PRESIDENT'S MESSAGE

By Todd Ware, President & Chief Executive Officer

During our recent annual meeting, I had the opportunity to reflect on our cooperative's accomplishments and the challenges we faced in 2024. Here is a high-level recap from my presentation at the May 5, 2025 Annual Meeting of members.

2024 - A Year of Progress

2024 continued to be a year of growth for the cooperative, including plans and efforts to prepare for significant growth in the future. Major projects on all sides of our business saw progress or were completed. Some of our efforts include the New Albany pipeline extension, Searfoss Station, Hebron Industrial Park, Sanoh expansion, the installation of the second Smith’s Mill transformer, and many RDOF fiber pole replacements. Last year, we added 500+ natural gas services, 300+ new electric services, and 200+ propane members.

Safety

We remain committed to the safety of our employees and members, as we work hard every day to bring you safe and reliable energy. As we have in the last several years, we continue to participate in national peer review safety programs and are viewed as state and national leaders within these programs. Once again, the safety metrics were better than state and national industry averages. Our electric cooperative celebrated over 25 years without a lost-time injury.

Financials

Consolidated financial results for the year were above budget, as we reported a positive net margin of over $9 million compared to the budget of just under $7 million. This number was well above the budget due to several factors, including an expense reduction of over a million dollars and farmout income of over $1.5 million. Our interest expense was lower than budget based on delays in capital expenditures in 2024. These positive variances were somewhat affected by the lower member sales due to mild weather throughout the year. We expect our capital expenditures to rebound in 2025 as we continue to prepare for growth on our system. The consolidated comprehensive income was $9.9 million, higher than budgeted. These results raised our equity position to just under 25%.

Electric

The electric division continued improving reliability and member outage times during 2024. Our commitment to reliability is evident in the $10 million spent on capital improvement projects. These projects focus on rebuilding aging infrastructure and constructing new distribution. The focus on aging infrastructure, as well as continued right-of-way work, reduced our outage times by almost 1% from 2023. In addition, our three-year system loss average was just over 5%, also comparable to 2023.

Natural Gas

The natural gas cooperative continues to experience significant new growth as we added over five hundred new residential members. In 2024, the natural gas cooperative spent just over $16 million on capital improvement projects. Over fourteen miles of pipe were replaced or added, including upgrading aging infrastructure. The replacement of this aging infrastructure and our focus on leak repairs have continued to reduce our unaccounted-for gas and outstanding leaks.

Administrative

We strive every year to provide the best service to our members. We use several metrics to evaluate our level of service, including the American Customer Satisfaction Index (ACSI), which scores our ability to meet your expectations and level of satisfaction. Our ACSI scores continue to be in the top half of all cooperatives in the state and above those of our competition. We have also worked hard to improve our communications using multiple methods to inform you about what is happening at your cooperative. This year, communications improved significantly through text notifications, as well as digital TIMES magazines. As with all businesses today, we also devote many resources toward cybersecurity and protecting your information. These methods include an annual audit of our system against potential cyberattacks and increased employee training requirements. We are constantly looking for additional methods to protect our systems.

The future continues to be bright for the cooperative and our communities. Opportunities will continue to bring massive growth and challenges, and we look forward to another productive year in 2025.