide
safe and reliable electric to the Cooperative’s members using proven
vegetation management activities
such as tree trimming, tree removal,
mowing, and herbicide application
that conserve and enhance the vast
natural resources of the Delmarva
Peninsula that are touched by the
Cooperative’s maintained utilities.
Since May of 2003, all tree trimming and mowing operations have been performed by Asplundh Tree Experts
of Willow Grove, PA. In 2015, they trimmed 586 miles
of line, mowed 391 acres of land, removed 3,764 trees,
and also sprayed 569 acres of property with herbicide to
keep the areas contained.
Choptank Electric is a
Touchstone Energy Cooperative.
Touchstone Energy is the national brand that champions the value of the cooperative difference. Its mission is to
bring a strong local and national presence to electric cooperatives. The network is made up of close to 750 local,
member-owned electric cooperatives in 46 states. Since 1999, Choptank Electric has been a proud Touchstone
Energy Cooperative, and abides by Touchstone Energy’s four core values: Innovation, Integrity, Accountability, and
Commitment to Community.
Innovation for the Future
During
May 2015,
Choptank
Electric began
its Advanced
Meter Infrastructure
(AMI) deployment.
Choptank Electric is
proud to have a distribution system that has
been upgraded with the
advanced technology
necessary to continually
keep up with the daily
demands of our members’
electrical needs and increasing electric demands
on our system. As of December 14, 2015 we have
21,687 meters installed
system wide, representing
approximately 41% of our
distribution system.
Choptank Electric is proud to be working
towards using more renewable energy-based products.
Choptank Electric has had alternative fuel vehicles in our fleet since 2006, but the newest addition is our Extended Range Electric Truck which
is utilized in our St. Michaels District. This vehicle
can get up to 40 miles per charge. It has also been
operated as a mobile generator during outage
situations.
The architectural design and plans are by Davis, Bowen, and Friedel,
Inc. of Salisbury and it was contracted to Gillis Gilkerson Inc. of Salisbury,
MD. Choptank Electric will be seeking the distinction of being LEED Silver
certified.
Construction continued on the Regional Service Center, located in Salisbury,
throughout 2015. The harsh weather from January – April 2015 caused
many challenges for the construction team, and while the building has been
delayed from the original completion date of December 2015, Choptank
Electric expects the building to be completed by May 2016.
During the 2015 Annual Meeting, Choptank
Electric Cooperative gave away five Luck of
the Draw scholarships. These scholarships, worth
$1,000, are given to five randomly selected
members who are attending college in the fall.
The Choptank Electric Cooperative
Board of Directors voted to return
$2.4 million to its members during
December 2015. When members
sign up to receive electric service
from Choptank Electric, they
become a member of the Co-op,
not a customer. Co-ops return profits
to their members. The amount
received is based on how much
electricity the member purchased
during the retired year. The $2.4
million was paid to longtime
members who were part of the Coop from 1989, 1990, and 1991.
Communication
Commitment to
Community
The Choptank Electric
Trust is funded through
Operation Round Up,
a voluntary contribution program whereby
Choptank Electric
members can “round
up” their monthly bill
to the nearest dollar.
Those contributions are
given back to the local
communities via the Choptank Electric Trust Board.
In 2015, the Trust donated to many worthwhile causes. A few of those worthy endeavors included: the annual Electric Trust Scholarships, St. Vincent
de Paul, Maryland Food Bank, the Little Sisters of Jesus and Mary, Believe
in Tomorrow Children’s Foundation, and Farmers and Hunters Feeding the
Hungry. The Choptank Electric Trust has awarded over $3.4 million to the
nine counties of the Eastern Shore of Maryland since its inception in 2004.
The Co-op Connections Card offers our members more than 25,000 regional
and national deals on products and services, as well as over 100 local business
offers.
In addition to helping members save over
$500,000.00 on prescriptions alone, the
Co-op Connections Card also has “Healthy
Savings” discounts on dental care, vision,
hearing aids, lab work and imaging, and
chiropractic work.
A newly added feature to the Co-op Connections Card is the ID Theft Monitoring and
Resolution benefit. This new feature
provides our members the proactive
tools and recovery assistance needed
to quickly respond to an identity or
fraud crisis.
