Board election results, cooperative growth, new CEO introduced

Board election results, cooperative growth, new CEO introduced
DREMC Annual Meeting held in Winchester

(August 19, 2019) Marshall county native John Moses was re-elected to a three-year term on the DREMC Board of Directors for Zone 5 (Marshall and Giles counties). Moses defeated challenger R.L. Williams by a margin of 128-49 in the election held August 12-16 at the co-op’s Lewisburg and Chapel Hill offices.

Announcement of the election results was made at the annual membership meeting held on August 17 before approximately 200 DREMC members, employees and guests at Franklin County High School in Winchester.

The results of the election were tallied and validated by the Credentials Committee, a seven-person committee made up of DREMC members from across the service area. Election results were announced at the meeting by Credentials Committee Chairman Mark Webb.

Four unopposed directors were re-elected to new terms, and board officers were named in the reorganizational session following the meeting. Baxter White, Zone 1 (Coffee and Warren counties); Laura Willis, Zone 2 (Franklin, Grundy & Marion counties, University of the South); Buford Jennings, Zone 3 (Moore and Lincoln counties); and Dana Salters, Zone 6 (Maury, Hickman, Lawrence, Lewis and Williamson counties) returned to the board of directors by acclamation vote. Barry Cooper was re-elected chairman of the DREMC board, and other officers include Buford Jennings, vice chairman; John Moses, treasurer; and Laura Willis, secretary.

Attendees heard business reports and recaps about co-op programs and projects and were introduced to Washington Youth Tour winners and new President & CEO Scott Spence. They also registered for door prizes, including a portable generator, electronics, small appliances and sporting goods.

Cooper addressed the attendees assuring that the financial condition of the cooperative is sound and continues to invest in the network of substations, circuits and lines that maintain and increase the reliability of electric service provided to homes, farms, businesses and industries in DREMC’s 16-county footprint.

Cooper shared the announcement by Amazon that it will build a new operations center in Nashville with the project expected to bring more than 5,000 jobs and millions of dollars in investment to the region. Chattanooga, Knoxville and Memphis have also made headlines for industry announcements. This attention on the state’s urban centers makes it easy to think that opportunities are only available in big cities, but Cooper explained, opportunities are all around us.

Cooper stated in 2017 that almost half of the job commitments to the Tennessee Economic Development Department were in rural counties – 9,700 new jobs. This number was up by over 30% from five years prior.

The chairman shared with the attendees that Black Rifle Coffee Company opened its Manchester roasting facility last year as part of the company’s $6 million investment in Tennessee, creating over 50 new jobs for the area, with first consideration given to veterans.

He also shared that the Maury County area had two automotive announcements made related to GM and Toyota as well as other new industries. These companies created approximately 400 new jobs in 2018, $135 million in capital investments and $14 million in local payroll. He stated that Maury County is ranked top in the state and 20th in the nation for manufacturing job growth, according to the Tennessee Department of Labor.

The Jack Daniel Distillery and Nissan were also recognized for their economic impact and commitment to rural Tennessee.

Cooper informed the membership that DREMC provides more than power; we provide power and opportunity. He shared how a zero-interest loan fund, created from a partnership with the Rural Utilities Service helped the Coffee County Industrial Board finance their latest industrial park speculative building currently being marketed to industries.

The chairman explained how DREMC is involved with the youth in the community by sending students to Washington D.C. each summer and to Nashville for a leadership summit. He also stated that DREMC is involved with the STEM (Science, Technology, Engineering and Math) curriculum to our youngest citizens.

He also reported that DREMC gives back to the communities such as fire departments, animal shelters and cancer foundations, etc.

Cooper shared the benefits of the co-op connections card and reported how one member saved approximately $350 on her diabetic medication and another saved on a hotel stay. He encouraged those in attendance to stop by the booth set up in the lobby for more information.

He also shared how DREMC is working on being part of the solution to bring high speed internet service (broadband) to the underserved in our service footprint. He explained that DREMC is working to connect our nine offices and substations with a 300-mile loop fiber network.

