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2014 AnnuAl RepoRt
15,160Electric Meters
2,285Average Monthly kWh
Use Per Member
3,357Miles of Power Line
februaryMonth of Maximum Demand
13,148Active Accounts
3.2Members Per Mile of
Power Line
49 Employees
64,097Maximum Demand in kWh
10,907Members
$776,500Capital Credits Returned
to Members
292Twitter Followers
319Facebook Likes
about Your CooperativeTri-County Electric Cooperative (TEC) was organized in
1936 by members because investor-owned and municipal-owned utilities would not extend electric service to rural areas because it wasn’t deemed profitable.
TEC is a distribution cooperative, which means it distributes electricity to homes, farms and businesses. Dairyland Power Cooperative, of La Crosse, Wis., is a generation and transmission (G&T) cooperative. It generates and purchases all the electricity TEC needs for its members.
The cooperative serves the rural areas of Fillmore, Houston and Winona counties and some areas that border those counties. It owns electric distribution systems and provides service to the cities of Brownsville, Canton, Fountain and Houston.
The cooperative is unique in several ways:• TEC has wholesale power contracts with nine
municipals: Caledonia, Eitzen, Harmony, Lanesboro, Mabel, Peterson, Rushford, Spring Grove and Whalan. This means TEC provides electricity through a special arrangement with Dairyland to each city’s own distribution system.
• TEC is a one-third owner of a utility-grade solar generating system. Few electric cooperatives own generation.
• TEC worked with others to create a business model for non-profit utilities, like itself, to build and own community solar generation systems. The business model for Renewable RaysSM is now being used across the country.
• TEC is a member of the Southern Minnesota Energy Cooperative that is awaiting final approval from the Minnesota Public Utilities Commission to acquire Alliant Energy’s Minnesota electric distribution system. It is rare for electric cooperatives to have the opportunity to purchase investor-owned service territory.
Fillmore Co. Houston Co.
Winona Co.
DISTRICT 1 DISTRICT 2
DISTRICT 3Olmsted Co.
Mower Co.
Howard Co. Winneshiek Co. Allamakee Co.
2014 Stats
Rushford Headquarters
Caledonia Outpost
Harmony Outpost
Spring Valley Outpost
Official Meeting Notice
Call to Order and Meeting Rules .............................................................Jennifer Scharmer, chairInvocation ..................................................................................................Ron Stevens, vice chairNational Anthem ................................................................... Glen Jensson, system administratorMeeting Notice and Proof of Mailing .........................................................Roger Hegland, secretaryAnnouncement of Quorum ...................................................................... Jennifer Scharmer, chairIntroduction of Board, Asst. Secretary, CEO and Attorney ......................Jennifer Scharmer, chairIntroduction of Guests .................................................. ………………………Ron Stevens, vice chairApproval of Annual Meeting Minutes .......................................................Jennifer Scharmer, chairReport of Nominating Committee ...............................................John Langowski, committee chairIntroduction of Director Candidates .............................................................. Skip Wieser, director Director Election Results ............................................................................. Dan Berndt, attorneyTreasurer’s Report ................................................................................. Roger Hegland, treasurerPresident/CEO Report and TEC Financial Overview ................... Brian Krambeer, president/CEOQuestions from the Membership ................................................ Brian Krambeer, president/CEOUnfinished Business .............................................................................. Jennifer Scharmer, chairNew Business ........................................................................................ Jennifer Scharmer, chairAdjourn ..................................................................................................Jennifer Scharmer, chairDrawing for Prizes...............................Ted Kjos, vice president of marketing and external relations
Tri-County Electric Cooperative’s Annual Meeting will be held Wednesday, April 22, 2015, at the cooperative’s headquarters at 31110 Cooperative Way, Rushford, Minn. Registration begins at 6 p.m. with coffee and cookies served. The one-hour business meeting starts promptly at 7 p.m. The official order of business at the meeting is as follows:
Roger HeglandPeterson, Minn.
District 1
Beth OlsonLewiston, Minn.
District 3
Don PetersenHokah, Minn.
District 2
Jeffrey RedalenFountain, Minn.
At-Large
Jennifer ScharmerWinona, Minn.
District 3
Ron StevensPreston, Minn.