The Youth Tour program is a
national program sponsored by the
National Rural Electric Cooperative
Association (NRECA). Five eligible high
school juniors travel to Washington,
D.C., where they meet our U.S.
Representatives and Senators. The
students watch history come alive as
they explore the museums, memorials,
and monuments with over 1,500
students from all across the U.S.
Pictured right are our five Youth Tour
Representatives who traveled to D.C.
in 2015. The program is available for
high school juniors.
E-News is a growing communication
tool between the membership and the
Cooperative. Choptank Electric encourages
its members to sign up to receive the
monthly, informative, electronic newsletter
to stay up-to-date on Co-op news,
programs, and new technology.
Choptank
Electric has
been utilizing social media outlets since 2010. Social
media compliments the Co-op’s current
communication efforts with the membership. In October 2015, Choptank Electric
was pleased to add Instagram to its social
media outlets.
Our Outage Map offers members up-to-date
information during outage situations. Find
out where and how many members are
without power, estimated time of restoration,
and when crews have been dispatched.
SmartHub, the Co-op’s
online bill payment service,
is a great tool members can
use to pay their bills securely
online. In October 2015, the
Co-op added a new feature
called “Report an Outage.” This new feature
allows members who have a SmartHub account, to report outages using the SmartHub
App or their PC. Members are also given an
ETR, or Estimated Time of Restoration, once
they report an outage.
When the AMI deployment is complete, any
member who has a registered SmartHub
account will also have the ability to see their
daily usage and other important energy
data.
Choptank Electric Cooperative, Inc.
Statement of Operations
December 31, 2015 and 2014 (Note: The Statement of Operations for 2015 and 2014 are audited results.)
Income
1. Revenue 2015 $139,235,846
2014
$125,155,441
$83,916,332
$3,922,083
$7,063,831
$4,615,168
$8,666,660
$12,265,832
$3,339,870
$9,081,346
$290,864
$133,161,986
$80,312,741
$4,143,557
$7,034,859
$4,273,825
$6,542,149
$11,867,730
$3,168,300
$8,427,759
$354,720
$126,125,640
$6,073,860
$480,910
$1,111,390
$728,464
$8,394,624
($970,199)
$621,832
$827,453
$747,430
$1,226,516
Expenses
2. Purchased Power Cost
3. Operations Expense
4. Maintenance Expense
5. Consumer Account Expense 6. Admin & General Expense 7. Depreciation
8. Taxes
9. Interest Expense
10.Other Deductions
Total Expenses
Margins
11. Operating Margins 12.Non-Operating Margins 13.G & T Capital Credits 14.Other Cap Credits/Patronage Dividends Total Margins Real Estate & Personal Property Tax
County 2015
Caroline
$671,254
Cecil
$133,968
Dorchester $450,933
Kent
$204,614
Queen Anne’s
$188,689
Somerset
$241,833
Talbot
$300,829
Wicomico $404,205
Worcester $487,609
Total
$3,083,934
Cooperative Facts 2015
Purchased kWh from ODEC: 1,076,204,156 kWh
Purchased kWh from other sources: 1,145,943 kWh
Member average interruption time: 1.57 hours
(Major storm and power supplier outages removed)
Total calls received in Member Service Center: 80,061
Peak System Load (Winter): 2/20/2015
Load: 304,688 kW
Time: 7 A.M.
Peak System Load (Summer): 7/20/2015
Load: 235,411 kW
Time: 7 P.M.
Choptank Electric Cooperative, Inc.
Balance Sheet
December 31, 2015 and 2014 (Note: The Balance Sheet for 2015 and 2014 are audited results.)
Assets (What We Own)
2015 2014
1. Net Utility Plant 2. Investments 3. Cash 4. Accounts & Notes Receivable 5. Materials & Supplies 6. Prepaid Expenses 7. Other Current & Accrued Assets 8. Deferred Debits $281,808,017
$62,487,404
$127,384
$7,447,293
$10,498,485
$1,992,836
$14,077
$33,016
$266,245,712
$60,774,911
$2,074,700
$5,910,562
$7,654,846
$2,280,944
$15,165
$1,085,222
$364,408,512
$346,042,062
$192,505,496
$14,420,437
$9,583,879
$2,561,637
$8,867,813
$3,606,587
$2,101,161
$10,520,117
$185,045,742
$9,251,404
$10,664,022
$2,447,527
$8,039,343
$3,682,631
$2,454,533
$8,039,343
$244,167,127
$229,624,545
$384,455
$117,933,782
$1,923,148
$384,455
$113,045,773
$2,987,289
Total Members’ Net Worth $120,241,385
Total Liabilities/Net Worth $364,408,512
$116,417,517
$346,042,062
Total Assets Liabilities
9. Long Term Debt 10. Notes Payable 11. Accounts Payable 12.Consumer Deposits 13.Current Maturities Long-Term Debt 14.Other Liabilities 15.Deferred Credits 16.Accumulated Operating Provisions Total Liabilities Members’ Net Worth
17.Membership Fees
18.Accumulated Margins 19.Other Equities Meters
Residential 47,819
Com. & Ind.
