Before an audience that filled the auditorium here for the 73th annual membership meeting, General Manager John Dugan and President Frankie King reported Thursday that the co-op continues strong.
About 325 attended, more than twice the 150 required for a quorum.
Dugan said that the co-op constructed 43 miles of new line in the 10 counties in which Upshur-Rural operates.
Reelected as directors were District 1, Frankie B. King; District 2, Joe Don Beard; and District 3, J.C. “Sonny” McKnight.
“This 43 miles of new line was to connect 956 new services, or members,” Dugan said.
“At the end of 2010, there were 44,281 accounts billed for an annual billing of $76,388, 082,” he added.
“There were 290 miles of transmission line and 5,833 miles of overhead distribution line and 253 miles of underground distribution line in place.”
Dugan said that the combined total of line equals 6,376 miles.
He said that the total plant investment is $155,547,721. There were 926,080,049 kilowatt hours sold in 2010, compared to 863,044,098 the year before, an increase of 7.3 percent.
Capital credits were allocated from 2010 margins to each member’s account using a factor of 9.487 percent on residential accounts.
“The cooperative’s equity position was 69.19 percent at the end of 2010,” Dugan said. “This is a strong position to be in and allows your board of directors to analyze the financial position regarding the retirement of capital credits.”
He said that after bankers’ permissions were received, the board directed a retirement of capital credits of about 1.4 percent, or about $1,227,092.
“Retiring capital credits is a juggling act where you balance the cost of borrowing money, paying for increased costs of operations such gasoline and diesel and materials, employee payroll and benefits, and keeping rates the same,” Dugan said.”Your electric system belongs to you and one way your ownership is reflected is through capital credits—your share of what’s left over after the cooperative pays all its expenses.
“The retirement, as the ones in the past 24 years, has been no easy task, after the cooperative pays all its expenses,” he said, “but due to the action of your board of directors and the employees of the cooperative operating an efficient organization, it will be possible.”
Dugan said that the Gilmer-based co-op’s rates continue to be among the lowest in Texas.
“If you took an average July or August 2010 electric bill, Upshur’s was $88.94 for 1000 kWh, while surrounding utilities were as high as $118 in Tyler and $91.82 for a nearby utility. But remember, URECC paid back capital credits,” Dugan said.
He noted that when anyone fails to eventually cash a captial credits check, the money reverts to the state; the law now sends some of the money back to the co-op. This has been used to fund college scholarships for members’ families: two $4,000 scholarships. two $2,000 scholarships and 20 for $1,000.
Dugan said there were 88 full-time employees at year end.
“We are currently at 88, with two Distribute Education students and one college intern,” Dugan said. “They worked 185,412 hours of regular time and 17,437 hours of overtime for a total payroll of $4,812.928.”
The Annual Report given to members at the meeting shows where the co-op’s electricity service dollar goes:
• $.73 to purchase electricity
• $.12 for operations and maintenance
• $.07 operating margins
• $.06 depreciation expense
• $.02 interest expense
It also shows the resource diversity used by the coop, with power generated from three primary sources:
• Coal/lignite, 59 percent
• Gas, 32 percent
• Hydro, 9 percent
President Frankie B. King of Pittsburg pointed out that this is Upshur Rural’s 73th year in business.
He asked the audience to imagine what life was like not that long ago, before 1935 when rural areas did not have electricity. It was in 1935 that the Rural Electrification Administration began.
Investor-owned power companies did not want the expense of running lines in the countryside.
The answer was member-owned cooperatives.
He said that Upshur Rural is today “one of the strongest co-ops in the state, if not the nation.”
Upshur Rural switched its financing from a government agency to private lenders, and paid off its debt to the government.
It has not had to borrow additional money.
He praised John Dugan, who he said had “put together one of the finest staffs I’ve ever come across.”
King also told the members that there are a lot of people “working behind the scenes” to make the co-op efficient and cost-effective.
The staff is “very dedicated,” he said.
He said that the board “always keeps the best interests of the members at heart.”
Bob Duvall, CPA, the independent outside auditor who reports to the board, told the members that “the co-op is in sound financial condition.”
The membership then proceeded to reelect three directors—King in District 1; Joe Don Beard, District 2; and J.C. “Sonny” McKnight, District 3—by acclamation.