RURAL ELECTRIC COOPERATIVE, INC.
MINUTES OF THE 82nd ANNUAL MEETING OF THE MEMBERS
October 2, 2021
The 82nd Annual Meeting of the Members of Rural Electric Cooperative, Inc. was conducted virtually. Early registration was available from 10:00 a.m. until 2:00 p.m. on Thursday, September 30, 2021. A total of 399 members took advantage of early registration. On Saturday, October 2, 2021, 470 additional members registered for a total of 869 registered members at the 82nd Annual Meeting.
Determination of Quorum
REC has 6,321 members. Our bylaws require us to have 5% of our membership registered to constitute a quorum (5% of 6,321 is 316 required members.) The final count of members registered is shown by the “2021 Annual Meeting Registration” list which reflects a total of 869 members registered.
Notice of Proof of Publication and 2020 Minutes
It was acknowledged that the Annual Meeting Notice was published in six different area newspapers, as well as in REC’s monthly publication “Co-op Comments” and mailed to each member. The Official Notice mailed to each member also included an acknowledgment that the 2020 Annual Meeting minutes are posted on the REC website and the Official Ballot to vote for candidates to be seated on the Board of Trustees for each district.
President’s Report (Via REC’s Website)
President Gary Jones welcomed the membership to the 82nd Annual Meeting of the Membership. This year our plans were to have an in-person annual meeting but the Delta Variant of Covid increased the number of cases so we changed to another drive-through meeting. We appreciate everyone’s participation.
Mr. Jones stated this year was the most eventful in REC’s history. We had an ice storm in late October and early November, it brought one of the earliest ice storms ever experienced. The damage cost the co-op around one-half million dollars but that was minor compared to the Polar Vortex that occurred in February bringing two snowstorms and record cold temperatures that reached -18 degrees Fahrenheit and it stayed below freezing for 13 days. Because of the extreme cold and the shortage of natural gas, power prices skyrocketed to the highest gas prices ever seen in Oklahoma.
REC’s cost for power in February was close to $12 million dollars. The price REC had to pay for electricity was 30 cents/kwh and we sold it back to our members for about 10 cents/kwh. We still have about $8.5 million dollars in uncollected power costs but by using some reserved funds and spreading the cost over a number of years we will keep the impact of the monthly bills to a minimum.
Also, over this cold period we experienced rolling blackouts where certain circuits had their power cut off for about an hour. This didn’t last long and few consumers were affected. Our power supplier is busy making plans so that this situation doesn’t ever happen again no matter what the weather conditions. During all these conditions, REC’s employees performed well and kept the power flowing to our members. If you see one of our employees, you might want to say “thanks”.
Mr. Jones noted that it continues to be the goal of REC’s management, board and employees to keep the power flowing to our consumer members at the least possible cost while keeping the co-op financially strong.
CEO’S Report (Via REC’s Website)
Dusty Ricks, CEO welcomed the member consumers to the 82nd Annual Meeting of Rural Electric Cooperative. He stated on behalf of REC employees and staff that we are extremely disappointed that we are unable to have our annual meeting like we have had for the previous 80 years with the exception of last year’s meeting. As you know last year Covid 19 was rampant and we opted to do a drive-through registration and meeting. It was met with a great deal of success. Covid has presented some challenges this year so for the well-being of our members and our staff, we opted for a drive-through meeting again this year.
Mr. Ricks continued that last year we had 840 registered members and we hope to break that number this year. We will have the traditional “goodie bag” that everyone is accustomed to. The customers who register and turn in their ballots will receive a $25 credit on their electric bill, following the meeting 75 names drawn will receive a $75 credit on their bill with 3 additional members receiving a $500 credit on their account.
Mr. Ricks noted the manager’s report highlights the past year’s accomplishments and to look at the financial records. It also brought sadness, it was just a year ago that our long-time CEO, Dale Nye passed away from complications of Covid and in January another employee, Leonard Coffee passed away. Some events that occurred was an early ice storm in October with leaves still on the trees and we lost 50 poles. This storm came in on Monday afternoon and by Saturday of that week we had all our members electricity back on. Another storm, Polar Vortex hit us this past February with a snowstorm and below zero temperatures for two weeks making our energy use spike and the consumption of natural gas that we will be paying for in the future.
Mr. Ricks continued, as we look at some of the statistical data, most of you know that we buy our electricity from Western Farmers Electric Coop. I am proud to say that WFEC is very concerned about the environment and always looking for ways to purchase as much green energy as possible. In fact, they are utilizing more renewable energy sources; 21% is Wind Energy; 8% is Hydropower; 5% is Natural Gas; 2% is Coal; 1% is Solar and 63% is Purchased Power.
