vvec cares

Power CircuitA supplement to Oklahoma Living

Volume 76 • Number 10 • October 2017

vvec cares2016 ANNUAL REPORT

GIVING BACK TO THE COMMUNITY

VVEC provides financial support to school systems in our service territory through the payment of gross receipts tax. The 2 percent gross receipts tax is collected from members’ monthly electric bills at the instruction of the Oklahoma Tax Commission. The amount of tax is distributed by the miles of electric line the co-op has in each school district. KAMO Power, VVEC’s wholesale power supplier, also pays gross receipts taxes. In 2016, VVEC and KAMO Power together paid over $1.7 million in taxes to area school systems.

PARTNERING WITH EDUCATION FOR A BRIGHTER FUTURE

Oklahoma Union OologahCaney Valley Owasso Collinsville Skiatook Bowring Nowata BarnsdallDewey Sequoyah Sperry Bartlesville CopanJustusAvantFoyilPawhuskaSouth CoffeyvilleClaremoreChelsea HominySand Springs Verdigris CatoosaPrueAndersonTulsaOsage Hills Inola Chouteau-Mazie

$107,781.7899,881.2998,799.3094,354.3373,427.7867,213.1264,981.1459,882.0458,197.8056,685.8151,706.0646,464.3746,186.5635,365.7229,984.4328,394.7626,830.5424,882.6823,176.6122,588.6022,267.5121,685.3120,177.7514,860.3814,119.1712,871.6110,840.1210,360.506,662.094,241.42

578.24

$1,255,448.82

$40,113.85

88,516.90

47,440.9142,741.23

34,229.99

37,301.44

36,672.34

93,771.6731,935.65

9,362.36

12,322.8016,430.39

$490,839.53

$147,895.6399,881.29

187,316.2094,354.33

120,868.69109,954.3564,981.1459,882.0492,427.7956,685.8151,706.0646,464.3746,186.5635,365.7229,984.4365,696.2026,830.5461,555.0223,176.6122,588.6022,267.51

115,456.9852,113.4014,860.3814,119.1722,233.9710,840.1210,360.506,662.09

16,564.2217,008.63

$1,746,288.35

School District VVEC KAMO Total

Corporate ProfileVerdigris Valley Electric Cooperative is:

• A distribution co-op providing electric service to residential, commercial and industrial consumers• Headquartered in Collinsville, Oklahoma• Incorporated October 24, 1938• Serves 36,351 meters; is Oklahoma’s third largest electric cooperative (based on the number of meters)• Maintains 4,778 miles of electric line• Serves members in Nowata, Osage, Rogers, Tulsa and Washington counties• Ninety-six employees cover the co-op’s more than 3,132-square-mile service territory daily• VVEC has warehouse and maintenance facilities in Nowata and Bartlesville, Oklahoma• A non-profit corporation wholly-owned by the members it serves• Governed by a nine-member board of trustees who are elected by members residing in the districts they represent• Trustee terms of office are for three years; three trustee positions are up for election each year

Power CircuitPower Circuit is published monthly by Verdigris Valley Electric Cooperative, Collinsville, Oklahoma for its members in Tulsa, Rogers, Washington, Nowata and Osage counties. Periodical postage paid at Tulsa, Oklahoma and other additional mailing offices. Subscription price is $0.21 per month.

POSTMASTER - send address changes to: Power Circuit,P.O. Box 219, Collinsville, OK 74021.

Volume 76 • Number 10 • October 2017

2 • Power Circuit • October 2017

STATEMENT OF NON-DISCRIMINATION

This institution is an equal opportunity provider and employer. If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form, found online at http://www.ascr.usda.gov/complaint_filing_cust.html, or at any USDA office, or call 866-632-9992 to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter to the U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington, D. C. 20250-9410, or by fax 202-690-7442 or e-mail at [email protected].

Do you remember buying groceries at a local market or shopping for building supplies at a mom-and-pop hardware store? Today, more and more of these locally owned businesses are being driven out by national retailers that tend to be generic and focused on profits rather than people. Yet Verdigris Valley Electric Cooperative (VVEC) is different. Your electric cooperative is locally owned and controlled. Our focus remains on our members and the local communities we serve—rather than profits. We genuinely care for our members.A member-focused tradition From the very beginning VVEC has existed for the people it serves. Prior to 1938, those living in rural Northeast Oklahoma lacked access to electricity. While urban areas enjoyed electric power, investor-owned utilities found it too expensive to build the power infrastructure out into the countryside. Power initially came to this part of the state when rural citizens banded together to form an electric cooperative. For the first time, those on farms and ranches enjoyed new opportunities and an increased standard of living—all afforded to them by electricity. The efforts of these co-op pioneers were solely about enhancing members’ lives and never about profits. Seventy-eight years later, our purpose remains the same: providing safe, reliable electric power to you at the best possible price. As it has from its inception, VVEC exists to improve the quality of life of our members. Since we have no interest in making a profit, we do not increase revenues above what is required to operate the business in a financially sound manner. This enables us to provide you with the most affordable electricity possible and to keep our focus on serving you. In 2016, we were able to return $500,000 of our excess

