2019 ANNUAL REPORT Our Vision
Reimagining Rural America
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Executive Message: Annual Meeting & Reimagining Rural America
Bandera Electric Cooperative will host its 81st Annual Membership meeting. Unlike in years’ past, due to the ongoing pandemic, our annual membership meeting will be a virtual one. While I will miss the physical interaction with the membership, this new format does allow the opportunity for more members to participate from the safety and comfort of their homes. We will still share the results of your directors’ elections, give away prizes, answer questions and share with the membership our vision and how we are reimagining rural America. In 2019, we exceeded financial expectations thanks in part due to higher than expected broadband margins and lower energy costs. That's why last month your board of directors elected to increase the amount of patronage capital returned to our members by 67%. Equally important is our emphasis on improving electric system reliability and energy efficiency, which also contributed to the financial success of the organization. So what does reimagining rural America really mean? If you were to look at the United States’ classification of the words urban and rural in 1950, rural America today is crushing it. It’s home to about as many people as urban America, and it’s growing faster. Last year, Bandera Electric saw its largest member growth in nearly a decade. So why do headlines and statistics paint rural areas as perpetually in decline? Because the contest between rural and urban America is rigged. Official definitions are regularly updated in such a way that rural counties are continually losing their most successful places to urbanization. ON AUGUST 15, 2020,
1 BA N D ER A EL ECTRIC C O OPER ATI VE 2019 AN N UAL REPORT
The official definition of rural has changed 10 times over the last 70 years. So when a rural county grows, it becomes an urban one. Bandera and Kendall counties are no longer considered rural. They are urban areas based on the new definition of rural, but the rural culture and values of community commitment don’t change just because we hit a population threshold. Since we already share the values of community, what we are missing in rural America is critical infrastructure and adequate access to quality education and health care. Bandera Electric Cooperative is committed to providing access to reliable and affordable electricity, renewable energy and high-speed broadband access. We are also working with our school districts and health care providers to improve broadband access. In doing so, Bandera Electric Cooperative is reimagining rural America. I hope that you exercise your right to vote in our director elections and join us online for our upcoming Annual meeting.
BILL HETHERINGTON CHIEF EXECUTIVE OFFICER
Bandera Electric Cooperative Board of Directors District 1
Medina Lake (partial) Pipe Creek
District 2
Bandera Area (partial) JERRY N. WORD SR. DISTRICT 1
FRANCES “FRAN” LAUE DISTRICT 2
JEFFERY “JEFF” SLOCUM DISTRICT 3
District 3
Bandera Area (partial) Center Point (partial) South Tarpley
District 4 Boerne East Cordillera
Walnut Grove JEREMY DILLER DISTRICT 4 VICE CHAIRMAN
JERRY PIERCE DISTRICT 5
RICHARD “DICK” EARNEST DISTRICT 6
District 5 Medina
North Tarpley Turtle Creek Utopia
Vanderpool
District 6 Concan Hunt CHRISTOPHER “CHRIS” BLAKEMORE DISTRICT 7
MICHAEL D.T. EDWARDS DISTRICT 8 CHAIRMAN
KURT SOLIS DISTRICT 9 SECRETARY-TREASURER
Leakey
District 7 Lakehills
Medina Lake (partial)
elect directors or trustees from the membership to serve on the cooperative board. These democratically elected directors govern and direct the affairs of the cooperative, guide how the co-op’s money and assets are used to fulfill the cooperative’s mission, and represent their members’ interests and concerns as they develop policies that guide the cooperative’s operations and strategic direction. MEMBER-OWNERS OF THE COOPERATIVE
In accordance with the Nomination and Election of Directors provisions of the cooperative’s bylaws, qualified candidates are to be placed on the ballot and voted upon by the cooperative’s members—districts 1, 2 and 3 candidates will each serve three-year terms as director. The candidate for any particular voting district receiving the highest number of votes shall be declared the director of that particular voting district.
Mico
District 8
Boerne (west of IH10) Ranger Creek
Tapatio Springs
District 9
Center Point (partial) Comfort
2019 A NNUA L R EPO RT BA NDE R A E LE CT RIC C O O P E R AT IV E 2
2020 Notice of Meeting
3 BA N D ER A EL ECTRIC C O OPER ATI VE 2019 AN N UAL REPORT
Minutes of the 2019 Annual Meeting of the Membership of Bandera Electric Cooperative, Inc. of the Bandera Electric Cooperative, Inc. was held at the Bandera County Show Barn in Bandera, Texas, on the 18th day of May, 2019 in accordance with the Bylaws. Bruce Forey welcomed members to the Annual Meeting and asked that District 4 Director Jeremy Diller give the invocation at 10:00 a.m. Bruce Forey then asked for everyone to stand for the posting of colors by the all-volunteer Fort Sam Houston Memorial Services Detachment. Our National Anthem was sung by Aaron Patterson, followed by the Pledge of Allegiance. THE ANNUAL MEETING OF THE MEMBERSHIP
General Counsel and Chief Administrative Officer, John Padalino, introduced himself then called the meeting to order at 10:11 a.m., explaining a quorum was present in person, by proxy, or having voted by mail. Chairman Michael Edwards, District 8 representative, was introduced by Mr. Padalino and welcomed members and visitors.
