the power of teamwork. · know and appreciate the power of teamwork. ... as the center of its storm...

PALMETTO ELECTRIC COOPERATIVE, INC. l 2016 ANNUAL REPORT

The POWER of Teamwork.POWERThe POWER of Teamwork.

PEC 2016 Annual Report final .qxp_PEC AR 4/3/17 11:53 AM

1

A. Berl Davis Jr.P r e s i d e n t a n d C h i e f E x e c u t i v e O f f i c e r

Jeremiah E. VaigneurC h a i r m a n o f t h e B o a r d

As Hurricane Matthew made its approach to our service area last year, we were all reminded of the tremendous andunpredictable magnitude of a storm this size. Immediately, our thoughts went to community and the special places andpeople that make this such a beautiful part of South Carolina. As we were all aware, storms like this can provedevastating, but they can also do something that is unique—bring people together in amazing ways.

No matter your role in a community this size, a storm such as Hurricane Matthew serves as a great equalizer, allowingus to create new bonds that bring us closer together as we collectively respond to the power of Mother Nature. There’san old saying in our industry: “When your lights are out, my lights are out.” This phrase speaks to Palmetto Electric’scommitment to community and how we all work toward a common goal to ensure reliable and dependable power thathelps us weather any kind of storm.

As a member-owned electric cooperative, you and your family as well as your friends and neighbors all have theassurance that we work diligently to restore power after a storm such as Hurricane Matthew. Our team works aroundthe clock to help get the lights back on, to get lines cleared and to ensure our community is back up and running assoon as possible. As hard as we worked to restore power during this and every storm, we could not have accomplishedanything without the cooperation of our members and our employees, as well as members of the community who know and appreciate the power of teamwork.

From members who instantly alerted us on social media about outages and downed trees to law enforcement officersand other municipal employees who helped clear the roads, we proved that, throughteamwork, we are more powerful together. Although the challenges were daunting, wesupported one another through one of the worst weather events in local history and wecame through it as a team of people who are dedicated to community and to one another.

We are proud to present the 2016 Annual Report that highlights some of ouraccomplishments in the past year, especially as we faced the many challenges of HurricaneMatthew. We have seen firsthand how our members and the community work togetherwith Palmetto Electric for the betterment of us all and ensure that the power of teamworkwill keep the lights on now and into the future.

Jeremiah E. Vaigneur

A. Berl Davis Jr.

ANNUAL REPORT 2016


As the center of its storm passed 20 miles to the east of Hilton Head Island with wind gusts in excess of 90 mph, Hurricane Matthew proved to

be one of the most challenging—and destructive—natural disasters that local residents have experienced in decades. Entrances to our homes

and businesses were blocked by fallen trees, many roads were under water and power was out throughout our service area.

But as Hurricane Matthew began its destructive descent last October, that’s when Palmetto Electric employees went into action. From top

management to engineers, dispatchers, marketing members and lineman crews, PEC employees—and a massive team effort from local and

state officials—began an arduous journey of working non-stop to ensure the safety and power of the electric grid as the storm approached

the island.

2

PEC’s Engineering and Operations’ team worked day and night in the Power Control Conference Room to help monitor, evaluate and assignrestoration efforts. Operations team members include (left to right) Melissa Lowther, Administrative Assistant Engineering/Info Systems;Tim Hutchinson, System Engineer; Roxane Tindal, GIS Technician; Katie Mock, GIS Technician; and Bruce K. Draper, Operations Manager.

The POWER of Teamwork.POWERThe POWER of Teamwork.


“Here’s where being in a small, tightly knit community comes into play as the best way to deal with a storm of thismagnitude,” said Berl Davis, president/CEO of Palmetto Electric.“Not only did we have this outpouring of support from our own people, we had the goodwill of the community to assist us with food prep and setting up housing arrangements for our employees, as well as the 85 additional linemen that came to assist us from surrounding co-ops.”

As Palmetto Electric employees and visiting linemen worked during the

storm, members—and the community at large—also benefited from the

meticulous emergency response preparation that is done in conjunction with

government agencies and other cooperatives from around the state. This

team effort covered everything from evacuation planning to making

arrangements with county and state officials—including the sheriff’s office,

local police and fire departments, and the National Guard—to minimize and

alleviate hazardous conditions brought on by Hurricane Matthew and other

weather events.