4,861
Primary 25
Lighting233
Total: 52,938
2015 Electric Revenue By Rate Class (audited)
Residential
Commercial
Power Street Light Other Total 2015 %
$99,630,80171.56
$28,632,68220.56
$9,023,756
6.48
$224,907
0.16
$1,723,701
1.24
$139,235,847
100.00
Choptank Services Corporation, Inc.
Balance Sheet and Income Statement
December 31, 2015 and 2014 (Note: The Balance Sheet and Income Statement for 2015 and 2014 are audited results.)
Income Statement Expenses
Interest Expense Professional Fees Miscellaneous Expense Total Expenses Other Income
Gain – Sale of Stock Dividend Income Patronage Capital – CoBank Income/Loss Investment Subsidiaries Total Other Income Net Income Balance Sheet
Current Assets
Cash Prepaid Office Expense Total Current Assets Other Assets
Investment in CoBank Investment in MACS Patronage Capital – CoBank Total Other Assets Total Assets Current Liabilities
Accrued Year End Expenses CoBank Line of Credit Payable to Choptank Electric Total Current Liabilities Equity
Investment from Choptank Electric Retained Earnings Net Income Total Equity Total Liabilities and Equity 2015
2014
$61,342
$20,483
$15,493
$97,318
$99,025
$36,102
$21,639
$156,766
$130,553
$169,000
$26,351
$165,410
$491,314
$393,996
$140,532
$167,200
$26,800
$242,156
$576,688
$419,922
2015 2014
$30,988
$110
$31,098
$22,870
$106
$22,976
$1,000
$3,462,049
$236,855
$3,699,904
$3,731,002
$1,000
$3,408,572
$230,267
$3,639,839
$3,662,815
$4,566
$2,000,000
$3,572
$2,008,138
$6,049
$2,327,898
$0
$2,333,947
$2,095,000
($766,132)
$393,996
$1,722,864
$3,731,002
$2,095,000
($1,186,054)
$419,922
$1,328,868
$3,662,815
Choptank Services Corporation is a wholly-owned subsidiary which owns 40.81% of Mid-Atlantic Cooperative Solutions (MACS). MACS provides multi-fuel
distribution services including propane and diesel oil, primarily to Pennsylvania and Maryland.
Cooperative Energy Information
Kilowatt Hour Sales
Average Residential Usage
(In Millions)
(Monthly)
2006
861.2
2006
1153
2007
957.3
2007
1202
2008
940.1
2008
1157
2009
938
2009
1152
2010
1000.4
2010
1230
2011
1002.1
2011
1222
2012
956.69
2012
1141
2013
970.7
2013
1179
2014
993.8
2014
1217
2015
1031.8
2015
1256
750
800
850
900
950
1000
1050
Meters Served
1000
1050
1100
1150
1200
1250
1300
Wholesale Power Cost
(Annually)
(In Millions)
2006
51,097
2006
62.8
2007
51,641
2007
76.2
2008
52,002
2008
80.5
2009
52,143
2009
80.3
2010
52,243
2010
77.5
2011
52,264
2011
76.8
2012
52,259
2012
76.1
2013
52,406
2013
72
2014
52,647
2014
80.3
2015
52,938
2015
83.9
50000 50500 51000 51500 52000 52500 53000 53500
50
60
70
80
90
Choptank Electric Cooperative, Inc.
P.O. Box 430
Denton, MD 21629
www.choptankelectric.coop
Toll-Free: 1.877.892.0001
Outage Reporting: 1.800.410.4790
Automated Member Service:
1.866.999.4574