2012-04-sremc-ar

A SUPPLEMENT TO CAROLINA COUNTRY

Cooperatives:Building A Better World

South River-0412 AR_Layout 1 3/12/12 3:04 PM

Board of Directors

South River EMC Board of

Directors back row: Carlton Martin,

George Williams, Glenn Riddle and

William E. Tew Jr. Front row: Kelly

Harrington, Mary Talley, Francis

Clifton, Laurie Chancy and William

B. Jackson.

page 2


Affordable. Innovative. Member Focused.

It’s hard to predict the

future, but one thing

seems certain -- new gov-

ernment regulations will

increase the cost of elec-

tricity.

We want to work with

you to keep your electric

bills AFFORDABLE.

We’re controlling costs

through INNOVATION,

and no matter what the fu-

ture holds we’ll continue

to put you, our members

FIRST.

Looking

for

You

OutFind our how we are looking

out for you www.sremc.com or

www.ourenergy.coop.

page 3


The past year flew by

quickly and was notable for

extreme weather events such

as an ice storm, tornado and

hurricane. Technology contin-

ues to play a large part in the

ongoing improvement of our

service to our members. How-

ever, despite the challenges

posed by Mother Nature, it

was also a year marked by

achievement and recognition

of success.

Mid-afternoon Saturday,

April 16 -- two days after the

annual meeting -- a series of

tornadoes tore through our

area leaving a large path of

destruction and narrowly

missing both of our offices. In

just a matter of minutes we

found ourselves with about

32,000 members without

electric service. Due to the ex-

perience of our employees,

hard work and commitment,

the restoration of electric serv-

ice was complete by the morn-

ing of Monday, April 18.

Crews from Aberdeen, Ashe-

boro and Shallotte joined the

efforts to replace 154 utility

poles that were uprooted or

snapped, to string countless

miles of lines and replace 68

transformers that had

been destroyed.

Then, August 27

brought a glancing blow

from Hurricane Irene.

This storm impacted a

total of about 5,000

members. After our

members all had power,

South River EMC sent

crews to assist Tideland

EMC in Pantego – a

coastal cooperative that was

more heavily impacted.

Weather extremes again

marked 2011 as an unusual

year. The months of October,

November and December,

members received credits on

their bills to reflect an offset

of fuel costs due to the

extreme heat and higher-than-

anticipated revenue. The total

of the credits was $1,455,494.

This combined with the capi-

tal credit retirement of

$2,699,985 means that South

River EMC returned $4.1 mil-

lion to members in 2011.

Last year we engaged in a

campaign to ensure we have

updated phone numbers and e-

mail addresses for our mem-

bers. We realize that over time

this information changes and

most members don’t think to

contact their utility with the

new data. This information is

vital to the launch of a new

Integrated Voice Response, or

IVR, system.

Our automated IVR enables

members to receive service

quicker while also being able

to make bill payments 24-

hours a day using a credit card

or e-check. Members can also

call and get information about

their account using the IVR.

The IVR allows our customer

service representatives to han-

dle more calls in a shorter

time span and gives you the

ability to choose from a menu

of options for service you

need so you are sent to the

proper department.

An outage management

system was added to comple-

ment the IVR, which not only

Executives’ Report

page 4


enables outage reporting

through the automated system,

but also gives updates of out-

age restoration. Once the out-

age is reported, the system

tells if the cooperative is

aware of the outage, if crews

have been dispatched and the

extent of the outage (if

known). You can also request

an automatic call-back once

power has been restored in

your area. This is especially

helpful for anyone who has

gone to stay with family or

friends until power is restored.

The outage management

system also interfaces with

our Web site so members can

see where outages are on our

system and how many mem-

bers are affected.

Both the IVR and outage

management system are linked

to phone numbers. When a

member contacts the coopera-

tive, the system asks for their

phone number and their ac-

count is immediately identi-

fied. We have also added a

mail remittance system, which

allows us to process payments

more efficiently. Currently, an

average of 12,300 credit card

payments are processed

monthly; of these, 33 percent

are made online, 22 percent

through the automated phone

system and 43 percent are han-

dled by customer service. The

new technologies have also im-

pacted the volume of mail we

receive monthly. In 2008, there

were 22,000 bill payments

mailed monthly. In 2011, that

number dropped to an average

of 10,000 payments made by

mail per month.

All of the technological ad-

vancements over the past few

years, coupled with our inter-

nal processes and a dedicated,

competent workforce, have

helped to make South River

EMC one of the best-run co-

operatives in the nation. This

claim is not biased, but based

on a series of factors consid-

ered in the Key Ratio Trend

Analysis, KRTA, compiled by

the Cooperative Finance

Corporation (see page 6).

