Empowered Annual Report 2024

Annual REport

2023-2024 1

A Message

To Central Members CEO MESSAGE The Central Rural Electric Cooperative team’s purpose is to serve the members and provide safe, reliable and affordable electricity. It is why we exist. It is our purpose-driven attitude that separates Central from other utility companies.

When it comes to our membership, Central listens.

Through surveys and speaking directly with members, we have learned that affordability and reliability remain your top priorities.

While weather controls Central’s overall performance throughout the year, we have prioritized investments in our grid to ensure Central’s growing membership continues to enjoy safe and reliable electricity at the lowest rates possible.

Empowering Central’s members and communities is the purpose behind everything we do and has been for 86 years.

Central was organized in 1938 when 10 local farmers saw a demand for electricity in our rural areas; areas that many utility companies would not build to because they deemed the low meter density per mile unprofitable.

What sparked with those 10 farmers has fused into a membership that is more than 18,000 members strong.

When we surveyed members about the possibility of providing broadband service through the cooperative, that spark for rural connectivity reignited.

What began in 2020 as a five-to-seven-year project was completed within four years and has become a part

of the cooperative. Now, high-speed, fiber internet is available to all members!

The system-wide buildout has allowed Central to begin creating an interconnected communications network, which will help bring more stability to our system. The fiber connection will help manage the electric grid and field applications more efficiently by allowing staff to identify outages more quickly and improve reliability.

The completion of the fiber buildout is one of our most impactful accomplishments this year. Centranet has created connectivity for more than 10,000 members and is available to all members. This connects us to the same mission that started our organization 86 years ago while contributing to Central’s goal of affordability.

While electricity prices climbed across the state, Central continued to have one of the lowest residential rates in the state among cooperatives in Oklahoma. This is an amazing accomplishment that showcases Central’s priority, our members.

While Central’s meter density remains at five meters per mile of line, new electric services and internet subscribers have made Central’s growth in 2023 the highest we’ve ever had, and we know there is more to be done.

This year reminded us that empowering our members and communities is just as important now as it was 86 years ago.

Hunter Robinson, CEO

2

Prioritizing the

central member At Central, we have an obligation to our members to utilize resources wisely and create a strong financial foundation to help stabilize rates. We take pride in having one of the lowest residential rates across Oklahoma cooperatives.

HOW DOES CENTRAL COMPARE? Based on data from EIA.gov.

2022 Utility Bundled Retail SalesResidential (Data from forms EIA-861- schedules 4A & 4D and EIA-861S)

3

Prioritizing members not only means focusing on stabilizing rates but also giving back to the membership.

During the year, Central returned $515,612 in capital credits to members. Central works hard to be responsible stewards that our membership can trust.

9.92 ¢

10.96 ¢

11.73 ¢

12.64 ¢

13.41 ¢

15.64 ¢

Central

Oklahoma Average

Oklahoma Co-op Average

Investor Owned Utility

Local Municipal Utility

National Average

PER K WH

PER K WH

PER K WH

PER K WH

PER K WH

PER K WH

Financial Report Operating Revenues Purchased Power Distribution - Operations Distribution - Maintenance Consumer Accounts, Customer Service, Sales Administrative and General Depreciation and Amortization Taxes Interest On Long-Term Debt Other Interest and Other Deductions Total Cost of Electric Service Patronage Capital and Operating Margins G&T and Other Capital Credits Other Non-Operating Margins Net Margins

CONSOLIDATED ASSETS

2023 2022 $71,990,797 $66,136,214 $39,081,496 $36,798,584 $7,310,103 $6,657,737 $2,827,387 $3,638,629 $1,768,959 $1,863,639 $4,439,131 $4,439,925 $8,772,654 $6,927,249 $36,458 $47,601 $4,657,733 $2,276,721 $1,463,699 $1,167,296 $70,357,620 $63,817,381 $1,633,177 $2,318,833 $3,364,967 $2,219,250 ($3,273,622) ($2,475,575) $1,724,522 $2,062,508

2023 2022 $240,492,192 $185,738,426 $42,256,940 $39,574,127 $21,024,446 $28,939,912 $0 $541,271 $303,773,578 $254,793,736

Net Utility Plant Other Property and Investments Current Assets Other Accrued Assets Total Assets

