BEC-AR-2016
- 1. Integrity Your source of power and information for 80 years. Accountability Innovation Commitment to Community A Touchstone Energy® Cooperative 20
- 2. W hen we first turned the lights on in rural America 80 years ago, a single light bulb in the kitchen was life-changing. Today, we have microwave ovens, dishwashers and smart refrigerators. Electricity has moved further from a luxury to more of a necessity. The next few decades will test the reli- ability and efficiency of the electric grid. Advancements in technology and increases in the number of electric vehicles on the road are likely to test the grid with altered and/or increased times of electricity use. This is particularly true in the trucking in- dustry, where transition to plug-in hybrids with electric drivetrains is underway today. Through the Take Control and Save program administered by our power sup- plier, Associated Electric Cooperative Inc., Missouri electric cooperative members have saved enough energy to power more than 96,000 homes for a full year. You, our members, have done your fair share to become more energy efficient. The energy industry is ever-changing. Evidence is found in data showing natural gas now exceeding coal in energy produc- tion. AECI has been heavily dependent upon coal for affordable and reliable energy for its member systems. As good stewards of the environment, AECI has voluntarily and responsibly explored alternate sources for generation. With two combined-cycle natural gas power plants and a capacity of 750 megawatts of wind power, AECI is setting a good example. In fact, AECI was named the Wind Cooperative of the Year in 2006 by the U.S. Department of Energy. Under no man- dates, an average of 20 percent of AECI’s total generation came from renew- able sources (wind and hydro) in 2015. March 2016 saw even better results, as wind and hydro power accounted for one-third of the generation mix. One windy day in March allowed nearly 50 percent of our energy to come from renew- able sources. Even with so many recent advance- ments in technology, we remain just as fo- cused on our mem- bers as we were 80 years ago. We’ve done our best to move ahead with new technology without sacrificing the personal touch, which you’ve come to expect. Our members value our commitment to maintaining personal interaction. Electronic convenience features have only accompanied, not replaced, your ability to have a conversa- tion with one of our representatives. Satisfaction among our members con- tinues to be high, as indicated in our 2016 American Customer Satisfaction Index survey scores. Our score of 86 places us at the top of the utility industry average and well above several service industry average scores. Thank you to our members for sharing your opinions about your coop- erative, and thank you to our employees for providing top-notch service. On behalf of our hard-working employees, we are honored to be of service to you — our members. - 2 - Message to Our Members Todd Culley CEO/General Manager Joel Bullard President Your electric cooperative employs hard-working and dedicated staff who work together for the benefit of you, our member. Thank you for proving that “hard work pays off” by giving us your feedback in our first quarter 2016 American Customer Satisfaction Index survey. Your opinion has landed us at the top of the utility industry average scores and above several other service industry average scores. Banks 76 Subscription TV service 63 Hospitals 74 Investor- owned utilities 74 Cell phone service 70 Airlines 71 B A N K *The numbers above represent American Customer Satisfaction Index (ACSI) results for the noted industry in 2015. Your electric cooperative employs hard-working and dedicated staff who work together for the benefit of you, our member. Thank you for proving that “hard work pays off” by giving us your feedback in our first quarter 2016 American Customer Satisfaction Index survey. Your opinion has landed us at the top of the utility industry average scores and above several other service industry average scores. Banks 76 Subscription TV service 63 Hospitals 74 Investor- owned utilities 74 Cell phone service 70 Airlines 71 B A N K *The numbers above represent American Customer Satisfaction Index (ACSI) results for the noted industry in 2015. Boone Electric Cooperative employs hard-working and dedicated staff who work together for the benefit of our members. Thank you for proving that “hard work pays off” by giving your feedback in our 2016 American Customer Satisfaction Index survey. Your opinion has placed us at the top of the utility industry average scores and above several service industry average scores. 86 A Touchstone Energy® Cooperative Voluntary and Open membership WIND/HYDRO 31% 34% 35% COAL NATURAL GAS AECI March 2016 Generation Mix AECI March 2016 Generation Mix