was presented to Hunter and Paula Beaton for the Day 1 Bags program. Checks for $5,000 each were presented to the Bandera Frontier Times Museum and the Golden Age Center of Comfort. CEO Hetherington explained that funds for the BEC Foundation come from the round up campaign and the annual golf tournament. He encouraged all members to round up their monthly bills to support the foundation. At 10:31 a.m., Chairman Edwards informed the Members of the Cooperative’s 2018 Annual Report, including statements from BEC management and other Cooperative statistics. He indicated that this information was handed out during the meeting registration and that any questions regarding the annual report or other business matters would be addressed after the adjournment of the meeting.
District 1 Jerry N. Word, Sr.
General Counsel Padalino returned to speak at 10:32 a.m. and stated that no petitions were made for candidates for the Board of Directors, and in accordance with the provisions of the Bylaws, the following incumbent persons were placed in nomination as the official candidates:
District 3 Douglas (Rob) Sandidge (Vice Chairman)
Chairman Edwards introduced the Directors, and each stood to be recognized.
District 2 Frances (Fran) Laue District 4 Jeremy Diller District 5 Jerry Pierce
District 6 Dick Earnest
District 7 Zeda Alvarado
District 9 Kurt Solis (Secretary/Treasurer)
Director Solis read the Notice of Meeting and Proof of Mailing at 10:13 a.m.
He then stated that the next order of business was the reading of the minutes of the Annual Meeting of the Membership held on May 19, 2018. He indicated that copies of these minutes were distributed to each Member in the annual report given at the registration desk and entertained a motion to dispense with the reading of the minutes. A motion was made to dispense with the reading of and to approve the minutes of the Annual Meeting of the Membership held on May 19, 2018. The motion received a second and was approved by the membership at 10:15 a.m.
District 7 Zeda Alvarado
District 9 Kurt Solis
District 8 Michael D.T. Edwards
Mr. Padalino stated that votes received by the May 17, 2019, 11:00 a.m. deadline had been tabulated by Survey and Ballot Systems. The final tabulation of votes included all electronic, phone and mail-in ballots. General Counsel Padalino read the report regarding the final tally of votes for each candidate at 10:32 a.m. The votes received were as follows:
Zeda Alvarado - 2,099 votes.
Kurt Solis - 2,007 votes.
Michael D.T. Edwards - 2,059 votes.
A motion was made and seconded to approve the report. This motion was approved by the membership.
With no unfinished business, Mr. Padalino entertained a motion to adjourn. A motion was made, seconded, and approved by the membership to adjourn the meeting at 10:34 a.m.
Director Solis called on Bill Hetherington to present the CEO Report.
At 10:15 a.m., Bill Hetherington welcomed members and recognized LCRA representative Steve Dyer. He then asked all veterans to stand to be honored on this Armed Forces Day.
At 10:17 a.m., Bill Hetherington presented the CEO Report and highlighted the growth the Coop experienced in 2018, including 10% growth in membership, 9.6% growth in electric energy sales, and 376% increase in high-speed internet sales. CEO Hetherington shared that Bandera Electric Cooperative is ranked first in the state for reliability among electric cooperatives. At 10:20 a.m., Mr. Hetherington introduced the BEC Foundation via video. Immediately following, a check in the amount of $2,500
Kurt Solis Board Secretary-Treasurer
Michael D. T. Edwards Board Chairman
2019 A NNUA L R EPO RT BA NDE R A E LE CT RIC C O O P E R AT IV E 4
2019 Facts & Figures Total Members
26,793
Co-op Employees
Total Active Meters
37,131
Miles of Line
217
Community Solar Subscribers
116
ASAI Reliability
99.991%
4,648
Meters per Mile
8
136
BEC Solar Installs
Total Distributed Generation in Kilowatts
3,718
Total BEC Solar 1,655 Distributed Generation KW
Total Fiber Broadband Subscribers
4,904
Fiber Residential
KW
Fiber Commercial
578,324,283
2017
581,898,713
2018
634,200,236
2019
641,686,867
4,696 208
Total Energy Storage Capacity
426
Total Fiber Broadband Phone Subscribers
461
KW
Electric Member Growth
Kilowatt-Hours Sold 2016
37
Apolloware Installs
2.7%
1.3%
1.2%
2016
2017
2.4%
2018
2019
How Your Member Dollar Was Earned in 2019
Residential 70.39%
Small Commercial 23.21%
Seasonal 3.34%
Large Commerical 2.82%
Irrigation / Other 0.15%
How Your Member Dollar Was Spent in 2019
Purchased Power / COGS 45.31%
Maintenance / Other 24.18%
5 BA N D ER A EL ECTRIC C O OPER ATI VE 2019 AN N UAL REPORT
Margins 15.92%
Depreciation 9.24%
Interest 5.35%