Once Hurricane Matthew made its way through South Carolina, the

magnitude of the storm’s effect on the Lowcountry—and our power grid—

became all too apparent. With 61,831 total outages (a loss of service to

nearly 90 percent of our members), 141 broken poles and 82 damaged pole

and pad mount transformers, Palmetto Electric employees, municipal and

state officials, local civic leaders and our members began the monumental

restoration and repair team effort to deal with the after-effects of this

catastrophic storm.

3

In trying to maintain constant communication with our members during

the storm, we soon realized the enormous impact of social media during

a weather event of this magnitude. Through Facebook and Twitter, as

well as our Palmetto Electric smartphone app, we were able to conduct

real-time contact with members to hear their service needs and alert us

of outages, fallen trees and other hazardous conditions. In turn, we were

able to give members and the community advance notices on Hurricane

Matthew’s estimated arrival time, offer up storm protection tips and give

outage updates. Facebook also helped us alert members on service

restoration information, where dangerous lines were still down and

where outages were still occurring.

Through this instant two-way communication, members became

the eyes and ears of the community, helping our employees work more

quickly and efficiently in restoring the power, another example of

teamwork and innovation that helped us respond before, during and

after the storm.

POWERThe POWER of Community

POWERThe POWER of Communication


Along with all PEC’s Customer Contact Representatives (left to right),

Scarlet Duran and Evette Sanders Phillips worked diligently to answerquestions and concerns of members during and after the storm.

4

As devastating as Hurricane Matthew was to our service area, Palmetto Electric saw both

clean-up and repair efforts as opportunities to forge new bonds with the community and to

enhance aspects of service uncovered by this particular storm.

After water from the storm surge flooded padmounted equipment, Palmetto Electric identified

equipment that needed to be raised or relocated so that similar damage is less likely to occur

in future flooding conditions. As other equipment, fencing and meters damaged by the storm

were replaced, our workers helped ensure that all were done with

the latest and most efficient models and materials, again helping to

ensure that the next storm will have less of an impact. In addition,

as fallen trees and root balls around the Lowcountry were removed,

our crews were able to identify others that needed trimming and removal to minimize impact

from future storms. Palmetto Electric also worked with FEMA and other town, county and

state officials to share learned lessons to ensure our service area remains strong—

another example of the power of teamwork in turning challenges into opportunities.

Palmetto Electric worked hard to put members first before and after the

storm, and we were very pleased to receive a 90 percentile score from

the American Customer Satisfaction Index (ASCI) that speaks to the level

of satisfaction that members felt with their service in the last year. This

high score is above the national average for electric cooperatives and is

particularly meaningful to our employees in the aftermath of a crisis situation. It also shows

how the power of teamwork can bring satisfaction to our members as we worked diligently

to restore our power and community.

Hurricane Matthew Broke Our Poles But Not Our Spirit.

With the patience ofmembers, an amazingdisplay of communitysupport, and thecollaboration ofpartner organizations,Palmetto Electric notonly weathered thisstorm through thepower of teamwork,but helped theLowcountry becomebetter prepared forfuture events.

October 2016

October 2016

October 2016

January 2017

January 2017

January 2017

POWERThe POWER of Opportunities

• 61,831 total outages• 141 broken poles• 82 damaged pole & pad mount transformers • 310 employees• 7 days to restore

RESTORATION COMPLETE


C. Alex UlmerVice Chairman

BEAUFORT COUNTY

Eunice F. SpilliardsSecretary/Treasurer

JASPER COUNTY

Jeremiah E. VaigneurChairman of the Board

JASPER COUNTY

Henry Driessen Jr.BEAUFORT COUNTY

James O. FreemanHAMPTON COUNTY

Dr. Earl Bostick Sr.JASPER COUNTY

Carolyn GrantBEAUFORT COUNTY

Jimmie D. McMillanHAMPTON COUNTY

D. Terrell SmithHAMPTON COUNTY

William J. NimmerBEAUFORT COUNTY

James L. RoweBEAUFORT COUNTY

David A. SolaroBEAUFORT COUNTY

BOARD OF DIRECTORS 2016

Palmetto Electric Cooperative isgoverned by a policy-making boardof 12 trustees—six who reside inBeaufort County, three who residein Hampton County and three who reside in Jasper County. The directors serve terms of threeyears each, with terms of twodirectors from Beaufort County and one director each from Jasperand Hampton counties expiringeach year. These directors areelected at the Annual Meeting ofthe members, and exercise all ofthe powers of the Cooperative,except those reserved to themembers, according to the bylaws of Palmetto Electric.