District 1
Al “Skip” Wieser, IIILa Crescent, Minn.
District 2
Co-op Members Representing YouTri-County Electric Cooperative’s Board of Directors
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our vision
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The year 2014 will be remembered by members of Tri-County Electric Cooperative (TEC) as a time of positive change resulting
from strong leadership. As you will read in this annual report, the cooperative made strategic moves to accomplish great things that benefit members today and for years to come as we prepare for the next generation of power.
This strong leadership starts with our democratically elected board of directors. Directors are members of the cooperative who represent your interests and provide long-term direction. The direction of the board branches out into the dedicated and committed employees who run the critical day-to-day operations to keep your lights on and manage the business of your electric cooperative. Together, we hold true to our vision of being the model of efficiency and quality member care and are proud to report our successful year to the membership in this annual report.
UPDATE ON INNOVATIVE
VENTURES
The electric industry in Minnesota, Iowa, the Midwest, and all across the United States is in a period of transition. An abundance of natural gas, increased competitiveness of distributed generation, increasing environmental regulations targeted at coal generation and emerging technologies are all creating a tremendous amount of excitement. We are seeing a new generation of power.
Jennifer Scharmerboard chair
Brian Krambeerpresident/CEO
our visionFossil Fuels
88%
Renewables12%
Dairyland Power Cooperative, TEC’s wholesale power supplier, continues to add renewable energy sources to its generation mix. About 12 percent of Dairyland’s generation resources come from renewable energy. Dairyland is well on its way to meeting the Minnesota mandate of 25 percent renewable energy by 2025. A gradual addition of renewable resources helps make sure electricity remains reliable and affordable. Dairyland’s current list of renewable resources includes biomass, hydro, landfill gas, solar and wind.
Generation Mix
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Minnesota three
Fast FactsMinnesota Three contains 1,880 modules, each 275 watts. The 517 kW array is projected to generate about 682,000 kWh a year which is enough to power approximately 60 homes.
Electric cooperatives, like TEC, have traditionally been leaders of innovation and change in the utility industry. But even as the cooperative looks for advanced ways to serve its changing membership, decisions continue to hinge on three basic needs. Electricity needs to be safe, affordable and reliable.
TEC was involved with three projects in 2014 that have brought national attention. You may say that we took the Sixth Cooperative Principle, Cooperation Among Cooperatives, to a whole new level.
Minnesota Three. As the owners and developers of Minnesota Three, a 517-kilowatt (kW) solar array, Freeborn-Mower Cooperative Services (Albert Lea), People’s Energy Cooperative (Oronoco) and TEC turned the tables on tradition. Dairyland Power Cooperative, of La Crosse, Wis., issued a proposal request for a solar generator. The three co-ops worked together to submit a bid and history was made. Dairyland Power, our power supplier, will purchase all the power generated (enough to power about 60 homes a year) for the next 10 years. In the end the
Minnesota Three was awarded a $385,000 federal grant in 2013 through the U.S. Department of Agriculture’s Rural Energy for America Program (REAP) to assist with the cost of construction. At the time it was one of the largest solar REAP grant awards in the entire U.S.
Minnesota three30
60
90
120
150
2008 2009 2010 2011 2012 2013 2014 YTD Planned2014-2017
Tota
l Cap
acit
y in
Meg
awat
ts Cumulative growth of cooperative-owned and purchased solar capacity by year from 2008 to 2014 across the U.S. From 2014 to 2017, co-ops plan to add a total of 144 megawatts of solar capacity. Source: NRECA Strategic Analysis, Oct. 2014.
Co-op Owned and Purchased Solar Capacity
Pictured below, co-op CEOs participate in a ribbon-cutting ceremony for Minnesota Three. From L-R are Jim Krueger, Freeborn-Mower Cooperative Services; Brian Krambeer, TEC; Bill Berg, Dairyland Power Cooperative; and Elaine Garry, People’s Energy Cooperative. Also provided is a birds-eye view of the utility-grade solar generation site, Minnesota Three.
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Community solar capacity
General solar capacity
Planned community solar capacity
Planned general solar capacity
Photo credit: Dairyland Power Cooperative
Photo credit: Dairyland Power Cooperative
renewable rays
Renewable RaysSM was built because members were interested in having local access to renewable energy,
construction of Minnesota Three is a good fit for our power supplier and our members. It is also one of the few situations in the upper Midwest where distribution cooperatives own generation.