- 3. - 3 - Your Electric Cooperative Your Board of Directors About your cooperative Organized in 1936 by local people who helped electrify rural Missouri, Boone Electric was the state’s first electric cooperative. Today, 80 years later, Boone Electric continues to serve the people who own the coop- erative – you, the members. Boone Electric Cooperative is the ninth-largest electric co-op in Missouri. Headquartered in Columbia, Boone Elec- tric serves more than 28,000 homes, farms and businesses. The cooperative’s service area includes Boone County and parts of Audrain, Callaway, Howard, Monroe and Randolph counties. 2015 in review During 2015, Boone Electric delivered 543 million kilowatt-hours of electricity to its 31,390 active meters. The co-op added 420 active meters in 2015 and had an underlying growth rate of approximately 1.3 percent. The cooperative added 21 miles of new line, bringing the total to 2,960 miles, of which 999 are underground. With 31,390 active meters, Boone Electric has a density of 10.6 meters per mile of line. At the end of 2015, the total utility plant was valued at $102,618,161. The average investment per meter was $3,269. Last year, $2,332,015 in capital credits were retired for those members on Boone Elec- tric’s lines primarily in 1995,1996, 2013 and 2014. Total capital retired from 1937 through 2015 is $66,363,192. Last year marked the co-op’s first-ever trip to the International Lineman’s Rodeo. BEC linemen Tim Gilbert, Adam Smith, Chad Collard, Steve Baumgartner, Matt Tiemann, Jason Toalson, Jamie Conrow, Jeremy Wooden, Terry Vandegriffe, Josh Turner and Jim Miller traveled to Bonner Springs, Kansas, in October for the 32nd annual showcase of skills. Boone Electric also continued its commitment to electrifying the world in collaboration with the NRECA Interna- tional Foundation. Two BEC linemen, Ron Morse and Adam Bauer, spent three weeks in southern Haiti assisting in an effort to bring electric service to an underdevel- oped area of the small nation. Later this summer, the co-op will visit Bolivia, where an effort continues to electrify the South American nation. At least 25 percent of the Bolivian distribution system develop- ment has been supported by NRECA In- ternational funding and expertise. NRECA International has developed dozens of rural electrification projects throughout Bolivia since 1962. Democratic member control Boone Electric Cooperative Board of Directors (front row from left) Jay Turner, Kim Ponder, Karen Mc- Bride Kinkead and Glen Beckmeyer; (back row from left) Frank Glenn, Keith Schnarre, Wayne Wilcox, Joel Bullard and Nathan Martin (retired 2016).
- 4. - 4 - A Name You Can Trust Your Source for Power Your Source for Information Education training and information B oone Electric Cooperative has been your energy partner for 80 years, and we continue to pride ourselves on being your source for information on all things energy-related. From energy efficiency to electrical safety, and from renewable energy options to youth leadership opportunities, Boone Electric has been the name you can trust. Last year, nearly 20,000 electric coop- erative members across the country were asked what image attribute best described their electric co-op. “My co-op is a name I can trust” is the answer that beat out all others. Trust is earned, not given freely, and at Boone Electric Cooperative, we work every day to be the co-op you can trust – not only for power but also for information, great ser- vice, innovation, youth leadership and more. For the past 80 years, our goal has been to provide reliable, affordable and safe electric service to our members. Today, we serve more than 31,000 active meters with nearly 3,000 miles of energized line. On average, our members had power available to them 99.987 percent of the time in 2015. We’re upholding our promise to deliver reliable electric service to our members. Maintaining clear rights of way, which prevents tree limbs from interfering with power lines, has been one of the key fac- tors in reliable service. On windy days or during a storm, tree limbs can come into contact with a power line and cause blinks in electric service. If those limbs contact a line three times quickly or remain on the line, a power outage occurs. Wildlife is generally the most frequent cause of power outages. The installation of wildlife protection devices has helped reduce the number of blinks and interrup- tions in electric service. BEC crews continue to replace aging copper wire with aluminum-conductor steel-reinforced (ACSR) cable. This highly conductive, low-weight and less expensive cable is durable and strong. These efforts, along with others, will help us deliver reliable electric service for the next 80 years. Electric cooperatives abide by seven gov- erning principles, one of which states that we will provide education, information and training for members and employees. One manner in which