Annual Report 2019
C O R P O R AT I O N Powering your life every day.
1939: OREMC incorporated September 5, 1939. The first meeting was held on September 29 in Nahunta, Georgia. 1940: The first lines in Georgia were energized onAugust 1, 1940.The 1947: OREMC had 948 consumer-members and 314 miles of line. 1957: OREMC had grown to 4,200 members and 1,300 miles of line.
Florida line extension was approved in September and the first lines in Florida were energized on December 24.
1960: The first capital credit checks were issued to refund profits to 1966: The
OREMC consumer-members .
planning and construction of a power line to serve Cumberland Island began.
1972: OREMC had grown to 8,675 members and 1,737 miles of line. 1993: The Hilliard, Florida district office opens. 1995: The Kingsland, Georgia district office opens. 2004: 65 years of service to OREMC’s more than 30,000 meters and 2016:
OREMC begins construction of three solar sites in April 2016—1.86 megawatt site on Highway 82 in Glynn County and 100 kW sites adjacent to both the Kingsland and Hilliard district offices. They became operational in September that same year.
3,100 miles of line.
2009: OREMC has 34,000 meters and 3,300 miles of line.
2016: Hurricane Matthew was a Category 2 hurricane when it slid up the coast of northeast Florida and southeast Georgia on the afternoon of September 7, 2016 leaving OREMC with approximately $1.075 million of damages to the system. 2017: Hurricane Irma passes through OREMC’s service territory on September 11, 2017 as a tropical storm causing approximately $2.275 million of damage after initially making landfall in Naples, Florida as a Category 4 hurricane.
OREMC rebuilds the line serving Cumberland Island and celebrates 80 years of service to its 37,688 meters across 3,564 miles of line.
It may seem hard to imagine that 80 years ago much of Southeast Georgia and Northeast Florida was in the dark. Today we have power at our fingertips, literally. We can flip a switch, touch a button or issue a command to our smart speaker—or from our phone—and lights, appliances, HVAC and security systems power up. While electricity has significantly changed day-to-day life in our rural corner of the world over these last 80 years, the mission of the people living in our small-town farming communities who came together to form Okefenoke Rural Electric Membership Corporation (OREMC) has not: affordable, reliable, and sustainable energy. Earlier this year we were reminded of the determination, planning, problemsolving, hard work, and commitment our founding members had as they cleared right of ways, raised poles, and strung wire to “bring the lights.” Electricity didn’t reach Cumberland Island until 1966. That project had its own set of unique challenges above and beyond mainland construction. Just like OREMC’s early days, the line was built by hand as trucks were of no use stringing 3.5 miles of line over 45 poles across three rivers and the marsh. This past May, after two years of planning and coordination with several state and federal agencies, the weather-worn line which had outlived its useful life was rebuilt. A helicopter set 45 new poles in just two days. A helicopter lineman dangled 50 feet below the chopper as he was transported from pole to pole to tie in the line over another couple of days. All told, what took over a year to build 50+ years ago, was completed in a matter of weeks this time. Cumberland Island is indicative of the lasting legacy of OREMC’s history, while Archer Forest Products represents a new energy helping to be an economic driver in our communities. Each is reflective of the same innovation and inspiration that motivated our founding members to invest in their communities. You can read more about both on the pages that follow.
2018: A rare winter ice storm on January 3, 2018 left more than half of OREMC’s distribution system damaged by downed trees, broken poles, and downed power lines.
2018: OREMC implements the Supervisory Control and Data Acquisition (SCADA) system to improve power reliability and restoration in August 2018. 2019:
PEOPLE. POWER. PROGRESS.
2018: Hurricane Michael made landfall on the Florida Panhandle as a Category 5 hurricane. Sustained winds were still blowing over 100+ miles per hour when it crossed the state line into Georgia, leaving 210,000 consumer-members at Georgia EMCs without power. OREMC crews worked through the night to restore power to our 2,500 members affected before 23 linemen put in nearly 5,000 man-hours of work over a four-week period to help our fellow cooperatives in Georgia and Florida get power restored.