revenues to our members in the form of capital credit refunds. In addition, we provide programs like the Co-op Connections Card that make discounts available to you on local goods and services, such as prescription drugs. VVEC also offers energy audits and rebates on energy efficient heating and cooling units and other appliances to help you increase the efficiency of your home and save money on your electric bill.Caring for our communities One of the principles that guides the cooperative business model is, “Concern for Community.” Each year, VVEC demonstrates this concern by investing in a number of opportunities to benefit our local communities. In 2016, VVEC awarded 11 Rural Fire Department grants; these funds will enable local departments to purchase life-saving equipment, making our communities safer places to live. In May, VVEC employees gave of their time to serve at the Special Olympics of Oklahoma Summer Games. And in July 2016, after a severe storm caused widespread outages in Lake Region Electric Cooperative’s service territory, VVEC showed care for fellow Oklahomans by sending line crews to assist with power restoration efforts. VVEC believes it is important to invest in the next generations and does so by providing various opportunities for students. In 2016, VVEC awarded five Adopt-A-School grants. The funds given will allow schools and educators to purchase supplies and teaching aids they otherwise would not be able to afford, thus improving the quality of education for local students. With safety in mind, VVEC organizes demonstrations at local schools intended to educate students about electricity. In 2016, VVEC provided eight scholarships to local students: two high school juniors went on an

all-expenses-paid trip to Washington, D.C., as part of the cooperative Youth Tour program; two received scholarships to attend Energy Camp, a leadership-development camp for eighth-graders; and four others received funds for higher education. In addition, VVEC donated funds to support local FFA chapters. The cooperative difference VVEC’s care for our members and communities can be summarized by the phrase, “The Cooperative Difference.” The cooperative business model sets VVEC apart from the profit-oriented businesses that are prominent today. VVEC is—and will always be—100 percent locally owned by you, our members. Nine of your fellow member-owners make up VVEC’s board of trustees. You may run into them at the grocery store or sit in the stands with them at a football game. You can be certain that as they make decisions for the co-op, they have you in mind. More than a utility provider, VVEC is an engaged member of the local communities we serve. This is because VVEC truly cares.

VVEC CaresMANAGER’S MESSAGE

Power Circuit • October 2017 • 3

VVEC General Manager Alice Houston

VVEC 2016 Annual Meeting of MembersSaturday, October 8, 2016

The 78th Annual Meeting of Members of Verdigris Valley Electric Cooperative, Incorporated was held at the Robson Performing Arts Center, Claremore, Oklahoma, on the 8th day of October, 2016 at 11 a.m. after due and proper notice to the members as required by the bylaws of the Cooperative. John Hibdon, Trustee, announced there was not a quorum of members registered for the meeting and no official business could be conducted. The number of members required for a quorum was 1401. There were 256 members present.

Approved:

2017 Annual Meeting of Members Verdigris Valley Electric Cooperative, Inc.

The Annual Meeting of Members of Verdigris Valley Electric Co-operative, Incorporated will be held Saturday, October 14, 2017 at the Robson Performing Arts Center, 101 E. Stuart Roosa, Clare-more, Oklahoma. If a quorum is present, action will be taken on the following matters:

1. Reading of the minutes2. Reports of Officers, Trustees and Committees3. All other business which may properly come before the meeting or any adjournment thereof.

Dated this 14th day of September 2017.

Jack BogartSecretaryVVEC Board of Trustees

John HibdonPresidentVVEC Board of Trustees

Jimmy LambertSecretaryVVEC Board of Trustees

MINUTES OFFICIAL NOTICE


THE COOPERATIVE DIFFERENCEIn July 2016, Lake Region Electric Cooperative (LREC) headquartered in Hulbert, Oklahoma, experienced a widespread outage. Eighty percent of the co-op’s members were without power and more than 230 poles were broken. VVEC formed a mutual aid agreement with LREC and sent line crews to assist with power restoration efforts.

SERVICE AREA & BOARD DISTRICTS

Board of Trustees

Jim Brackett720-4531

Jack Bogart 371-9587

Vernon Lewis 341-5225

John Hibdon 847-2320

Jimmy Lambert 760-7029

Dennis Lenox 289-5961

Chuck Huerter 333-3107

Ken Howard 724-9965

Buddy McCarty 272-5134 or

272-5364

Alice HoustonGeneral Manager

Stephen Riley Corporate Counsel

District 1 District 2 District 3 District 4 District 5 District 6 District 7 District 8 District 9

VVEC bylaws provide for trustee elections following the annual meeting in a pe-riod no sooner than 14 days after the meeting and no later than 30 days.

District meetings will be held in November for Districts 1, 3 and 5, as indicated on the map to the left. Any mem-ber residing in these districts and meeting qualifications stipulated in the bylaws is eligible to seek election to the board.


