PEC 2018 Annual Report final .qxp PEC AR 3/15/19 10:40 PM ... · PALMETTO ELECTRIC COOPERATIVE, INC. l 2018 ANNUAL REPORT accountability Key Part of the Cooperative Difference PEC

PALMETTO ELECTRIC COOPERATIVE, INC. l 2018 ANNUAL REPORT

accountabilityKey Part of the Cooperative Difference

PEC 2018 Annual Report final .qxp_PEC AR 3/15/19 10:40 PM Page 1

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Financial Accountability:Returning revenues after operating costs are met, our Capital Credits program gave back $3.2 million to ourmembers in 2018. This is money that goes back into thepockets of our hardworking members to help themenhance their life and family.

Service Accountability:From the clearing of rights-of-away and the placement ofpower lines underground, we not only enhanced theaesthetics of our beautiful community, we were also ableto make our distribution system more resilient towithstand strong winds, which helps reduce outages ininclement weather. We worked with cooperatives acrossthe nation, the Department of Energy and the NationalRural Electric Cooperative Association to secure ourelectric grid and safeguard against cybersecurity threats tohelp ensure our members’ sensitive personal informationremains secure.

Community Accountability: Once again, many of our generous members rounded uptheir utility bills in the Operation Round Up®program. Bydoing so, members helped us award $513,318 in grantsthat funded community service projects, including BrightIdeas scholarships for teachers with innovative classroomprojects. Funding was also given to many social serviceorganizations, nonprofits and public assistance projectsthat include Meals on Wheels, Coastal DiscoveryMuseum, the Sandalwood Community Food Pantry, theBoys & Girls Club of Hilton Head Island and many others.

Jeremiah E. Vaigneur A. Berl Davis Jr.

executive report 2018

A. Berl Davis Jr.P r e s i d e n t a n d Ch i e f E x e c u t i v e O f f i c e r

Jeremiah E. VaigneurCha i rman o f t h e B o a r d

When Palmetto Electric Cooperative was formed in 1940, ourmain mission was to offer an alternative source of electricitywhen the large investor-owned utilities declined to bringpower to rural areas. Created as a not-for-profit utility ownedby its customers, we have always operated with transparencyand community-driven service that benefits every memberand every part of our community. We are proud thataccountability is first and foremost among our core operatingvalues, and we know that it is a key part of the cooperativedifference. Because our sole purpose was built on offeringaffordable electric service to an underserved area, our levelof accountability has continued to make us a trusted, long-term partner to help drive the prosperity of Hampton,Jasper, Allendale and southern Beaufort counties.

Today, accountability to our members—and to our entireservice area—remains our guiding principle. Every morning,our service trucks roll out to work through the day and nightand through weekends and holidays—not to mention everypossible weather event—to bring reliable service to ensureour community’s quality of life. But we are also proud to be accountable to the community in other ways—supportingeducation and schools, job creation and enhancing ourinfrastructure.

There are many other ways Palmetto Electric has continuedoperating on the promise of accountability to our members—manyof which you can read about throughout this annual report. Whereother utilities are more concerned with profits over people, webelieve it is our honor to serve every member to the best of ourability and to promise we will always be accountable to our friends,our neighbors and the community we call home.

Sincerely,

Palmetto Electric offers accountability in the following ways:


From the RBC Heritage’s 10th anniversary as a Green Power partner to instructing children about electric safety with Safety Days,Palmetto Electric enjoys being a dependable and accountable partner with the community. Last year we were proud to offer suchprograms as Co-op Connections®, our discount pharmacy card and app that has helped members save $103,648 in prescription drugcosts—part of the total of $3,125,001 that members have saved since the program’s inception in 2009.

Throughout 2018, we also worked with various organizations to enhance our service area by sponsoring festivals, promoting economicdevelopment to bring industry to our area and do our part to be a good corporate neighbor. It was also ourprivilege to work with many public service organizations, nonprofits and other groups to help enhance ourmembers’ quality of life throughout Hampton, Jasper, Allendale and Beaufort counties.

“Palmetto Electric’s OperationRound Up donated funding to helpus create the Childcare Gym and anew computer lab at our newrecreational center and, withouttheir support, we would not havebeen able to do that and provide it to so many children in ourcommunity. We have a long historywith Palmetto Electric and they havehelped us out in many different ways; not just the general servicesthat they provide to the community,but also through their programming and long-term support of ourorganization in general.”

accountabilityin Community Partnerships

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Frank SouleExecutive Director of the Hilton Head Island Recreation Association


Throughout our history, Palmetto Electric has taken an active role inpromoting and enriching the educational efforts of members and their families. We know that nothing is more powerful than knowledgeand that’s why we do our part to help out schools and individualteaching programs. We follow and support the work of local teachers through the Bright Ideas grant program that providesfunding for innovative classroom-based education projects. We alsooffer financial assistance to deserving students through the PalmettoElectric Trust (PET) and Women Involved in Rural Electrification (WIRE)educational scholarships, along with attending Career Days in localschools throughout our service area—providing accountability to our youngest members to help them build a solid future.