We believe in the power of community. OREMC is more than just “sticks and wires.” We’re led by consumer-members like you who are community focused, working together for a common good. Our employees are your relatives, friends, and neighbors who are equally invested in supporting their hometowns. From volunteering their time to support youth groups, little leagues or community service organizations, to serving on local education and economic development boards and coming together to raise awareness and funds for those in need, they are the people behind the power at OREMC.
We are all in this together – it is what being your electric cooperative is all about.
John Middleton General Manager
Robert W. Combs President
Sitting on the expansive front porch lined with rockers and an oversized, cushioned swing on either end, Mitty looks out over the expansive lawn where several horses have meandered to graze and reflects back: “I often talk with guests about coming here as a child when there wasn’t any electricity. We had gas refrigerators and generators so we had to bring diesel to the island. We used to turn the generators on from 7-11 a.m., and then again at dusk to prepare and serve the evening meal. That is also when we’d pump water up into the water tower that used to stand just south of the Inn. This insured we had water and the necessary pressure when the generators were off.”
SUSPENDED IN TIME
A VISIT TO GREYFIELD INN ON CUMBERLAND ISLAND
“Power is critical, and the new line is so valuable . . .it is like gold,” enthuses Mary
Ferguson, managing partner, Greyfield Inn on Cumberland Island. She is referring to the 3.5 miles of line Okefenoke REMC recently rebuilt to provide the island with power. “Even though we live out here like ‘back in the day,’ power is essential to the experience.” It isn’t every day that singing the praises of a newly erected power line is a conversation starter. But then, Greyfield Inn on Cumberland Island isn’t your everyday place. Aside from the fact you can only reach the island by boat, the moment you step off and make your way down the dock you know you are entering a different time and place.
It wasn’t until 1966 when OREMC began constructing the original line to serve Cumberland Island. Then and now, the line is linked by 45 poles across three rivers and marshland before reaching the island. The line then goes underground to serve island residents, Plum Orchard and Greyfield Inn, leaving the natural vistas on the island undisturbed. Greyfield was converted to an inn by Margaret’s daughter, Lucy R. Ferguson, in 1962 and is one of OREMC’s oldest business consumer-members. Lucy was Managing Partner Mitty Ferguson’s grandmother, and he grew up coming to Cumberland Island from his Boston-area home. He remembers when his grandmother “got the zany idea to make the house an inn.” “Becoming an inn evolved out of the many family, friends, and friends of friends that regularly came to visit,” Mitty explains. “It was a means of helping to preserve the home itself and the Cumberland experience.”
Maybe it is the “lack of” that first captures your attention. Walking from the dock onto the crushed shell and sand roadway you are led under the oak canopy, accentuated by dappled sunlight. There aren’t any vehicles, signs or noise—except for the whinny of wild horses you walk past, the soft crunch of the road beneath your feet and the chipping birds heralding your arrival. The quiet embraces you as you follow the road up to the Inn. The beauty of the landscape leaving you in awe, and you only just got here. Beckoning you forward is a view of the Inn itself, still camouflaged to a degree by the mighty oaks draped with Spanish moss. The majesty of this historic, colonial-style home built in 1900 is revealed as you emerge into the clearing, an expansive stairway drawing you up to the porch and the front door. Once inside Greyfield Inn you are immediately transported back in time. All the furnishings are original to the house . . .they have not changed since 1900 when it was built by Thomas and Lucy Carnegie for their daughter Margaret Ricketson. From tea tables and Tiffany lamps to beveled mirrors and Chippendales chairs, the furnishings also include several Federalist style pieces, velvet upholstery, winged back chairs, and intricately carved, mahogany clawfoot dining tables. It is like a living museum that is simultaneously functional, ornate, yet inviting and comfortable.