Statement of Financial Condition & 2019 Revenue and Expenses A S S ETS Total Utility Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $306,115,481 Less: Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . ($76,491,351) Net Value of Utility Plant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $229,624,130 Investments in Associated Organizations . . . . . . . . . . . . . . . . . . . . . $5,372,987 Deferred Charges & Other Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33,195 Current Assets Cash in Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,666,101 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,577,209 Other Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,992,957 Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,236,267 Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $245,266,579 E QUI TI E S & L I A BI L I T IE S Memberships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $641,290 Patronage Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $79,401,154 Other Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,000,422 Accumulated other Comprehensive Income . . . . . . . . . . . . . . . . . . $3,330,874 Total Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $85,373,740 Long-Term Debt Less Current Maturities. . . . . . . . . . . . . . . . . . . . $134,834,515 Deferred Credits and Other Long-Term Liabilities. . . . . . . . . . . . . $3,226,974 Current Liabilities Current Maturities of Long-Term Debt. . . . . . . . . . . . . . . . . . . . . . . . . $5,859,515 Short-Term Notes Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,652,651 Accounts Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,533,968 Other Current and Accrued Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . $785,216 Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,831,350 Total Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $159,892,839
BEC Solar generated revenues of $1,992,716.
BEC Fiber generated revenues of $3,560,902.
Total Equities & Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $245,266,579
O PERAT I NG R E V E NU ES Energy Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $69,526,982 Revenue from Divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,553,618 Other Electric Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,949,900 Total Operating Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,030,500 O PERAT I NG E XP E NSES & FIX E D C H A R GE S Cost of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34,864,888 COGS—Divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,789,344 Operations and Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,279,883 Depreciation and Amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,272,836 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,942,677 Other Deductions (Additions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $471,366 Total Operating Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $66,620,994 Operating margins—After Fixed Charges . . . . . . . . . . . . . . . . . $13,409,506 Nonoperating Items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ($874,835) Net Margins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,534,671
I, Kurt Solis, do hereby certify that I am the elected Secretary-Treasurer of Bandera Electric Cooperative, Inc., and that to the best of my knowledge, the financial and statistical information is true and correct as of December 31, 2019.
Kurt Solis Board Secretary-Treasurer
As of December 31, 2019. These are audited financials.
2019 A NNUA L R EPO RT BA NDE R A E LE CT RIC C O O P E R AT IV E 6
The BEC Foundation: 2019 Community Impact The BEC Foundation awarded $80,432 in grants to local nonprofits in 2019. 1,301 members rounded up their bills in 2019, donating $7,330 to the Foundation. The 2019 BEC Foundation Charity Golf Tournament raised a total of $82,696. 2019 Grant Recipients
2019 Charity Golf Tournament Sponsors
Bandera Fire & Rescue
N-Com
CFC Utilities
Bandera Youth Soccer Organization
Electricom Inc.
Texas Electric Cooperatives
Bandera Natural History Museum
Castle Lake Volunteer Fire Department Comfort Food & Pantry Day 1 Bags
Frio Canyon Parks Association Frontier Times Museum Golden Age Center
Hill Country Daily Bread Ministries Hill Country Samaritans
Kendall County 4-H STEM Robotics Club Kendall County Women's Center
Lakehills Pipe Creek Little League Association Leakey ISD
Pipe Creek Volunteer Fire Department
Real County Junior Livestock Show Association Sabinal Canyon Senior Council Foundation
Round up your bill today or learn how you can make a change at
BanderaElectric.com/Foundation 7 BA N D ER A EL ECTRIC C O OPER ATI VE 2019 AN N UAL REPORT
Burns & McDonnell Alpha Technologies Calix
Schneider Engineering
James Power Line Construction Power & Tel
Superior Essex
Belle Oaks Ranch LCRA
Wesco
KGPCo
Hubbell
Graybar
Repcom
The BEC Foundation’s mission is to support qualifying nonprofit organizations in its service area through charitable contributions with a focus on education, safety and overall concern for community.
Round up your electric and/or fiber bill, select the BEC Foundation as your AmazonSmile recipient, or make a one-time donation today. Learn more at BanderaElectric.com/Foundation. 2019 A NNUA L R EPO RT BA NDE R A E LE CT RIC C O O P E R AT IV E 8
Our Mission
Lighting the Grid to Empower Members
Our mission is lighting the grid to empower our members by enhancing quality of life with highly reliable electric, broadband and other energy-related services, that are valued by members, at the lowest possible cost.