Mr. Ricks reported that out of our expenses, 64% goes for Purchased Power and 36% goes to Fixed Cost which is the cost of maintaining lines and providing customer services we provide. Our total plant value has grown to over $93 million which is up from $81 million just 4 years ago. As you can see we continue to make improvements to our system and continue to add customers as the value of our system is on the rise.
One number we are really proud is the equity ratio remains over 48%. There are two different types of accounts. 73% of our accounts are residential and farm with 27% being commercial and industrial. However, when you look at our revenue, 36% comes from residential and farm and 64% is commercial and industrial. As a rural co-op we are primarily residential in nature but the biggest percentage of our income comes from commercial and industrial accounts.
Mr. Ricks added that our Gross Receipts Taxes are taxes we pay in 6 counties in our service area which includes 15 schools that REC has paid $709,000 in 2020. Since 1947, REC has paid $18 million in Gross Receipts Taxes. Western Farmers Electric Co-op has paid an additional $940,605.72 to the schools in REC’s service area. Patronage Capital, also known as Capital Credits, are credits above the cost of doing business and assigned to our members. In 2020, REC assigned back $888,261 to its members and WFEC returned $387,065.
Mr. Ricks stated that Community Involvement is another thing REC does to take care of our communities. We are highly involved especially in our youth programs such as 4-H, FFA, civic organizations, little league. REC has programs that provides scholarships to seniors, Leadership Summit, Youth Tour and Energy Camp. As we all know, these kids are not just the future of our communities, but of our state and the nation. We also give grants to our local fire departments, and the tree giveaway is well received.
Operation Roundup is voluntary participation in which you round up your bill to the nearest dollar. At present, we have 843 accounts that are signed up. This money is used in REC’s service area for charitable purposes.
Our Acre program was organized in 1996 to support political candidates that support rural cooperatives. Being a member allows you to have a voice in helping elect state and federal officials.
Mr. Ricks concluded that on behalf of our employees at REC we want to say “Thank You” to our members who are always a pleasure to work with. Thank you to our nine Board members, who are dedicated to serving you and your co-op. We are proud of our 54 employees who are dedicated to keeping the lights on and providing affordable, dependable and reliable electric service to our members.
The Credentials and Elections Committee of Rural Electric Cooperative, Inc. met pursuant to the Bylaws, on October 2, 2021 at 7:30 a.m. in the REC Multi-Purpose Center, Lindsay, Oklahoma, with the following members present:
District 1 District 2 District 3
Roland Little Joe Terrell Kathy Ellithorp
Darrell Cheshier Jay Earp Lynn Watkins
Allan Carroll Eric Castner
The meeting was called to order by Dan Williams, Co-op Attorney. The following persons were elected officers of the Committee:
Chairperson: Joe Terrell
Recording Secretary: Kathy Ellithorp
Mr. Williams advised the Committee on the duties and responsibilities of the Committee. He also presented the proposed ballot and procedures for voting for Trustees by the membership at the Annual Meeting of the Members set for Saturday, October 2, 2021, at the REC Multi-Purpose Center. Early registration was set for Thursday, September 30, 2021 from 10:00 a.m. until 2:00 p.m.
On motion made and seconded and on vote, the ballot and procedures were approved.
The balloting by the membership was opened at 10:00 a.m. and closed at 2:00 p.m. on September 30, 2021 for early registration and re-opened at 8:00 a.m. and closed at 11:00 a.m. on October 2, 2021. All votes cast were examined and recorded by the committee members.
Mr. Joe Terrell, Chairperson gave a report on the Election of Trustees. Mr. Terrell stated that a total of 735 votes were cast. He then reported to the membership the results of the election as follows:
For Office 3, District 1 – Scott Christian 679 yes votes 31 no votes
For Office 3, District 2 – Johnny Harrel 665 yes votes 43 no votes
For Office 3, District 3 – Mark Finch 686 yes votes 24 no votes
From these results, Chairperson Earp declared the following persons were elected to the Board of Trustees of Rural Electric Cooperative, Inc. for a three-year term:
Office 3- District 1 – SCOTT CHRISTIAN
Office 3– District 2 – JOHNNY HARREL
Office 3– District 3 – MARK FINCH
The Minutes of the Meeting of the 2021 Credentials and Elections Committee reflecting the results of the Trustee election are attached to these minutes.
Immediately following the announcement of the election results, prize drawings were held. Each registered member received a $25 credit on their bill. The Credentials & Elections Committee drew for seventy-five (75), $75 gift certificates for electricity and for three (3) grand prizes of $500 gift certificates for electricity.
REC’s winners’ names will be posted on the company’s website, they will also be posted in the November Co-op Comments.
Dated this 25th day of October 2021