Renewable RaysSM. It is no secret that members of the cooperative are interested in renewable energy. While some members may think our community solar project sprung up quickly, it was really years in the making. Electric cooperatives don’t qualify for tax credits that make solar attractive to investor-owned utilities. Calls to the National Rural Utilities Cooperative Finance Corporation (CFC) led to additional assistance from the National Renewable Cooperative Organization (NRCO). The final piece was finding an investor, and that role was filled by Federated Rural Electric Insurance Exchange. The
process took about three years to complete. The result is a 180 module, 73.8 kW solar array that generates enough electricity to power about nine homes a year. Renewable Rays has been generating electricity for less than a year and is nearly fully subscribed. The business model used to create Renewable Rays is now being used by electric cooperatives across the country.
Alliant Energy acquisition. For more than 10 years TEC has approached Alliant Energy, requesting consideration to acquire their electric service territory that overlaps areas of our cooperative’s service territory. TEC joined with 11 other electric cooperatives to create Southern Minnesota Energy Cooperative (SMEC) and reached a definitive agreement with Alliant Energy to purchase their entire Minnesota electric service
renewable raysRenewable Rays has
180 modules. Each moduleis 410 watts.
This project helps save86 tons in carbon emissions
per year.
The array is 73.8 kW.It is projected to generate
106,635 kWh a year,which is enough to power approximately 9 homes.
Above: A group of TEC employees, directors and members gather for a ribbon-cutting ceremony for Renewable RaysSM.
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the Cooperativeadvantage
There’s one energy source that co-op members can always depend on — the hard-working dedication and efficiency of your lineworkers. TEC employees like Dean Stoa, pictured here, take great pride in providing members with reliable electricity.
territory in 2013. The transaction is pending approval by the Minnesota Public Utilities Commission (MPUC).
We anticipate the MPUC to take action soon. If successful in obtaining approval, we can begin the integration process that has been worked upon diligently over the past 18 months to ensure a seamless transition. At that time, TEC will increase its membership by 2,500 accounts, which will include the cities of Lewiston, Stockton, Wykoff, Fillmore, Ostrander, Racine, Utica and the southern third of Chatfield.
It is quite rare for electric cooperatives to have opportunities to purchase service territory. This is a once-in-a-lifetime opportunity to grow and increase the efficiency of our electric cooperative and extend our high-quality service to our new members.
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DESIGN For more than a century, electric
utilities have relied on the affordable, reliable system of large-scale, central-station power generation to meet the demand of consumers. At this time, there isn’t an affordable way to store electricity. So, it needs to be generated as quickly as it is needed. The amount generated changes throughout the day as demand fluctuates. With central station generation, electricity is generated at large power plants (by generation and transmission utilities) and transmitted over high-voltage transmission wires to the electric distribution utilities, like TEC.
While this has served electric utilities well for generations, changes in energy policies and technological innovations are beginning to change how electricity is generated and
the Cooperativeadvantage
SIOUX VALLEY
NOBLES
FEDERATED
SOUTH CENTRAL
REDWOODBROWN COUNTY
BENCO STEELE-WASECA
MINNESOTA VALLEY
FREEBORN-MOWER
PEOPLE’S
TRI-COUNTY
JORDAN
SLEEPY EYE
ST. JAMES
JACKSON ALBERT LEAWORTHINGTON
COLMAN
CLEMENTS
MANKATO
RUSHFORD
ORONOCOOWATONNA
SOU
TH D
AK
OTA
WISCONSIN
IOWA
SMEC MEMBER COOPERATIVES
ALLIANT ENERGY TERRITORY
WhAT MAkES AN ElECTRIC CO-OP DIFFERENT?
Locally owned and operated. Electric cooperatives belong to the members they serve and focus on members’ needs and local priorities.
Looking out for you. The cooperative business model guarantees every member a voice in the business decisions. Members know they can trust their cooperative, because it was created not to make profits, but to deliver on this promise: providing safe, reliable and affordable electricity.
Responsive to local needs. Electric cooperatives are located in the communities they serve. They work hard to achieve a better quality of life for member-owners.