Chairman Cooper closed his remarks by thanking the DREMC employees for their tireless work in keeping the lights on and recognized those that retired this past year with combined experience of 125 years.

Interim President and CEO Charles McDonald opened his remarks thanking the membership and explaining how the cooperative business model is built around seven key principles, with two of them being (1) voluntary and open membership and (2) democratic member control.

McDonald shared that his interest in the cooperative goes back some 45 years. He stated he has been back on two different occasions after retirement to assist the cooperative. He appreciated the board’s confidence in him as they conducted a nationwide search for a new CEO. He also thanked the staff and employees for making him feel as if he never left.

He updated the attendees on contracts being finalized for a collaborative agreement between DREMC and Ben Lomand Connect (a neighboring cooperative that is an existing internet service provider – ISP) and the University of the South to provide high speed internet service to the 650 locations within the University’s domain.

He stated that studies and negotiations are ongoing, but Ben Lomand will serve as the ISP and DREMC will be bringing the fiber cable to the outside of subscriber’s location. Talks are ongoing with other ISPs and DREMC is happy that the Tennessee Valley Authority (TVA) may ease regulations which would prohibit electric cooperatives from using electric revenue dollars from being used to support other services such as broadband.

He shared that a $2.14 million grant from the Appalachian Regional Commission (ARC) helped offset a portion of the fiber loop in Franklin, Coffee and Marion counties.

McDonald shared that approximately 75,000 AMI meters have been installed throughout the DREMC service area. He explained how these meters can be read remotely and daily energy use information is available via text or email to our members.

He noted one event in which the member was monitoring their usage at a vacation home and realized there was a significant jump. After the member investigated, it was found that the central unit was malfunctioning, and this could have easily resulted in a fire hazard if not detected.

Another benefit of the AMI meters, McDonald explained, is the timely outage notifications and restoration time. He told the audience that DREMC still appreciated the outage phone calls because an advanced meter cannot tell DREMC about a limb on a line, a tree down, etc. at a specified location.

He also shared the plans for the new System Operations Center which is nearing completion at the Shelbyville location. He explained that highly trained system operators and dispatchers will monitor and control the entire DREMC grid on a wall-size video screen.

McDonald explained that based on studies done recently, it is projected that the cooperative will grow to more than 80,000 members within a four-year period with the total estimated capital cost to maintain reliability and meet anticipated growth equaling nearly $72 million, stating that maintaining reliability and supporting our communities is our priority.

McDonald shared that plans for DREMC’s expected growth include two new substations, a private 35-megawatt solar farm within our service area and the introduction of new state of the art light emitting diode (LED) security lighting program, which will take effect in October of this year.

President McDonald concluded his remarks by thanking the board of directors and employees for the opportunity to serve as interim president & CEO and received a standing ovation by those in attendance.

Board Treasurer John Moses said DREMC is financially strong, with assets of just over $254 million and system equity under $115 million which represents approximately 45% of total assets.

Operating revenues and other income are just over $204 million. This was up from fiscal year 2018 primarily due to warmer than average temperatures in October and November 2018 as well as extreme temperatures in the month of May 2019, whereby 10 days were above 90 degrees and six consecutive days above 93 degrees. Adding to the positive outcome was over $300,000 savings on our wholesale power bill to TVA due to the Beat the Peak program.

Expenses for 2019 were approximately $198.9 million with payments to TVA totaling $148.7 million and these payments to TVA representing 75% of total expenses. The remaining margin of $5.6 million is used for capital improvements, taxes, loan repayments and system operating and maintenance expense.

In fiscal year 2019, 1,221 members were added, which is a growth rate of 1.6% with 1,009 of those being residential members, bringing the total membership to 76,586 as of the end of June 2019.

During the meeting Cooper introduced new DREMC President & CEO Scott Spence. Spence was one of 74 applicants for the position and comes to DREMC most recently from Arab Electric where he served as CEO.

Newly named CEO Spence greeted the crowd saying, “I am excited to begin my time with DREMC and look forward to working with the employees and members in moving DREMC forward.”

The 2018 Washington Youth Tour winners were introduced, and the door prizes were awarded after the business session.