Mary and Mitty Ferguson
In May of this year the weather worn line was rebuilt, having out lasted its useful life, particularly after being battered by two hurricanes in two years. As part of construction, planned power outages were necessary, which Mary communicated to their guests. “It was important for our guests to know how essential Okefenoke’s power line upgrade was to providing the experience they anticipated with us,” she notes. “We would not be able to do what we do without Okefenoke.” While electricity may be essential to Greyfield’s operations, they do not have television or internet service available. The goal of the Greyfield experience is to leave you feeling welcomed, well-cared for and rejuvenated. Mary says, “In the house and on the island, great care has been taken to preserve a bygone era. We want our guests to immerse themselves in the untamed, natural beauty that is Cumberland Island. It is the same today as it was the first time I came here during a senior camping trip in high school with my science class. Part of what we offer at the Inn are naturalist led tours to share and educate guests about our undeveloped island, the maritime forests, the marsh and the dunes. We also provide guided tours up to Plum Orchard and down to the Dungeness ruins. Because of the Kennedy wedding, many
guests are also interested in visiting the old African church at the island’s north end. They are surprised to hear it is 15 miles north and takes an hour to get there.” On this day, a couple from Bradenton/ Sarasota, Florida are staying at Greyfield after watching the recent documentary about the wedding of JFK Jr. to Caroline Bessette back in 1996. Having toured Plum Orchard earlier in the day, they took a respite in the library, sipping a cool glass of sweet tea before setting off on a stroll under the oaks. The chef provides a daily picnic lunch you can take out while hiking the many trails, on the bicycles that are made available for cruising the island or kayaking in the surrounding waterways. You’ll encounter various species of shorebirds and delight to the school of porpoises likely fishing and frolicking alongside you. And of course, there are the famed wild horses that roam freely throughout the island.
fireplace in Dungeness. From there everyone makes their way to the dining room where the menu features simple, yet elegant, meals locally sourced from the garden and surrounding estuaries. Glancing at his watch Mitty realizes the time is approaching for him to captain the Lucy R. Ferguson on her next ferry run to Fernandina Beach, Florida. There is always work to be done, but he and Mary don’t mind. They enjoy the simpler lifestyle and sharing their love of the island with their guests. “My grandmother said this place was going to get more unique over time,” recalls Mitty, “and she was right.” For more information on Greyfield Inn on Cumberland Island visit http://greyfieldinn.com/
As is family tradition, guests will dress for dinner and gather for cocktail hour at the bar—once a mantel mounted over a
Wild horses graze at Dungeness ruins.
DONATIONS BAKER COUNTY EDUCATION FOUNDATION
FERST READERS PROGRAM
Forty-two children enrolled in the Charlton County Head Start and Early Head Start programs were given the gift of reading from the newly established Ferst Readers program, funded in part by OREMC. Ferst aims to promote early literacy skills and school readiness in children from low-income families. “Having supported and seen the success of the Ferst Readers program in Nassau County,” notes OREMC Member Service Representative Dewayne Johns, “OREMC was more than willing to help bring the program to Charlton County.” OREMC also helped establish a program in Brantley County.
CONNECTING COMMUNITY Powering your life every day. That is the heart of Okefenoke REMC’s mission in 2019, just as it was at its founding in 1939. However, as an electric membership cooperative, OREMC was created by and for the communities it serves. Based on our founding principles to support* education, training, and sustainable development, OREMC is also actively engaged in promoting programs and initiatives to help our communities grow and build better futures. Here are some highlights demonstrating the power of community connections.