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distributed generation
5
10
15
20
25
30
35
40
2007 2008 2009 2010 2011 2012 2013 2014
100
200
300
400
500
600
700
800
2007 2008 2009 2010 2011 2012 2013 2014
This graph shows the number and type of distributed generation systems that are interconnected with distribution cooperatives that are members of Dairyland from 2007 to 2014.
Dairyland System Totals for Distributed Generation
This graph shows the number and type of distributed generation systems that are interconnected with TEC’s electric distribution system from 2007 to 2014.
TEC System Totals for Distributed Generation
TEC is seeing growth in distributed generation owned by members like this solar array on a shed at Featherstone Farm.
Photo credit: Featherstone Farm
transmitted, including more on-site wind and solar generation. At TEC we are seeing growth in distributed generation owned by members. To prepare for these types of changes, TEC is reviewing its rate structure, which primarily relies on the model of central station delivery. Your cooperative is very supportive of renewable energy and is actively investigating new options to retain ownership of generation resources as a distribution cooperative.
Each year TEC undertakes a cost of service study to review rate structures. Your board continues to support a rate structure that is fair, balanced and that will serve us well for years to come in a rapidly changing industry.
COMBINING RESOURCES
For over a decade, TEC has worked directly with our neighboring electric cooperative to the south, Hawkeye REC, of Cresco, Iowa. We’ve helped each other in storms, created a vegetation management program together, launched an engineering company and completed group purchases to save on the cost of supplies. Over the past six years we have had a shared manager, and through this arrangement we have identified more efficiencies and more operating similarities. During January 2015, the board launched into a more formal process to discuss combining resources. It is being considered to create a better, stronger cooperative for the future that will provide better service and stable electric costs to its membership.
It is the goal of each board to continue
to diligently study this issue, analyze the opportunities and challenges for the membership now and in the future, and if deemed to be favorable the proposal would then be brought to the membership for a vote.
MOVING AhEAD
While some utilities are first considering automatic meter reading, your cooperative is preparing for the next generation of smart meters. Utilities across the country are contacting us to learn about our community solar project, we’re looking forward to planning our next 250 kW utility-grade solar array and considering consolidation to create an even better and stronger member-owned electric cooperative.
As we think about the challenges that face electric cooperatives, we are reminded how we’ve persevered through so many challenges over the decades. With strong leadership, we have no doubt that we can navigate these issues and do what’s best for the members as we embark on a new generation of power. We are here to power the lives of our members and to empower the communities we serve.
Thank you for your support of your electric cooperative.
Brian Krambeer Jennifer ScharmerPresident/CEO Board Chair
distributed generation
Solar
Wind
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BOARD DIRECTOR
ElECTIONS
Jenny Scharmer owns and manages a small business and family farm with her husband and five children. Prior to owning her business, she worked as a human resources manager for Watlow Manufacturing. She has been a member of TEC for 24 years.
Scharmer has served on the board since 2006 and is the board chair. She also serves as TEC’s director on Dairyland Power Cooperative’s board and is chair of the Minnesota Rural Electric Cooperative’s Resolutions Committee. She is a Credentialed Cooperative Director and has a Board Leadership Certificate from the National Rural Electric Cooperative Association.
“We will need to continue to focus on controlling costs, meeting the changing needs of members, engaging in political conversations and strategically planning for the next generation while maintaining affordable electric rates,” Scharmer says. “Innovative problem solving and the ability to
network and collaborate with others to reach common goals will be essential. All of these issues should be addressed with careful consideration of the economic, political, and environmental concerns that surround us today and into the future.”
Scharmer says she wants to see the co-op continue to provide outstanding quality service with affordable rates while maintaining superior fiscal responsibility and long-term stability. While serving on the board, Scharmer says she has gained insight on the vision needed and a common sense business approach that is necessary for the cooperative’s continued success.
“I’m very dedicated to the members and will continue to take an active and progressive leadership role,” says Scharmer. “Owning my own business provides me with the time and flexible schedule to be devoted to the cooperative.”
Jennifer Scharmer, Incumbent, 24690 County Rd 15, Winona, Minn.
Anne Snow is a founder of the Children’s Museum of La Crosse and currently serves as its executive director. Her husband and four daughters live on a small horse farm. She has been a member of TEC for 10 years.
