Manager’s Report for Annual Meeting of Members

August 6, 2013

 It is my pleasure and honor to welcome everyone to the 79th Annual Meeting of the Alcorn County Electric Power Association. Your Board of Directors of the Cooperative has assigned me the duty of presenting a report on the State of your Cooperative just like the original Board of ACE intended in the formation of this “First Electric Cooperative in America.”

It is my strong belief that B.F. Liddon, Dee Crow and a large contingent of businessmen and farmers from Alcorn County who met with David Lilienthal, the Chairman of TVA, in the back room of Will McPeters’ furniture store to create “The Corinth Experiment” which would bring prosperity to the sleepy little town of Corinth, Mississippi, could have never believed the tremendous success of ACE today. These men believed that the luxury of electricity when supplied to the farms as well as just a few businesses in town would bring prosperity to all at a reasonable price. When Mr. David Lilienthal said that TVA was willing to provide the new cooperative with the cash and labor to buy the existing facilities and to build the necessary new poles, lines, transformers and meters the dream of Alcorn County Electric Power Association began to come true. Seventy-nine years later ACE’s main job is still installing and replacing poles, lines, transformers and meters. Because ACE was created for the members, safe, reliable, and affordable service has always been the reason for ACE’s existence. Therefore, this year’s report on the State of ACE definitely has to begin with the Operating and Engineering accomplishments and opportunities.

Don Rinehart and I were instructed by Charles Barnett in 1980 to have a stringent right-of-way clearing program that only became better each year, and to always have a never ending line building program consisting of new and upgraded projects. This plan proved to pay for itself with lower line losses and a system that became more and more reliable each year. I am proud to report that Jason Grisham, Manager of Engineering, and Paul McNair, Assistant Operating Superintendent, also believe in this philosophy. Therefore, I see ACE’s top-notch electrical system only getting better and better in the future years. We know that we can never have a system that stays on all of the time, but we already have one that is on 99.999% of the time. Even with that kind of reliability, new technologies gives us hope of tweaking the system and continue increasing reliability along with more customer friendly information systems.

The following is a list of projects completed this year:

(1)    New three phase project on CR 309

(2)    Reconductored three phase line from Hwy. 45 Truck Stop to Jobetown and to Kossuth

(3)    Sent a crew to Chattanooga to help with storm damage

(4)    Built new three phase line to serve new Caterpillar Warehouse

(5)    Rebuilt circuits on Alcorn Drive with concrete poles

(6)    Reconductored three phase line on Highway 2 from Golf Course Road to Jobetown Road

(7)    Installed new voltage regulators at Northeast  Corinth Substation

(8)    Installed fiber optic cable from ACE office to Kossuth Substation

(9)    Served new Corinth Sewer Plant

(10) Built new three phase line on CR 217 to serve new Farmington Sewer Pump

(11) Built new three phase tie line at end of Waukomis Lake Road

From this report it is obvious that ACE is blessed with excellent employees and the State of your Operating and Engineering Departments are in excellent shape as they are still in the business of installing poles, lines, and transformers. However, it is accomplished in a more efficient way and operated in a technologically superior way to ACE’s beginning.

Now it is time to discuss the State of your Accounting Department. They are still installing meters in order to make the cash registers work so that your co-op can continue to provide the service that we have all come to expect. But, today’s metering has undergone the largest technological change in the electric distribution industry. ACE first got involved in this new metering in 1998 as we saw the day of the pure meter reader coming to an end. We began this trek by first installing these new solid-state meters, that we could read from the office, in our most rural locations. The system worked, and as our meter readers retired we began changing out more and more of the meters. Technology or new computers, as these meters really were brings with it so much more information than we ever dreamed of having access to.

Just like every computer system that ACE has acquired to make our jobs easier and more efficient, they have all created more new jobs due to the mountains of information that become available to ACE and to all of our members. Now, fifteen years after we began using this metering system, your Accounting Department led by Eddie Howard, Office Manager, and Sean McGrath, Assistant Office Manager, has created the most innovative metering plan called PayWise. PayWise is a pay-as-you go metering system that allows the member to buy electricity like you buy gasoline. When your tank gets low, just go buy any amount you want to purchase. This system may not be for everyone, but for individuals who want to help control their electric costs or ones who can’t afford a high deposit this system is a dream come true. ACE began this pilot program in March and we already have over 500 members using this attractive alternative. This would never have been possible without the so-called smart meters.

In addition to ACE’s new PayWise plan, your Accounting Department collected $59 million of revenue and paid TVA $45 million in power cost. You now have a $75 million Cooperative and the State of your Accounting Department is excellent and also blessed with extremely proficient employees.

I feel obligated to inform the membership why the total State of your Cooperative is not excellent this year. During this past year your Cooperative has been forced to spend over $200,000 of your Cooperative’s funds in legal costs fighting an untrue charge by the Mississippi Public Service Commission.

Alcorn County Electric Power Association is and has always been a not-for-profit electric cooperative. ACE has also never been in the business of mistreating members. ACE’s power contract with TVA requires us to not discriminate among members. Thus our rules and regulations have always been approved by TVA.

The Mississippi Public Service Commission has passed a “Bill of Rights” in the past few years that has some rules that TVA has informed the Power Distributors that the rules do not apply to us. However, Alcorn County Electric Power Association has never intentionally violated any of the PSC’s “Bill of Rights.”

Regretfully, last year an investigator for the PSC’s Northern Division filed a claim against ACE accusing us of mistreating a young child who required electric service for medical procedures. The investigator contended that ACE disconnected electric service to the house, thus violating the “Bill of Rights.” The claim also said that ACE should be fined $30,000 for the accused action.

It should be evident that ACE was found “NOT GUILTY” of this terrible accusation, since there were never any headlines of this hearing.

The truth was that ACE never knew anything about this young child. ACE had worked with the lady who owned the house where a delinquent $123.00 bill was over two months late before the power was disconnected. Also, the power to the house in question was restored within two hours of ACE being made aware of the needs of this young child.

Thus, the Mississippi Public Service Commission caused ACE to have to waste over $200,000 of the Members’ funds to defend itself of an outright untruth. There is also no telling how much money that the Mississippi Public Service Commission wasted in trying this case, which could have all been avoided if the Commission had sought the truth before accusing ACE of poor service practices. ACE will always defend itself when falsely accused.

As stated before, ACE was founded in 1934 with its main purpose being service and doing so at no profit. Unfounded charges by the Mississippi PSC should not be a part of doing ACE’s everyday business. This event is the only reason that I cannot say that this year’s State of ACE is in excellent condition.

The Board of Directors, Management, and Employees promise that we will continue to provide the Membership with the safest, most reliable and affordable electrical service we possibly can, as you have all come to expect.

 

Respectfully Submitted,

 

James D. Nanney, Jr.

General Manager