CUMBERLAND ISLAND PROJECT
OREMC celebrated one of its biggest engineering achievements in recent years with the Cumberland Island Project. Two years in the making, the project encompassed rebuilding of the 3.5 miles of line serving Cumberland Island and Little Cumberland Island. The original line built in 1966, and partially rebuilt in 1988, had outlived its useful life and was weather worn from two recent hurricanes. A symphony of systems, crews, contractors, and poles played out across the water and in the air in May and early June to set the 45 poles in the marshland between Cumberland and the mainland, with minimal environmental impact. The poles were staged on the mainland, picked up, flown and set by helicopter with assistance from an awaiting ground crew that was transported from pole to pole by airboat. After the line was strung, a helicopter lineman—suspended by a 50-foot cable to move from pole to pole—tied in the wire. “This project had so many moving parts and a 60-person crew,” reflects Mark White, OREMC staking supervisor. “It was amazing to see everything fall into place once the helicopter got there and the construction plan was executed.” White also notes the whole process was very educational as various construction techniques were applied to address unique and complex issues associated with the location and geography of the line.
OREMC celebrated its annual Youth Awards Banquet, awarding scholarships and selecting four delegates for the annual Youth Tour Leadership Experience in Washington, D.C. Ten scholarships of $2,000 each were presented in 2019, bringing OREMC’s total scholarships to $220,500 presented to 231 students over 26 years. This is the 27th year OREMC has participated in the Youth Tour bringing the total number of sponsored delegates to 101.
POWERING UP THE BRIDGE RUN
OREMC fielded a 41-person team to power up the Southeast Georgia Health System Foundation Bridge Run in Brunswick on Feb. 16, benefitting the Health System’s cancer care programs. Dubbed the “toughest 5K in Georgia” as it takes place on the 7,780foot Sidney Lanier Bridge, Team OREMC’s enthusiasm earned them a bronze medal for Team Spirit Award.
Sherrie Raulerson, superintendent, Baker County School District, and Robin Mobley, executive director of the Baker County Education Foundation and associate superintendent, accepted a $2,000 donation OREMC made to the Baker County Education Foundation. Mobley said the funds from OREMC would be used to award teachers mini grants during the 2019/2020 school year supporting STEM and reading projects that go beyond the text book and are engaging and motivating. Nassau County Education Foundation also received a $2,000 donation from OREMC.
HELPING TO FURTHER THE “VISION FOR A BRIGHTER TOMORROW”
THE SOUTHEAST CANCER UNIT, INC.
OREMC donated $2,000 to the Georgia Lions Camp for the Blind in Waycross. “We are very appreciative and thankful for OREMC’s donation,” said Mike Williams, camp director. “All of the money goes to the campers and helps offset the cost of food, supplies and transportation.” In May, 14 OREMC employees gave their time and energy to assist the camp get ready for the upcoming season. Additionally, OREMC is a collection point for the Lions International eye glass recycling program at each of its offices.
ANNUAL SOUTH REGION FUTURE FARMERS OF AMERICA (FFA) WIRING COMPETITION
$2,500 and a bucket truck were donated to Coastal Pines Technical College’s Electrical Lineworker Program. Travis Page, manager, OREMC Distribution Services, explained the bucket truck was being retired from the OREMC fleet, but still had useful life. Rather than selling the vehicle at auction, it was determined the truck would be an enhancement to Coastal Pine’s Electrical Lineworker training program. Combined with the monetary donation from OREMC, the college will be able to assist students in purchasing necessary equipment and books required to complete their certification.
Okefenoke REMC presented a check for $6,000 to the Southeast Cancer Unit, Inc., following its record-setting 28th Annual Golf Tournament on June 1 at the Lakes Course/ Laura S. Walker State Park in Waycross with 85 players and 33 sponsors, including: Golf Ball Sponsor Southeastern Bank and Cart Sponsors Asplundh Tree Experts and Pike Electric, LLC. The Southeast Cancer Unit, Inc. is a volunteer organization helping cancer patients in Brantley, Pierce and Ware counties with medical expenses while undergoing cancer treatment.
Nine students from six surrounding counties participated in OREMC’s practice session for the annual South Region Future Farmers of America (FFA) Wiring Competition last November, that led up to the statewide competition in January. The wiring competition is an Agricultural Electrification Career Development Event sponsored jointly by the Georgia FFA Association and the Georgia Electric Membership Corporation. OREMC also annually sponsors FFA livestock shows hosted by the counties in our service area.