Snow has held several leadership roles which include: chair of the Mayo Community Advisory Board; youth exchange officer and past president of the La Crosse Rotary Club; board member of the Western Early Childhood Education Advisory Board; and Secretary of PEO-Chapter AL.
“Educating members on energy issues, discussing changing energy demand and examining the mix of reliable and sustainable energy that will work for the cooperative and its members are important issues,” Snow says.
As a board director Snow would contribute 18 years of experience in community engagement and management. She brings the viewpoint of being an energy customer in five states she has previously lived. Her family owned a radio station and she learned early on about power because if the station went off the air it was lost revenue. She learned the value of electricity at a young age and it has continued to be an area of interest.
“Because I report to a board of directors, I truly understand the role of a board in supporting the management team and establishing strategies to achieve goals,” says Snow. “I’ve always been heavily involved in the communities I’ve worked, but I would really enjoy serving the area where we live. I have other terms and commitments ending soon that would allow me the time to dedicate to the cooperative.”
Anne Snow, Challenger, 33769 Burns Valley Rd, La Crescent, Minn.
DISTRICT 3, SEAT #1
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Beth and her husband own a registered Holstein dairy farm, milking 70 cows and 90 head of young stock. In addition to managing the young stock and helping with field work on 400 acres, she is involved with the accounting, personnel management and financial operating decisions for the farm. She has been a TEC member for 33 years.
Olson has served one term as a TEC board director. She is a Credentialed Cooperative Director and is working towards attaining the Board Leadership Certificate through National Rural Electric Cooperative Association. Her other leadership positions include the Security State Bank Advisory Board and minority advisor for the Farm Service Agency for Winona County Committee. She is a member of the Holstein Association and a club member and past director of the Rochester Holstein Club. Their farm received the Winona County Conservationist of the Year award in 2006. Olson is the 24th Princess Kay of the Milky Way.
“Renewable energy sources have become an important issue for our future. With the increasing cost of wholesale power, we need to make sure electricity is safe, affordable and reliable,” Olson says. “Keeping up with technology is also important.”
After serving three years as a board director, Olson says she has a better understanding of what it takes to keep members’ best interests at heart.
“Being a dairy farmer, I know the importance of reliable and affordable electric power in our daily operation,” Olson says. “I’m very committed to the time and energy it takes to keep abreast of the many issues that come before the board of directors.”
Beth Olson, Incumbent, 19524 County Rd 14, Lewiston, Minn.
Dennis Meyer works as a vice president of Knitcraft Corporation where he has used his expertise in computer hardware and software systems for more than 30 years. As vice president he is responsible for all the company’s information technology matters, is a member of the executive management team, serves as trustee of the employee profit sharing trust and provides oversight of Croix Retail systems and technology.
Meyer has been a member of TEC for nine years. He has held several leadership roles including: 16 years on the Goodview City Council, Croix Retail Board, St. Croix Shop Board, Winona Area Chamber of Commerce Board (WACC), WACC Public Policy Committee, Minnesota State Colleges – Southeast Technical Emerging Technologies Committee and Executive Committee, TEC Advisory Committee and Knitcraft-St. Croix Foundation Board.
Meyer lists several important issues in the board’s future. “The cost of energy, territory expansion to gain efficiencies and continued development of energy sources are important,” Meyer says. “Also, develop a program to educate members on energy conservation with in-home visits to perform energy audits.”
As a board director Meyer would contribute his skills of experienced leadership, forward thinking technology, strong logic and decision making. Meyer sees the opportunity to serve on TEC’s board as a way to serve his community and give back.
“I strongly believe that to make a difference you need to be active in affecting change,” Meyer says. “I perform a lot of research in my current position and will use my knowledge and research ability to discover new technologies. I would bring new ideas and new energy to the board.”
Dennis Meyer, Challenger, 43035 John Adams Dr, Winona, Minn.
BOARD DIRECTOR
ElECTIONSDISTRICT 3, SEAT #2
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This is an abbreviated version of the minutes. A full version is available by request.
The 78th annual meeting of Tri-County Electric Cooperative was held at the cooperative’s headquarters at 31110 Cooperative Way, Rushford, Minn., on Wednesday, April 23, 2014.