The KRTA is based on five

years of data for 815 electric

cooperative systems across the

nation. The full KRTA in-

cludes 145 ratios segmented

into 10 categories. The cate-

gories vary from a base group

analysis, financials, revenue

and margins, sales, control-

lable expenses, fixed expenses,

total expenses, employees,

growth and electric plant

(facilities). The KRTA gives

cooperatives a comparison tool

by which they can measure

their performance within their

state, among similarly sized

cooperatives and against other

electric cooperatives as a

whole.

In many of these key areas,

South River EMC ranks in the

top 10 percent of cooperatives

in the country. Our financial

ratios indicate that we gener-

ate earnings adequate to meet

long-term interest payments

and to pay our debt. Addition-

ally, our long-term debt as a

percentage of our total assets

meets the national average and

is lower than both the North

Carolina average and the aver-

age of cooperatives of the

same size. South River EMC

retires (refunds) a greater

amount of capital credits to

members than the average co-

operative. Amazingly, South

River EMC has been able to

accomplish all of this while

maintaining a lower rate of

revenue per kilowatt hour

(kwh) sold than the national

and state averages.

As you can see, your coop-

erative is in good hands. The

employees are well-trained,

dedicated and competent, the

management is seasoned and

knowledgeable and the board

takes their fiduciary responsi-

bilities seriously – all because

we are looking out for you.

page 5


KRTA - Key Ratio Trend AnalysisBelow are several of the key operational areas where South River EMC exceled when

compared to 814 other electric cooperatives nationally. Each category compares South

River EMC to other cooperatives in NC, nationally and those of similar size.

CategorySouth River

EMCNationwide

North

CarolinaConsumer Size

Total kwh sold 853,674,000 284,611,000 528,396,000 1,044,324,000

Total Utility Plant

(facilities)188,619,000 66,307,000 148,225,000 201,381,000

Number of Employees 97 47 78 135

Equity as a percentage of

assets36.60 41.78 36.55 36.34

Annual capital credits re-

tired per equitay %2.43 1.99 2.92 2.02

Total revenue per kwh sold

(mills)98.07 100.25 109.33 98.07

Residential kwh sold per

total kwh sold (%)81.53 61.83 76.62 67.31

Total controllable expenses

per total kwh sold (mills)18.07 20.31 20.58 17.14

Total controllable expenses

per consumer ($)371.08 422.47 382.69 348.07

Power cost per total kwh

sold (mills)62.20 62.12 62.68 65.22

Fixed expenses per total

kwh sold (mills)81.65 79.00 84.11 80.73

Total operating expenses

per total kwh sold (mills)18.07 20.31 20.58 17.14

Total wages per kwh sold 7.37 10.59 9.46 7.92

Avg. consumers

per employee428.47 291.2 383.17 370.46

Annual growth in kwh sold

(%)12.29 4.80 8.36 8.42

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AssetsElectric Plant at Original Cost

Less Depreciation

Net Plant

Cash

Investments

Accounts Receivable

Materials and Supplies

Prepayments, Other Accrued Assets and Deferred Debits

Total Assets

LiabilitiesLong Term Debt - RUS, CFC

Consumer Deposits

Accounts Payable

Deferred Credits

Other Liabilities

Membership Fees

Patronage Capital Other Equities

Total Liabilities

Operating StatementOperating Revenue and Patronage Capital Expenses

Cost of Purchased Power

Distribution Expense Operations

Consumer Accounts Expenses

Customer Service and Information Expenses

Administration General Expenses

Maintenance Expenses

Depreciation Amortization

Taxes

Interest on Long Term Debt

Total Cost of Electric Service

Our MarginsOperating Margins and Patronage Capital

Non-Operating Margins

Other Capital Credits and Patronage Dividends

Total Operating and Non-Operating Margins

$188,619,290

43,825,433

$144,793,857

4,914,912

11,964,243

10,865,297

1,556,704

1,931,664

$176,026,677

$198,454,262

48,563,778

$149,890,484

5,139,238

13,866,548

9,898,845

1,714,931

2,017,080

$182,527,126

$82,268,975

2,317,884

9,904,664

1,617,720

18,483,856

76,295

61,357,283

$176,026,677

$89,426,052

2,520,079

7,044,761

2,100,535

18,566,113

73,010

62,796,576

$182,527,126

$86,707,527

56,617,558

2,554,343

3,449,202

1,907,444

3,265,070

4,246,790

5,939,166

2,766,461

4,377,532

$85,123,566

$89,603,794

59,053,069

2,431,626

2,700,393

2,217,020

3,605,404

4,876,022

5,974,743

2,954,937

4,673,579

$88,486,793

$1,583,961

366,778

1,236,713

$3,187,452

$1,117,001

446,524

1,363,048

$2,926,573

2010 2011Fin

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South River ElectricMembership Corporation


2012-04-sremc-ar

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