Palmetto Electric extends our educational support by sponsoringstudents to attend the Washington Youth Tour and the CooperativeYouth Summit—ways to inspire young people as to how cooperativeswork on the state and national level, and to better understand thenonprofit business model. We also offer online educational programssuch as enLIGHTenSC that gives students a course on topics such asrenewable resources, recycling and energy conservation.

accountabilityin Education

“There is always a segment of our student population that is vulnerable to findingthemselves in a homeless situation. All of us at the Jasper County School District

greatly appreciate Palmetto Electric for their ongoing support to the homelesscommunity of our county and the students who belong to these families. The ‘hygiene

duffel bags’—supplied by Palmetto Electric employees and members of WIRE areespecially appreciated. Filled with toiletries and a blanket, they provide a sense of

normalcy to a chaotic situation—allowing us to put needed resources in the hands ofchildren when they are most vulnerable.”

Tillmon M. Ancrum, I, M.Ed.Director of Student Services & Alternative Programs, Jasper County School District

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Palmetto Electric employee WIRE members deliver duffel bags full of everyday essentials for the Jasper County School District’s “Kids in Transition” program.

(l to r) Andrea Breton; Tiffany Cuylear; Missy Santorum; Virginia Gaffney; Ericka Gordon, Office of Student Services,

Jasper County School District; Michelle Tyler and Annette Mole


As a good steward of our community, Palmetto Electric puts environmental accountabilityinto every aspect of our service and programming. We realize that we live in a treasured,beautiful part of our state, and we want to do everything possible to preserve and nurtureour precious resources for future generations. To this end, we consistently offer proactiveenvironmental measures that include recycling, offering renewable Green Power tomember and business customers, and we also continue working diligently to improve theefficiency and reliability of our service during inclement weather.

accountabilitywith Renewable and Reliable Commitments

“Palmetto Electric’s Universal Waste Program allows us tocollect spent lamps, ballasts and batteries—all of which wecontract for proper removal and disposal, including lampsour own outdoor lighting program and ones used in ourAnnually, we recycle an average of 1,500 spent lamps100 lb of spent batteries that otherwise would end uplandfill. Other recycling efforts by Palmetto Electric includesale of scrap wire conductor and metals, wooden palletsreels returned to pipe and wire manufacturers for re-usewith cardboard and paper products—all of which reduceimpact on local landfills while also returning funds to usassist in reducing the cost of power to our consumers.”

Locally Owned—Locally ServedAs a member-owned cooperative, Palmetto Electric is accountable to the community in everyway. Each year, our annual meeting gives members a voice and lets them approve bylawsthat govern our co-op to ensure we are serving the community to the best of our ability. As anot-for-profit utility, our Capital Credits program returns additional revenues to membersafter all expenditures have been met. In 2018, we also looked out for members in otherways, including innovative cyber security measures, and using state-of-the-art firewalls toprotect assets and personal information. Finally, it has been our pleasure to offer the highestdegree of accountability in everything we do for our members. From service to costs, ourboard and staff are always here to listen to your concerns, questions and suggestions. Weare proud to operate our utility with total transparency in our never-ending quest to enhancethe community we share with you.

“Board Governance, transparency and accountability have always been subjects of greatimportance to our Board. Community involvement, economic development and prompt, efficientservice to our members are also a top priority. At the same time, technology is advancing at a highrate of speed which also brings opportunity with caution for our co-op. We thank everyone for theirmembership and together we will provide for a better tomorrow where we work, play and live.”

Jimmy RowePalmetto Electric Cooperative Board Member

Bob ShierMaterials Manager, Palmetto Electric Cooperative, New River District Office

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C. Alex UlmerVice Chairman

BEAUFORT COUNTY

Eunice F. SpilliardsSecretary/Treasurer

JASPER COUNTY

Jeremiah E. VaigneurChairman of the Board

JASPER COUNTY

Henry Driessen Jr.BEAUFORT COUNTY

James O. FreemanHAMPTON COUNTY

Dr. Earl Bostick Sr.JASPER COUNTY

Carolyn GrantBEAUFORT COUNTY

Jimmie D. McMillanHAMPTON COUNTY

D. Terrell SmithHAMPTON COUNTY

William J. NimmerBEAUFORT COUNTY

James L. RoweBEAUFORT COUNTY

David A. SolaroBEAUFORT COUNTY

board of directors 2018

Palmetto Electric Cooperative isgoverned by a policy-making boardof 12 trustees—six who reside inBeaufort County, three who reside inHampton County and three who reside in Jasper County. The directors serve terms of threeyears each, with terms of twodirectors from Beaufort County and one director each from Jasperand Hampton counties expiring eachyear. These directors are elected atthe Annual Meeting of the membersand exercise all of the powers of theCooperative, except those reservedfor the members, according to the bylaws of Palmetto Electric.