Chair Jenny Scharmer called the meeting to order at 7:00 p.m. and declared the ballot box closed for the director elections.
Scharmer noted that the meeting would be conducted using the latest edition of the Modern Rules of Order and that member questions would be addressed later in the meeting with a time limit of two minutes per question.
Scharmer provided the welcome.TEC Director Ron Stevens gave the invocation.A moment of silence was observed for our troops serving
overseas. The National Anthem was sung by TEC employee Glen Jensson.
Secretary-Treasurer Roger Hegland read the due proof of mailing which indicated that notice of the annual meeting was mailed to each shareholder of the cooperative on April 7 and such notice was placed in members’ April 2014 monthly electric bills.
Scharmer reported that a quorum had been established with the registration of 84 members at the beginning of the meeting and 2,551 members who participated in the mail ballot election.
Scharmer introduced herself and others seated on stage: Vice Chair Ron Stevens, Secretary-Treasurer Roger Hegland, Director Don Petersen, Director Jeff Redalen, Director Al “Skip” Wieser, Director Beth Olson, President/CEO Brian Krambeer, Assistant Secretary to the Board Heather Larson, and Attorney Dan Berndt of Dunlap & Seeger.
Director Stevens introduced guests in attendance: Joseph Book, Arthur Friedrich, Bob Hoeffs and Eugene Miller from People’s Cooperative Services, Oronoco; Charles Frana, Darla Rance, Carl Reicks, Dennis Young, Dennis Ptacek, and Dean Fisher, Hawkeye REC, Cresco, IA; Chris Eide and Shari Johnson, Eastwood Bank; Richard Bjorlo, ACENTEK; Rob Polmberg, DPC; Gordy Elliot, Farmer’s Elevator; and Steve Sarvi, City of Rushford.
As customary in the past, Scharmer suggested that the reading of the minutes be waived since they were printed in the annual report and approved as presented. A motion was made, seconded and carried to waive the reading and approve the minutes as printed in the annual report.
Francis VanGundy, chair of the Nominating Committee, gave the following report: The Nominating Committee consisting of himself, Jenelle Larson, Stuart Dibley, Richard Karcher, Al Whitesitt and Robert Knutson met on January 21 and nominated the following candidates for the board of directors: Donald Petersen and Arlyn Frauenkron for the Houston County #1 director seat; Al “Skip” Wieser and Kathy Nelson for the Houston County #2 director seat; and Jeffrey Redalen, Dennis Meyer and Patty Highum-Moe for the at-large director seat.
Director Beth Olson introduced the director candidates. Attorney Dan Berndt announced the election results as follows:
Houston County #1: Don PetersenHouston County #2: Al “Skip” Wieser At-Large Director: Jeff RedalenThe proposed Bylaw amendments were also approved.Hegland gave the auditor’s report. President/CEO Brian
Krambeer reviewed the financial report. There was no need to approve the financial report since it had been audited by Eide Bailly, found to be correct and would be entered in the cooperative’s records.
Krambeer thanked the cooperative directors, director candidates, election and nominating committee members, the employees for a job well done and his family. He also thanked the membership for their interest in their cooperative by taking the time to attend their annual meeting. Some highlights from his report included:
• TEC’s mission is to deliver high-quality energy services at reasonable prices and maximize value to our members consistent with the wise use of resources.
• Challenges of new EPA regulations, along with the increase in wholesale power and provided a look back at the history of the rates/increases.
• Overview of Southern Minnesota Energy Cooperative. This acquisition gives us the density we need for growth. We will be able to offer our services to 2,500 new members.
• TEC provides resources needed to manage your bill. • Shared services and employees with other cooperatives.
Share an arborist, safety coordinator, general manager and a marketing manager. This provides cost savings.
• Overview of Renewable Rays, TEC’s community solar project. Many co-ops worked together to make it happen.
• Overview of Minnesota Three, a utility-grade solar array, owned by TEC, People’s Energy Cooperative and Freeborn-Mower Cooperative Services. Dairyland Power Cooperative will purchase the output.
• TEC will continue to promote energy efficiency, reinvest in its system, provide cost saving programs and incorporate solar into the generation mix.