CONSOLIDATED LIABILITIES AND EQUITY Capital Equity Long-Term Debt Current Liabilities Other Long-Term Liabilities Total Liabilities and Equity

2023 2022 $86,469,436 $84,382,075 $181,160,961 $116,200,527 $25,470,008 $42,336,564 $10,673,173 $11,874,570 $303,773,578 $254,793,736

L IA T N

$72

40%

CO L CIA ER M M

57% RE SID E

FOR YEARS ENDING DECEMBER 31, 2023 AND 2022

Million Revenues

2023 REVENUE 3% INDUSTRIAL

4

Small Change makes

a big difference While focusing on members’ needs, Central works toward the sustainable development of our local communities. Central does this through safety and educational programs, Operation Round Up and the Central Community Foundation. Just like our cooperative, Operation Round Up and the Central Community Foundation are member-led.

Since 2006, members have opted to round up their monthly electric bill to power our local communities.

These funds are distributed through grants from the Central Community Foundation.

In 2023, $79,825 was distributed through 54 grants to local nonprofits and residents.

Grants are given in health care, disaster relief, education, community purpose and personal need categories. While each members’ donation does not exceed $11.88 per year, the small change adds up and makes a big difference within our communities.

One hundred percent of members’ contributions are donated locally and managed by the Central Community Foundation board, which is made of members from each Central district.

Thank you for participating and making a big difference within our seven-county service area. Learn more about the Central Community Foundation at mycentral.foundation.

Operation round up provided

$79,825 and 54 Grants COMMUNITY FOUNDATION

Allocated to

Approved For

local nonprofits and residents 5

Be Safety Smart Central linemen gave more than 20 live-line safety demonstrations to schools, groups and organizations during 2023. The presentations focus on electrical safety and the do’s and don’ts when near live electricity.

Scan the QR code to learn more about the program or reserve a demonstration.

Empowering members

& Communities Youth Tour The 2023 Youth Tour winners, Hayley Teter and Ava Litviak, won the all-expense paid, week-long trip to Washington, D.C., where they visited national monuments, historic sights, Smithsonian museums and visited with members of Congress.

Available to high school juniors attending school within Central’s service area, five students were chosen through an essay and interview competition. Two were selected to attend the trip, and the remaining three received $1,000 scholarships.

Learn more by scanning the QR code.

Co-op Kids Energy Camp Central offers two scholarships to attend Energy Camp, a summer camp near Hinton, Okla. hosted by the Oklahoma Association of Electric Cooperatives. Eighth-grade students compete through an essay competition to attend the threeday camp.

The 2023 winners, Willow Mattox and Gavin Oliver, stepped into a set of lineman hooks, climbed a utility pole, rode in a bucket truck and learned how electricity is generated.

Learn more by scanning the QR code.

More than 400 children and grandchildren of Central members participate in the Co-op Kids program. The program is designed to introduce children to the world of electric cooperatives and electrical safety.

The second Co-op Kids Day was held in April 2023 where the 86 participants visited with Central linemen; met Willie Wiredhand, the electric cooperative mascot; and learned about electrical safety.

Members’ children and grandchildren can participate in the free program.

Learn more about the program by scanning the QR code.

6

The MEMBER EXPERIENCE 1.7

HOURS 7

AVERAGE OUTAGE DURATION PER MEMBER

.86 AVERAGE OUTAGES PER MEMBER

99.9%

SYSTEM RELIABILITY UPTIME MEMBERS EXPERIENCE

Improving Reliability by

Minimizing Outages A brief interruption to your service, blinks are typically caught by reclosers as they interrupt the flow of electricity for less than a second. Although you may experience flickering lights, these blinks mean Central’s equipment is preventing outages as it should.

Blinks can be caused by contact or damage to equipment from tree branches, animals or lightning making contact with energized lines.

1

While these damages may not be enough to cause members to lose power, if the issue is not addressed, it can lead to greater issues such as large outages.

“We started focusing on blinks nine years ago and it has paid off tremendously in reduced outage times,” said Larry Gordon, Central’s smart grid technician.

“We can often fix the issue without members even knowing.”

While Central has prioritized identifying the cause of blinks for nine years, Centranet has allowed for even more advancements to the system.