Assets

Electric PlantLess DepreciationCash & Cash EquivalentsInvestmentsAccounts ReceivableMaterials & SuppliesPrepayment, Other Accrued Assets & Deferred Debits

Liabilities

Line of CreditLong Term DebtConsumer DepositsAccounts PayableDeferred CreditsOther Liabilities

Membership FeesPatronage Capital, Other Equities

Costof Power

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Power Use by Type of Account

Residential 81% Industrial 12% Commercial 7%

62% Purchased Power

14% Distribution Expense

4% Interest

6% Administrative Costs

4% Services

2% Taxes

8% Depreciation

CONSOLIDATED BALANCE SHEET

TOTAL $163,705,897

TOTAL $163,705,897

$120,649,5951,063,325

31,015,9457,227,338

857,0202,892,674

-0-85,166,6283,267,0037,444,430

607,8133,134,194

849,13563,236,694

$163,609,08642,959,491

What We Own

What We Owe

Equities


Number of Meters

Peak Demand (kW)

Date and Time of Peak

Total Energy Sales (kWh)

Total Asset Value

New Plant

Total Revenues

Operating Margins

Total Taxes Paid

Long-Term Debt as Percent of Plant

Times Interest Earned Ratio (TIER)

2016

36,351186,584

07/24/2016 @ 6 pm 650,933,062163,639,89710,154,31469,171,979

46,8741,345,443

50.12% 2.55

2015

36,126187,780

08/09/2015 @ 6 pm653,413,245155,430,688

8,277,32265,359,623

451,1451,270,585

50.39%1.82

46,874213,641

2,411,171- 0 -

$2,671,686

451,145 113,106

1,818,400- 0 -

$2,382,651

2015$65,359,623

40,865,0352,626,0596,914,8222,185,056

232,5042,656,4085,206,3901,270,5852,912,681

38,938

$64,908,478

What We Received

How ItWas Spent

What WeHave Left

2016$69,171,979

42,790,198 2,803,6137,233,6342,446,695

228,0264,227,1225,383,8971,345,4432,656,987

9,490

Our Margins

Operating Margins & Patronage CapitalNon-Operating MarginsOther Capital Credits & Patronage DividendsExtraordinary Item

Operating Revenue and Patronage Capital

Expenses

Cost of Purchased PowerDistribution Expense - Operations Maintenance ExpenseConsumer Accounts ExpenseCustomer Service & Information Expenses Administration & General Expenses Depreciation & AmortizationTaxesInterest Expenses - Long Term DebtOther Interest & Deductions

The books and financial statements of Verdigris Valley Electric Cooperative, Inc. are audited each year as of December 31. An audit for the year ended December 31, 2016 has been completed by the firm of Briscoe, Burke, & Grigsby, LLP, Certified Public Accountants, Tulsa, Oklahoma.

Jack BogartSecretary-Treasurer, VVEC Board of Trustees

COMPARATIVE STATISTICS OF OPERATION

Total Cost of Electric Service

Total Operating & Non-Operating Margins


CONSOLIDATED COOPERATIVE SUMMARY OF 2016

$69,125,105

ORGANIZATIONS MUST PRESENT OFFICIAL REGISTRATION FORM

In order to be included in the Annual Meeting quorum count and to be eligible to vote, all commercial accounts, schools, churches, public buildings, and towns holding a membership with Verdigris Valley Electric Cooperative, must present an ORGANIZATION CERTIFI-CATE. Such organizations are encouraged to use the accom-panying registration form. This form indicates the bearer to be the official voting representative of the organization. The form must be completed in full and presented by the bearer at the time of registration at Annual Meeting.

BE IT RESOLVED THAT who is a member or officer of said organization, is hereby designated official representative by

to vote at the Annual Meeting of Members of Verdigris Valley Electric Cooperative, Inc., to be held on Octo-ber 14, 2017, and any adjournments thereof held within thirty (30) days of said date, on all matters which at said meeting of members may properly come before them; the action of said representa-tive and all that he or she may do in this behalf is hereby ratified and confirmed as the act of

(Name of organization)

(President)

(Secretary)

Image courtesy Google Maps

(Corporate Seal)

Bring your electric bill to

Annual Meeting forelectronic registration and you could win

one of three $50 bill credits!

9:00 a.m.Member registration

Coffee & donuts Registration gifts - VVEC cap

& mug and coaster set

9:00 a.m. - 10:45 a.m.Live entertainment - Paul Bogart

10:00 a.m. - 11:00 a.m.Free hot dogs, chips & soft drinks

11:00 a.m.Registration closes

Business session opens Prize drawings

Adjourn

Saturday, October 14, 2017 Robson Performing Arts Center101 E. Stuart Roosa Dr., Claremore

ORGANIZATION CERTIFICATE

ANNUAL MEETING SCHEDULE OF EVENTS


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