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STATEMENT OF MARGINS AND PATRONAGE CAPITAL AS OF DECEMBER 31,

2018 2017Operating Revenue Operating ExpenseCost of Power ......................................Operation and Maintenance ................ Consumer Accounts ............................Administrative and General .................Depreciation .........................................

Taxes ........................................................Interest .....................................................Total Operating Expense .......................Net Operating Margins ..........................Non-Operating MarginsInterest Income ....................................

Patronage Capital fromAssociated Organizations ....................

................................................................. Net Margins ............................................Patronage Capital—

Beginning of Year...............................

Retirement of Capital Credits ...............Patronage Capital—

End of Year..........................................

The Cooperative’s financial statements are audited annually by independent certified public accountants. Copies of the audited financial statements and accountants’ reports are available for your inspection at theCooperative’s offices.

BALANCE SHEET AS OF DECEMBER 31,

A S S E T S : 2018 2017Total Utility Plant ......................................Less: Provision for Depreciation ..........

Net Utility Plant.......................................Other Property & Investments ..............Cash—General Fund................................Temporary Cash Investments ..................Accounts Receivable................................Materials & Supplies ................................Accrued Unbilled Revenue.......................Prepayments ............................................Total Current and Accrued

Assets ..................................................Deferred Charges .....................................Total Assets and Other Debits .................

L I A B I L I T I E S :Memberships............................................Patronage Capital.....................................Other Equities...........................................Total Equity .............................................Total Long–Term Debt ............................Accounts Payable ....................................Consumer Deposits..................................Other Current and Accrued

Liabilities ..............................................Total Current and Accrued

Liabilities.............................................Total Liabilities and Other Credits ........

$ 275,075,283 88,779,220

7,929,159 1,500,000 8,584,865 1,646,818 9,053,188

382,502

$ 295,265 76,299,120 8,677,235

$ 8,706,795 4,690,644

52,807,495

$ 186,296,063 16,583,070

29,096,532 8,195,175

$ 240,170,840

$ 85,271,620 88,694,286

66,204,934 $ 240,170,840

$ 266,438,234 83,744,064

12,932,903 3,680,795 7,238,357 1,493,031 9,107,722

443,100

$ 288,830 68,509,954 8,652,463

$ 11,319,311 4,403,972

55,274,267

$ 182,694,170 15,856,158

34,895,908 9,303,293

$ 242,749,529

$ 77,451,247 94,300,732

70,997,550 $ 242,749,529

$ 120,979,775 9,902,572 5,457,071

11,103,977 9,141,850 5,745,283 3,587,240

$ 130,010

1,101,220

$ 176,095,257

165,917,768 $ 10,177,489

1,231,230 $ 11,408,719

68,509,954 $ 79,918,673

3,619,553

$ 76,299,120

$ 119,640,552 9,436,046 5,302,758

11,765,270 8,971,517 5,768,480 3,783,007

$ 189,359

969,759

$ 169,519,891

164,667,630 $ 4,852,261

1,159,118 $ 6,011,379

67,017,474 $ 73,028,853

4,518,899

$ 68,509,954

20083,125

M I L E S O F L I N E

20133,225

20143,251

20153,275

20163,293

20173,319

3,600

3,200

2,800

2,400

2,000

1,600

1,200

800

400

020183,337

2

200866,186

C O N S U M E R M E M B E R S

201368,498

2014 68,600

2015 69,325

201670,193

201771,066

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

201872,609

K W H / SO L D (Millions )

2014 1,492.8

20131,358.6

20081,473.6

20151,474.7

2016 1,471.8

2017 1,451.0

2018 1,540.3

$10.3Non-Operating and Operating Margins

$18.4Interest, Taxes& Depreciation

$26.4Cost ofOperations &Maintenance

T O T A L R E V E N U E$176,095,257

H O W Y O U R D O L L A R W A S S P E N TI N 2 0 1 8

(in millions)

$120.9 Wholesale Power

financial review 2018

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For power outages, call: PowerTouch 1-866-445-5551

Hampton: 803-943-2211 Hilton Head: 843-681-5551 New River: 843-208-5551Ridgeland: 843-726-5551 1-800-922-5551 palmetto.coop

The Touchstone Energy®symbol is your assurance that we’re a community-minded electric cooperative providing high standardsof service for customers large and small.


PEC 2018 Annual Report final .qxp PEC AR 3/15/19 10:40 PM ... · PALMETTO ELECTRIC COOPERATIVE, INC. l 2018 ANNUAL REPORT accountability Key Part of the Cooperative Difference PEC

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