Adding a fiber connection to the

Central Cooperatives Energy Utilities Municipal Investor Owned

2024 ACSI® Score 86 78 75 75 74

electrical grid and field applications has allowed us to monitor those devices in real-time. This has helped Central monitor power quality better and manage outages more efficiently to improve reliability.

“Data from this technology allows us to identify fault currents on substations and lines allowing us to locate faults,” Gordon said. “It has made our system more reliable and safer.”

Focusing on these momentary blinks in the system has reduced outage time for members by half. In 2023, member’s average outage time was 1.7 hours compared to the 3.4-hour average a decade ago.

Identifying ways to improve reliability through reviewing system reports, line inspection and prioritizing right-ofway clearance has become an integral part of Central’s operations to deliver dependable service.

The next time you notice your microwave clock is blinking, you can rest assured by knowing Central is on it.

Compared to publicly measured energy utilities in the ACSI® survey of customers rating their own energy utility. Results based on data provided by Central Rural Electric Cooperative, collected between November 27-December 30, 2023. ACSI did not regulate the survey administration or sample size.

ACSI and its logo are registered trademarks of the American Customer Satisfaction Index LLC. For more about the ACSI, visit www.theacsi.org.

8

What are

Rural breakers saying?

9

“I love Centranet. I had a different internet provider previous to Centranet being installed and needless to say Centranet is so much faster and costs me less every month. Keep up the good work, Centranet!”

“Never have internet issues with Centranet. When they do maintenance they always let us know when to expect it and it is always overnight. We could barely get internet where we live before and now we have incredibly fast and incredibly reliable internet!”

-Jeff, Google Review

-Rebecca, Google Review

Thank you

Rural breakers The goal of Centranet was to give every Central member access to high-speed, fiber internet. Now, nearly a full year ahead of schedule, we’ve completed that goal!

Services became available to all Central members on March 22, 2024.

At the start of the buildout, we continuously heard from Central’s members about how the lack of connectivity had been a problem across rural Oklahoma for years.

Now when we meet members and subscribers, we get to hear about the amazing things they’re doing with their high-speed internet.

More than 10,000 members are now rural breakers, 381 members now have Voice over Internet Protocol Watch Centranet’s announcement video by scanning the QR code!

phone service and 104 businesses are connected through Centranet.

What began as a vision for high-speed reliable internet service is now a reality. Just as rural electrification did in the 1930s, Centranet is improving rural lives.

This year, we’ve had exponential growth through feeder openings, miles built, VoIP and internet subscribers. For us, this is just the beginning. Thank you to all of the rural breakers who have been on this journey with us. We are excited to continue to serve you!

MARK PRATHER, PRESIDENT OF FIBER

The road to

rural connectivity Imagine coming home after a hard day’s work and eating dinner in the dark because you don’t have access to electricity.

That’s exactly how life was for ninety percent of rural homes in Oklahoma in 1938.

Considered a luxury at the time, connecting rural homes to electricity was a priority for 10 local farmers when they took advantage of a federal program offered by the Rural Electrification Administration and organized what is now known as Central.

The newly formed cooperative borrowed $85,000 from the REA to construct a rural distribution system to provide electricity to 141 local farms and homes.

Eighty-six years later, Central’s fiber subsidiary Centranet has provided members with connectivity to a different kind, high-speed internet.

11

According to a 2018 study by the Federal Communications Commission, only 48% of rural residents in Oklahoma had access to a broadband connection. This was significantly lower than the 74% at the national level.

Central’s board of trustees viewed internet service not as a luxury, but a tool for a better quality of life. In 2020, Central’s subsidiary, Centranet, was created.

“Not everyone wants to live in a town, and they shouldn’t be disadvantaged by a lack of connectivity,” said Mark Prather, Central’s president of fiber.

“Broadband connectivity for our rural members is just as important as other utilities.”

The full-system fiber buildout began in October 2020 as a five-to-sevenyear project. For many Central members, Centranet has improved the way they live.

“Centranet has been a game changer for those of us living in rural Oklahoma,” said Michael Weaver through a Google review for Centranet. “With it, I easily finished my college degree online, and the wife was still able to work from home without any problems.”

Central celebrated opening the final feeder and providing access to all members on March 22, 2024.