ELECTRICAL LINEWORKER PROGRAM
* Using unclaimed capital credits OREMC is able to make donations to qualifying organizations located in our eight-county service area.
of chips and dry side materials are pulverized by the hammers and forced through those screens to reduce the particle size. From this point there are a few more conveyors and distribution bins that the materials will move through before reaching the pellet mill presses where that material will finally be pressed through a 4.5 foot diameter pellet mill die containing 3,600 round 6 mm diameter holes forming the pellet that we produce.” Archer has six pellet mills with a total output capacity of about 120,000 metric tons annually. Before being loaded on trucks headed for the port, random pellets are checked at the onsite lab to ensure the moisture content is within acceptable limits. They will be checked again at the port before being loaded and shipped to the United Kingdom. All the materials used by Archer are residual byproducts of other lumber mill and forestry operations. Most of it is pine from Georgia, but Joey says some hardwood can be mixed in the bark used to fire the furnace. While dry chips are the most ideal, green is more prevalent and less expensive. The pride is evident in Joey’s voice as he explains the many processes in play at the plant. When asked to describe what he likes most about his job, he takes a moment to reflect, “FRAM making this plant operational created about 35 new jobs. That is significant in southeast Georgia as we are about as rural as you can get. The folks here are hard working people looking to make an honest living. But to think what we do here has a world-wide impact is noteworthy, as is the ripple effect of our operations locally. From the mills, the loggers, local truck drivers, the restaurants, the ACE Hardware, OREMC . . . everyone benefits.”
THE POWER OF A PELLET Driving along Highway 82 white-hot steam can be seen rising in the distance against the backdrop of an azure blue sky. Approaching the source, located on the east side of Nahunta, Georgia, an industrialtype building, and what appears to be piles of sand and mulch-like material, comes into view. What isn’t immediately apparent driving by, is that this unassuming plant tucked in the southeast corner of rural Georgia is rooted locally but growing internationally. Archer Forest Products, LLC, is Okefenoke REMC’s newest business/ industrial consumer-member. It is one of four wood pellet mills owned by FRAM Renewable Fuels based in Hazlehurst, Georgia, that exports pellets to the European Union (EU). Using sawmill residues, tops and other low-value trees, FRAM’s pellets are used as a coal replacement for power generation overseas. It is part of the EU’s initiative, along with the increased use of wind and solar power, to help reduce carbon emissions and fight climate change. “FRAM’s goal is to produce wood pellets with the smallest possible carbon footprint,” explains Hillary Nencioni, executive assistant at FRAM. “Our pellet customers have carbon dioxide thresholds in place that we must stay below. As a result, we track every aspect in the pellet making process from the haul distance of raw materials to the mills, the utilities used in pellet production, and the final transportation to the port to calculate our greenhouse gas emissions. On site, we observe Georgia Protection Division regulations for air and water emissions, and we have projects in place to further reduce emissions.” FRAM acquired the Nahunta plant in August 2018 after it went up for auction. It’s strategic location is close to the Port of Brunswick where all their wood pellets are shipped out of. After investing
$15 million in capital and process improvements, Archer Forest Products, LLC, began production in February 2019. Maintenance Manager Joey Boyett attests to the operational investments and the process improvements continuously being made at Archer, “Based on their experiences at their other mills, FRAM really took a good hard look at what was here and the flow of materials in order to make the plant operational in the most efficient way possible. There are a lot of moving parts to bring in a green chip, dry it, compress it and move it out as a finished product.”
For more information about FRAM Renewable Fuels visit http://www.framfuels.com/ Joey Boyett, maintenance manager at Archer, holding finished pellets ready to ship.
