For me, this is a special annual meeting because our team chose to use my favorite character, Willie Wiredhand, as this year’s theme. A little history about Willie Wiredhand – in December 1948, the Rural Electrification Magazine announced a contest for the best design of a mascot to symbolize rural electric cooperatives. From that contest, Willie Wiredhand was officially selected by the National Rural Electric Cooperative Association to represent electric cooperatives nationwide and has been a household name ever since.

The annual meeting is a great opportunity to reflect on our achievements and acknowledge the challenges we have faced since we last met, and there have been both. Tonight, I am going to share a lot of cost-related information, which I feel is important to provide.

ELECTRIC DIVISION HIGHLIGHTS

There is so much uncertainty in the wholesale power market today with supply chain issues and increases in both fixed and variable production costs. In 2022, Hoosier Energy’s average wholesale power cost among its 18 member cooperatives was $79 per MWh. Beginning in 2023, it had increased to $82 per MWh. Now with the 2023 mid-year update, the average cost is $84 per MWh. This has been a common theme for electric utilities across the nation. Jackson County REMC’s wholesale power cost last month was $94.65 per MWh, and it does not look like there will be relief anytime soon.

Unfortunately, there is not a lot of good news when it comes to retail rates, either. With the increases in our wholesale power costs, our retail rates have increased as well. When compared to 2021, our average retail cost per kWh increased 7.2% in 2022. But that is not the end of the story. Already this year the retail price per kWh has increased another 6.5%.

We are always looking for opportunities to reduce our expenses. However, inflationary pressure has affected everything we use. In 2021, a 25 kVA pad-mount transformer was $1,450; today, the cost has increased 44% to $2,092. A 40-5 pole in 2021 cost $171; today, the cost has increased 53% to $262. And a bucket truck that cost $250,000 in 2021 has increased 56% to $390,000. These are just a few examples of the cost increases we are experiencing, but these items are essential to provide the service you expect.

We know electric reliability is important to you. In 2022, we spent over $5.7 million on electric distribution maintenance, of which $3.9 million was in right-of-way maintenance costs alone. As with all things, we have experienced significant increases in our right-of-way maintenance costs. In 2020, the right-of-way budget was $3,322 per mile. For 2023, the budget increased 36% to $4,528 per mile. While distribution line maintenance and right-of-way clearing is a significant expense, it is critical in providing safe and reliable service.

When talking about reliability, transmission line outages continue to impact our members. For 2022, 36% of the outage minutes were related to transmission outages. Even with the large transmission line outage in May 2022, we still ended the year with a system-wide reliability percentage of 99.95%. We have made significant investments in distribution automation to reduce outage times. However, we have no control over transmission line outages. Recently, we met with representatives from Hoosier Energy and Duke Energy to express our frustration with the number of transmission line outages we continue to experience. While we felt like we were heard, only time will tell if the meeting makes a difference.

FIBER DIVISION HIGHLIGHTS

In May 2017, the board of directors made the decision to provide fiber-optic broadband service to our members to bridge the digital divide that existed throughout our service territory. Six months after that decision, we started construction. Today, 96% of our members have access to our fiber-optic network, with 2,150 miles of fiber-optic cable serving 12,000 fiber-optic broadband accounts and 350 telephone accounts.

We still have an area in Jennings County to build once the electric distribution line rebuild project is complete. But once it is complete, 100% of our members will have access to our fiber-optic network.

The fiber-optic broadband project is a testament to our commitment to meet the evolving needs of our members and our dedication to building a stronger, more connected community. Similar to when we started providing electric service 85 years ago, fiber-optic broadband service has helped change the lives of our members.

I think it is important to note, no electric revenue has been used to fund the fiber-optic project. We have an electric division and a fiber division, so retail electric rates do not reflect fiber-optic related costs.

JACKSON SOLUTIONS

Finally, as a way for Jackson County REMC to provide additional products and services to our members, we created a subsidiary called Jackson Solutions. Through Jackson Solutions, we will be able to offer products and services which do not fall under the core business model of Jackson County REMC. Two of the first things we plan to offer are Honeywell residential security systems and GenerLink generator transfer switches. Look for more information coming soon on our website, social media and in Indiana Connection magazine.

In closing, none of what we do would be possible without the collective efforts of our dedicated employees and our board of directors. Their commitment and hard work have been the driving force behind our accomplishments with a shared purpose to serve our members. Together, we will continue to follow our mission statement to deliver the advantages of electricity and essential services to our members reliably, economically and responsibly.

THANK YOU,
MARK MCKINNEY | JACKSON COUNTY REMC CEO

2023 ANNUAL MEMBERS WHO ATTENDED! MEETING RECAP

• John Trinkle, Mark Trisler and John Miller were reelected to another three-year term on the board.

Information on the voting:

• 1,630 early paper ballots were submitted.

• 1,042 early web ballots were submitted.

• 305 paper ballots were submitted at the annual meeting.

• A total of 3,105 members registered either in the early voting process or in person.

• 1,578 people, including guests, attended the annual meeting.

• The business meeting had an estimated 200 people in attendance.

• The Kids’ Zone featured Brownstown Elementary and Boys and Girls Club Makerspace.