Creating connectivity for the rural membership base has connected Central to its roots and members closer than ever before.

For several Central members, having high-speed internet is a completely new experience. An experience we imagine is similar to how Central members felt in 1938 when they were able to turn on the lights in their homes for the very first time.

The road to

rural connectivity Begins with a mission of Centranet is available to all Central members

March 2024

Central serves 24,307 meters on 4,531 miles of line

Dec. 2023

Centranet serves the first subscriber

July 2021

Central’s board of trustees approves system-wide fiber buildout and establishes Centranet

Aug. 2020

All of Central’s substations convert to using a fiber communication system

June 2010

Central converts from using meter readers to an Automatic Metering System

19802001

Central serves 9,680 members and maintains 3,166 miles of line

Dec. 1980

Central celebrates its 10-year anniversary and serves 2,124 members

Dec. 1949

An $85,000 loan is secured to build 172 miles of line and serve 141 farms and homes

April VOLUNTARY VOLUNTARY AND AND MEMBERSHIP 1939 OPENOPEN MEMBERSHIP

The first annual meeting is held, and State is dropped from the name

Feb. 1939

Seven cooperative Principles VOLUNTARY VOLUNTARY AND AND OPEN MEMBERSHIP OPEN MEMBERSHIP

AUTONOMY AUTONOMY AND AND INDEPENDENCE INDEPENDENCE

May 1938

Central State Rural Electric AUTONOMY AUTONOMY AND AND Cooperative is organized INDEPENDENCE INDEPENDENCE Rural Electrification Act is established

and operates by the

May 1936

VOLUNTARY AND OPEN MEMBERSHIP

DEMOCRATI VOLUNTARY AND DEMOCRATIC VOLUNTARY AND MEMBERS’ MEMBERS’ MEMBER DEMOCRATIC DEMOCRATIC OPEN MEMBERSHIP MEMBER OPEN MEMBERSHIP ECONOMIC ECONOMIC CONTROL MEMBER AUTONOMY AND MEMBER EDUCATION, CONTROL PARTICIPATIONTRAINING AND CONTROL INDEPENDENCE PARTICIPATION CONTROL INFORMATION

MEMBERS’ DEMOCRATIC MEMBERS’ DEMOCRATIC ECONOMIC MEMBER AUTONOMY EDUCATION, MEMBER AUTONOMY AND ANDECONOMIC EDUCATION, PARTICIPATION CONTROL COO PARTICIPATION INDEPENDENCE TRAINING EDUCATION, CONTROL INDEPENDENCE EDUCATION, TRAINING AND AND COOPERATION COOPERATION A INFORMATION TRAINING TRAINING AND AND INFORMATION AMONG AMONG COOP CONCERN FOR CONCERN FOR INFORMATION INFORMATION COOPERATIVES COOPERATIVES COMMUNITY COMMUNITY

EDUCATION, EDUCATION, TRAINING TRAINING AND AND INFORMATION INFORMATION

COOPERATION COOPERATION AMONG AMONG COOPERATIVES COOPERATIVES

CONCERN CONCERN FOR FOR COMMUNITY COMMUNITY

12

YOur

cooperative Covering a service area of seven counties, Central serves more than 18,000 members and maintains more than 4,500 miles of line.

Central’s service area is divided into seven districts, where trustees are elected by the membership to serve.

Trustees participate in setting policies and making decisions to benefit Central and our members.

The growth and success Central has had in the past 86 years has been completely dependent on member participation. Electing your trustee, attending cooperative events, voting on bylaws and serving on the board are all a part of what makes our organization successful. Thank you for your efforts in helping your cooperative thrive!

Meet your trustees

James Wells, Vice President District 6

Carol Dvorak, President District 3

Randy Wedel District 1

13

Sid Sperry District 4

Greg Tytenicz, Secretary/Treasurer District 2

Ken Starks District 5

Randy Ethridge District 7

2023

In numbers

4,531 MILES OF LINE

100

EMPLOYEES

22

24,307

136 MW 5

METERS PER MILE OF LINE

SUBSTATIONS

PEAK DEMAND

METERS

14

mycentral.coop Phone 405-372-2884 | 3305 S. Boomer Rd. P.O. Box 1809 | Stillwater, OK 74076