we achieve this is through our member magazine — “Extra/Rural Missouri.” Each month, members are updated on current events at Boone Electric and industry news. Throughout the year, information is pro- vided to members about electrical safety, right-of-way maintenance, renewable en- ergy sources, energy efficiency, grassroots efforts and more. Boone Electric also reaches our members who are more inclined to use digital media for information. Social media platforms, such as Facebook, Twitter, Instagram, YouTube and Pinterest, are regularly up- dated. Follow us on one or all of the above platforms and stay in the know. Our monthly publication, “Extra/Ru- ral Missouri,” is also available in a digital format on the co-op’s website. The digital member magazine is interactive, featuring articles with video and/or audio record- ings, bringing stories to life. A Touchstone Energy® Cooperative
- 5. - 5 - Your Source for Great Service Your Source for Innovation Your Source for Youth Leadership cooperationamong Cooperatives Concernfor Community One characteristic setting cooperatives apart from other types of business is our attention to maintaining the personal side of service. From setting up new service with our member service representatives to consulting with an energy expert about your energy use, your interaction with BEC personnel has been and will continue to be customized to your individual needs. Unlike most types of businesses, your electric co-op assists you in using less of the product being sold. Our energy experts advise members on their energy use and conduct home energy audits to target and improve areas of inefficiency. In most cases, rebates are available to members for completing recommended improvements. Members who prefer to conduct busi- ness at our office receive the same personal interaction as members did 50 years ago. Member service representatives, like Terri and Joan (right), remain focused on pro- viding personalized service by listening to our members. Everyone who enters our lobby is greeted with a smile. The lobby is often filled with sounds of laughter and the sharing of stories between members and employees. It’s the cooperative difference. Your electric cooperative is committed to providing a cleaner, brighter future for our members. Boone Electric was the first elec- tric co-op in Missouri to offer members the ability to purchase energy from a re- newable source — wind power — through our Renewable Choice program. In 2015, your electric co-op’s Board of Directors voted to move forward with a community solar project. With the ad- dition of a 100-kilowatt community solar farm, Boone Electric members will be able to purchase the output in kilowatt hours from one or multiple solar panels. That output will offset the corresponding amount of energy consumed at the mem- ber’s residence. More information about this project is available on our website. BEC is also moving forward with the installation of an advanced metering infra- structure. The AMI system includes meters capable of providing two-way communi- cation. Benefits include an even quicker response to and decrease in the duration of power outages. Members will soon be able to monitor their energy use and make lifestyle adjustments to help save energy and money. Boone Electric remains committed to offering youth leadership opportunities. Each year in June, the cooperative sends four high school juniors on the trip of a lifetime with the Rural Electric Youth Tour. The young leaders join nearly 100 other students from Missouri and more than 1,500 from across the U.S. on a life- changing, week-long tour of Washington, D.C. In addition to visiting the memorials, monuments and museums, the students also visit with legislators and attend a leadership conference. Students selected as finalists but not attending the trip each receive a $500 scholarship. Up to six high school sophomores also have an opportunity to enhance leadership skills by attending the Cooperative Youth Conference and Leadership Experience (CYCLE). The award-winning confer- ence, held in Jefferson City each summer, educates students on the cooperative busi- ness model, state government, leadership and prepares those interested in pursuing Youth Tour the next year. Each year through the Boone Electric Community Trust, your electric co-op helps 13 students better afford college tuition. The scholarship program awards $2,000 to one graduating senior from each of the nine public high schools in our service area. Four at-large college students are also awarded scholarships. BEC reaches younger children through activities with Boone County 4-H and in the classroom, where electrical safety and energy efficiency education is presented to students. Two 2015 Youth Tour delegates, Brendan Fish (left) and Amanda Brush (second from left) pose with new friends they made from other parts of Missouri.