• TEC strives and lives by its Vision Statement, that Tri-County Electric Cooperative is the model of efficiency and quality member care.
Krambeer solicited questions from members with no questions being asked.
Scharmer called for any unfinished business. There was none. Scharmer called for any new business. There was none.There being no further business, Scharmer declared the
business meeting adjourned at 7:44 p.m.Ted Kjos, vice president of marketing and external relations,
conducted the door prize drawings.
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The Balance Sheet and Statement of Operations and Patronage Capital were taken from complete financial statements which were audited by Eide Bailly, LLP, Sioux Falls, SD, who expressed their unqualified opinion on those statements. Copies of the complete financial statements, together with the auditor’s report, may be examined at the cooperative’s office.
—Roger Hegland, Secretary/Treasurer
ASSETS 2014 2013UTILITY PLANT
Electric Plant in Service $ 96,018,749 $93,032,777
Construction Work in Progress 414,807 490,846
Total $96,433,556 $93,523,623
Less Accumulated Provision for Depreciation
(26,895,597) (24,520,311)
Net Electric Plant $69,537,959 $69,003,312
OTHER PROPERTY AND INVESTMENTS
Investments in Associated Organizations $16,298,637 $15,240,681
Other Investments 354,981 366,992
Notes Receivable (Less Current Portion) 315,000 0
Total Other Property and Investments $16,968,618 $15,607,673
CURRENT ASSETS
Cash and Cash Equivalents $925,038 $516,253
Accounts Receivable (Less Provision for Uncollected Accounts)
4,098,929 3,852,977
Current Portion of Notes Receivable 48,011 36,285
Materials and Supplies on Inventory 998,941 821,170
Prepaid Expenses 143,307 112,529
Total Current Assets $6,214,226 $5,339,214
DEFERRED DEBITS
$2,001,690 $1,815,006
TOTAL ASSETS $94,722,493 $91,765,205
EQUITIES AND LIABILITIES 2014 2013EQUITIES
Patronage Capital $34,594,530 $32,678,105
Other Equities 6,041,359 5,599,065
Total Member Equities in the Cooperative $40,635,889 $38,277,170
LONG-TERM DEBT (less current maturities)
Federal Financing Bank Mortgage Notes $36,463,069 $35,567,683
Rural Utilities Service Loan 12,742,374 13,136,001
Rural Utilities Service Advance Payments (17,322,292) (17,363,771)
National Rural Utilities Cooperative Finance Corporation (Secured Promissory Notes)
5,161,558 5,543,481
CoBank 5,573,079 5,935,076
Total Long-Term Debt $42,617,788 $42,818,470
CURRENT LIABILITIES
Current Maturities of Long-Term Debt $2,175,000 $2,223,000
Line of Credit 2,800,000 1,800,000
Accounts Payable 2,888,214 3,339,911
Consumer Deposits 57,275 54,925
Other Current & Accrued Liabilities 1,673,317 1,611,253
Total Current Liabilities $9,593,806 $9,029,089
DEFERRED CREDITS
$1,875,010 $1,640,476
TOTAL MEMBER EQUITIESAND LIABILITIES
$94,722,493 $91,765,205
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STATEMENT OF OPERATIONS 2014 2013OPERATING REVENUE
$39,828,903 $37,473,694
OPERATING ExPENSES
Wholesale Power (paid to
Dairyland Power Cooperative)$26,136,208 $24,719,025
Distribution Expense (Operations) 2,257,579 2,059,578
Distribution Expense (Maintenance) 1,909,147 2,008,582
Customer Accounts Expense 577,883 498,101
Customer Service and Information Expense 486,707 483,581
Sales Expense 41,941 94,502
Administrative and General Expense 1,722,870 1,591,058
Depreciation of Utility System 3,524,281 2,925,619
Interest Expense on Debt 2,573,716 2,403,203
Other Deductions 18,187 23,994
Total Operating Expenses $39,248,519 $36,807,243
NON-OPERATING REVENUE
Interest Income $938,577 $623,104
Other Non-Operating Income 17,442 36,506
Generation & Transmission/Other Capital Credits 1,384,404 1,484,957
Total Non-Operating Revenue $2,340,423 $2,144,567
NET MARGIN
Net Margin Before Income Taxes $2,920,807 $2,811,018
Income Tax Benefit (Expense) (1,450) 16,634
Net Margin $2,919,357 $2,827,652
STATEMENT OF PATRONAGE CAPITAL 2014 2013Accumulated Patronage Capital
(Beginning of the Year)$32,678,105 $30,829,250
Transfer to Other Equities (102,572) (63,178)
Retirement of Capital Credits and Estates (900,360) (915,619)