He isn’t kidding. Getting a tour of the grounds, the maze of loaders, hoppers, elevators, mixers, sifters, drums, and conveyors is, at first, confusing. Joey explains the complex evolution from mixing dry and green materials to outputting 6 mm pellets that pass stringent quality control inspections for moisture content, before being trucked to the Port of Brunswick. “All of our pellets are made from raw materials: in-woods chips, trees that are chipped in the forest, and round wood or whole trees brought in to our facility and chipped here onsite,” explains Joey. “A mixture of tree bark, pine and some hardwood chips, that in years past would have been waste, are now used to fire our 40 mm Btu furnace. The furnace creates the heat that our dryer system needs in order to dry green, or wet, chips to a desired moisture percentage before being processed.” “So now we have dry chips from our dryer system that are mixing with our dry side materials—such as dry shavings, dry sawdust etc.—that then go through a couple of hammer mills,” he continues. “The hammer mills have a choice of screen sizes in them, and the mix
STATEMENTS OF OPERATIONS For the Years Ended June 30 2019
Financial statements for the fiscal year ending June 30, 2019, reflect the sound status of Okefenoke Rural Electric Membership Corporation. Each year we retain the services of independent Certified Public Accountants, to perform an audit of the corporation’s accounting records. This year’s audit, conducted by McNair, McLemore, Middlebrooks and Co, LLP included an examination of the Cooperative’s balance sheets, statement of revenue and expenses, and remarks concerning each. Copies of the complete audit are on file at the Cooperative’s Headquarters Office in Nahunta, GA for your review.
STATEMENTS OF CASH FLOWS For the Years Ended June 30
Operating Revenue and Patronage Capital
Cost of Power
The figures presented in this report represent our summary of the year’s operation.
Administrative and General
Cristi B. Koncz Secretary/Treasurer
Consumer Assistance and Information
ASSETS June 30
MEMBERS’ EQUITY AND LIABILITIES June 30 2019
Utility Plant Electric Plant in Service - At Cost Construction Work in Progress
Accumulated Provision for Depreciation
Members' Equity $192,307,691
Other Property and Investments Investments in Associated Organizations
Operating Margins Before Interest Expense
Accrued and Withheld Taxes Other
Deferred Debits Total Assets
Other Current Liabilities
Operating Margins After Interest Expense
Accrued and Withheld Taxes
Generation and Transmission Cooperative Capital Credits
Return of Equity from Associated Organizations
Long-Term Debt Current Portion
Materials and Supplies
Accounts Receivable (Net of Accumulated Provision for Uncollectible Accounts of $1,074,088 in 2019 and $863,226 in 2018)
Other Current Assets
Note Receivable - Current Portion
Patronage Capital from Associated Organizations
Cash and Cash Equivalents
Adjustments to Reconcile Net Margins to Net Cash Provided by Operating Activities, Depreciation and Amortization
Deferred Credits Total Members' Equity and Liabilities
Materials and Supplies Note Receivable - Rural Development
Net Margins 4,977,000
Cash Flows from Investing Activities Extension and Replacement of Plant
Other Capital Credits and Patronage Capital Allocations
Cash Flows from Operating Activities Net Margins
Cash Flows from Financing Activities
Advances on Long-Term Debt
Principal Repayments of Long-Term Debt
Retirement of Patronage Capital
Capital Term Certificates
Cash and Cash Equivalents Beginning
Cash and Cash Equivalents Ending
Net Increase (Decrease) in Cash and Cash Equivalents
BOARD OF DIRECTORS
JOHN MIDDLETON GENERAL MANAGER
ROBERT W. COMBS
STEVE E. RAWL SR.
1ST VICE PRESIDENT
2ND VICE PRESIDENT
CRISTI B. KONCZ
ON THE COVER: OREMC 2019 Lineman Rodeo Team (from top to bottom): Andy Thomas, Marcus Skelton, Ernie Mitchell, Omar Garay, Will Testone, Ricky Williams, Todd Gay, Cole Carter, and Travis Page
2019 OREMC Annual Report