- 6. Cost of Power 56.3% 7.4% Depreciation 2.4% Taxes & Other 11.5% Operations & Maintenance 6.8% Interest Expense 6.8% Administrative & General Expenses 5.3% Consumer Account Expense 3.5% Operating Margins Financial Information How your dollar was spent Total assets Net investment in plant Total kwh purchased Meters billed Miles of line Full-time employees Meters per mile of line - 6 - 2015 2005 1995 $102,618,161 $72,022,408 $37,217,734 571,785,793 496,108,800 358,402,600 10.60 9.74 9.09 2,960 2,851 2,419.7 31,390 27,765 21,993 94 106 90 $138,155,270 $95,301,686 $56,785,519 2015 2005 1995 2015 2005 1995 2015 2005 1995 2015 2005 1995 2015 2005 1995 2015 2005 1995 Autonomy and independence As a member of Boone Electric Cooperative, You get the credit! When you signed up to receive electric service from Boone Electric Cooperative, you became a member of an electric cooperative. While investor-owned utilities return a portion of any profits back to their investors, electric cooperatives allocate excess revenue to members as “capital credits,” and retire — or pay — them when the co-op’s financial condition permits. A Touchstone Energy® Cooperative
- 7. Report on the Financial Statements I have audited the accompanying consolidated financial statements of Boone Electric Cooperative and subsidiaries, which comprise of the consolidated balance sheet as of December 31, 2015 and 2014, and the related consolidated statements of revenue, expense, patronage capital and cash flows for the years then ended and the related notes to the financial statements. Opinion In my opinion, consolidated financial statements referred to above present fairly, in all material respects, the financial position of Boone Electric Cooperative as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Consolidated Operating Statement & Balance Sheet Independent auditor's report - 7 - Dennis G. Koch Certified Public Accountant | February 23, 2016 Members’ economic participation Assets 2015 2014 Current Assets Cash $3,557,677 $7,980,460 Accounts receivable 626,970 1,148,828 Materials and supplies 1,204,628 1,273,091 Other current and accrued assets 185,941 177,093 Total Current Assets $5,575,216 $10,579,472 Other Assets Total utility plant in service 102,625,416 $99,234,297 Investments in associated companies 26,970,628 26,148,292 Notes receivable 252,000 288,000 Deferred charges 2,732,170 $3,122,481 Total Assets $138,155,430 $139,372,542 Capital Equities Patronage and other equities $60,648,597 $59,506,809 Total Equities $60,648,597 $59,506,809 Liabilities Current Liabilities Accounts payable $865,540 $689,967 Current maturities of long-term debt 2,869,462 2,710,582 Customer deposits 1,104,971 1,113,698 Accrued taxes 80,145 42,715 Other current and accrued liabilities 3,425,692 3,263,043 Total Current Liabilities $8,345,810 $7,820,005 Other Liabilities Long-term debt, net 68,980,241 71,849,705 Deferred credits 180,782 196,023 Total Liabilities $77,506,833 $79,865,733 Total Equities and Liabilites $138,155,430 $139,372,542 Operating Revenue 2015 2014 Sales of energy $53,472,536 $55,334,821 Other electric revenues 576,139 581,674 Total Operating Revenues $54,048,675 $55,916,495 Operating Expenses Cost of purchased power $30,370,634 $30,605,637 Distribution expense - Operation 3,137,901 3,026,677 Distribution expenses - Maintenance 4,130,235 4,161,982 Customer accounts 1,468,735 1,491,818 Customer service and information 1,414,811 1,437,696 Administrative and general 3,936,422 3,876,187 Total Operating Expenses $44,458,738 $44,599,997 Depreciation and amoritization 3,985,776 5,861,514 Interest on long-term debt 3,652,716 4,159,563 Other deductions 78,810 59,486 Total Cost of Electric Service $52,176,040 $54,680,560 Operating Margins $1,872,635 $1,235,935 Non-Operating Margins Interest income 55,483 68,548 Merchandising (net) 49,626 17,496 Non-operating margins - Other 1,619 (61,908) Gain/(Loss) on disposition of assets (2,437) 37,552 G&T capital credits 1,439,255 1,602,567 Other capital credits and patronage 396,383 385,136 Patronage Capital and Margins $3,812,564 $3,285,326 Net Margin Allocated to other margins — 368,997 Patronage capital - Beginning of year 59,506,809 58,496,582 Subtotal 63,319,373 62,150,905 Retirement of capital credits (2,670,776) (2,644,096) Donated capital — — Patronage Capital - End of Year $60,648,564 $59,506,809
- 8. SUMMER SAVINGS for Cruising The One Card That Does It All.® Connections.coop Cruise around this summer with your Co-op Connections Card and take advantage of hot deals. Bring your card with you or download the free app and save! As a member of a Touchstone Energy® cooperative, you have access to hundreds of discounts locally and thousands across the U.S. A Touchstone Energy® Cooperative