Accumulated Patronage Capital
(End of the Year)$34,594,530 $32,678,105
2013-2014
FINANCIAlS
$5
$10
$15
$20
$25
$30
$35
$40
$45
2006200720082009
2010
20112012
2013
2014
2015
Budget
2005
$ M
illio
ns
Wholesale power66.6¢
Distribution Plant10.6¢
Operating Expenses7.3¢
Depreciation9¢
Interest6.6¢
Financial Trends
How Your Dollar Was Spent in 2014
Wholesale power costs
Other operating expenses
Next geNeratioN
of power16
Annually TEC sets efficiency goals
to create programs that help members
become more energy efficient. We’ve been
promoting the wise use of electricity long
before it became trendy. You may wonder,
“Why would an electric company offer
incentives for their customers to use LESS
of their product?” It is because TEC is not
like most businesses; we are a not-for-profit
cooperative. We are owned by the members
we serve. That means what is in YOUR best
interest, is in OUR best interest.
We continue to offer the decades old
standbys of load management, rebates,
paper checklists and employees with a
wealth of knowledge to help you make energy
efficient choices. Along with those we have
a website with an abundance of information.
Gradually we’ve added social media, online
tools and even downloadable phone apps to
assist the next generation of co-op members
in becoming more energy efficient. However,
the best made programs and tools only work
when members participate.
In the end our goal is to help educate
you through our monthly newsletter (available
by mail or email), website and social media
on energy efficiency programs and tools so
you can be more conscious of your energy
use and can implement changes to help keep
your electric bill affordable.
PROGRAMS & TOOlS
TO hElP YOU
Next geNeratioN
of power
PRSRT STDU.S. Postage
PAIDDPC
PO Box 626, Rushford, MN 55971
#450Spotlight on Excellence Entry Form
NRECA Voting Member Classification * Distribution Cooperative: 1-20,000 meters
Category * 7. Best Annual Report to Members
Entry Title * Next Generation of Power
I wish to receive Judges' comments onthis entry
No
Contact's Name * Brenda Tesch
Cooperative * Tri-County Electric Cooperative
Mailing Address PO Box 626 Rushford, MN 55971 United States
Contact's Email * [email protected]
Contact's Phone Number * (507) 864-7783
Name of entrant as it should appear onthe award (if given)
Is this the first time you've entered theSpotlight competition?
No
Entrant's Email [email protected]
Names of others (freelancers ororganizations) involved in the project, ifapplicable
Dairyland Power prints the publication
Describe your/the co-op's role in theproject *
We do all the writing, graphic design and layout ourselves usingInDesign.
Describe others’ role in the project(Reference outside sources of material,including templates; pre-existing Webtools and apps; information from outsidegroups, such as Straight Talk orTouchstone Energy; stock photos andmusic, etc.) *
Dairyland Power Cooperative prints and mails the publication. We doall the writing, graphic design and layout ourselves. We take our ownphotos. We use Fotolio as a service for purchasing royalty-freegraphics and photos. We use Illustrator for creating graphics andgraphs and Photoshop for editing photos.
Circulation or Number of People Reached * 10,800
Number of Attendees *
Project’s Budget * $6,000 includes printing & mailing
Target Audience(s) * Member, community leaders and elected officials
Project's Objective * The annual report provides a recap of the year. This year's theme wasNext Generation of Power so we highlighted our projects that relatedto the theme to remind our members of what we are doing on theirbehalf.
Restrictions/Limitations * None.
Describe why you chose this type of socialmedia and how you used it *
Provide a brief summary that states thepurpose of the event, how the programwas implemented, and results and howthey were measured *
Provide a brief summary that states thepurpose, how the program wasimplemented, and results and how theywere measured using the RACEframework. Each component has its ownword limit noted below.
Research *
Action *
Communication *
Evaluation *