5


STATEMENT OF MARGINS AND PATRONAGE CAPITAL AS OF DECEMBER 31,

2016 2015Operating Revenue .................................Operating ExpenseCost of Power .......................................Operation and Maintenance ................. Consumer Accounts..............................Administrative and General...................Depreciation ..........................................

Taxes .........................................................Interest ......................................................Total Operating Expense ........................Net Operating Margins ...........................Non-Operating MarginsInterest Income .....................................

Patronage Capital fromAssociated Organizations .................

Net Margins .............................................Patronage Capital—

Beginning of Year................................

Retirement of Capital Credits ................Patronage Capital—

End of Year...........................................

The Cooperative’s financial statements are audited annually by independent certified public accountants. Copies of the audited financial statements and accountants’ reports are available for your inspection at theCooperative’s offices.

BALANCE SHEET AS OF DECEMBER 31,

A S S E T S : 2016 2015Total Utility Plant .......................................Less: Provision for Depreciation ...........

Net Utility Plant........................................Other Property & Investments ...............Cash—General Fund.................................Temporary Cash Investments ...................Accounts Receivable.................................Materials & Supplies .................................Accrued Unbilled Revenue........................Prepayments .............................................Total Current and Accrued

Assets ...................................................Deferred Charges ......................................Total Assets and Other Debits ..................

L I A B I L I T I E S :Memberships.............................................Patronage Capital......................................Other Equities............................................Total Equity ..............................................Total Long–Term Debt .............................Accounts Payable .....................................Consumer Deposits...................................Other Current and Accrued

Liabilities ...............................................Total Current and Accrued

Liabilities..............................................Total Liabilities and Other Credits .........

$ 263,513,672 81,415,759

14,208,662 5,681,297 6,525,088 1,537,667 7,430,329

260,790

$ 284,145 67,017,474 8,699,394

$ 9,261,695 4,277,207

54,688,032

$ 182,097,913 15,258,889

35,643,833 11,339,153

$ 244,339,788

$ 76,001,013 100,111,841

68,226,934 $ 244,339,788

$ 256,434,190 78,127,842

10,002,052 14,688,069 6,768,257 1,270,756 7,244,352

448,152

$ 281,345 68,615,439 8,515,152

$ 10,098,052 4,115,129

44,431,739

$ 178,306,348 14,924,998

40,421,638 8,808,225

$ 242,461,209

$ 77,411,936106,404,353

58,644,920 $ 242,461,209

$ 113,321,419 8,685,771 5,075,384

10,696,637 8,780,291 5,755,879 3,968,680

$ 176,558

971,940

$ 158,310,507

156,284,061 $ 2,026,446

1,148,498 $ 3,174,944

68,615,439 $ 71,790,383

4,772,909

$ 67,017,474

$ 114,521,610 9,096,792 5,114,733

10,654,355 8,974,210 5,644,105 4,130,631

$ 257,910

799,031

$ 160,384,000

158,136,436 $ 2,247,564

1,056,941 $ 3,304,505

77,710,912 $ 81,015,417

12,399,978

$ 68,615,439

20062,967

M I L E S O F L I N E

20113,207

20123,209

20133,225

20143,251

20153,275

3,600

3,200

2,800

2,400

2,000

1,600

1,200

800

400

020163,293

2

200662,844

C O N S U M E R M E M B E R S

201167,715

201268,257

2013 68,498

2014 68,600

201569,325

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

201670,193

K W H / SO L D (Millions )

2012 1,360.5

20111,470.8

20061,452.1

20131,358.6

2014 1,492.8

2015 1,474.7

2016 1,471.8

$3.1Non-Operating and Operating Margins

$18.5Interest, Taxes& Depreciation

$24.4Cost ofOperations &Maintenance

T O T A L R E V E N U E$158,310,507

H O W Y O U R D O L L A R W A S S P E N TI N 2 0 1 6

(in millions)

$113.3 Wholesale Power

6

FINANCIAL REVIEW 2016


PowerFor power outages, call:

PowerTouch1-866-445-5551

Hampton: 803-943-2211 Hilton Head: 843-681-5551 New River: 843-208-5551 Ridgeland: 843-726-5551 Toll Free: 1-800-922-5551 palmetto.coop

The Touchstone Energy®symbol is your assurance that we’rea community-minded electric cooperative providing highstandards of service for customers large and small.


the power of teamwork. · know and appreciate the power of teamwork. ... as the center of its storm...

Documents