Over 500 Central Texas Electric Co-op customers, members and spouses, gathered in the Fredericksburg High School Auditorium on August 20, as CTEC hosted its 66th Annual Members’ Meeting. CEO Robert A. Loth III welcomed them and introduced Board President Gerald Kaspar and nine other CTEC directors in attendance. Jack Asbill, CTEC Director from Mason, Texas provided an invocation.
The business of the meeting included the election of four directors. Co-op members had previously nominated the following members to represent their respective districts at District Meetings held in June: Rex Brand, District 2 (Kerr/Real/Southern Kimble County area); Jack Asbill, District 3 (Mason/McCulloch/Menard/Northern Kimble County area); Stanley Keese, District 4 (Llano County area); and Bill Weldon, District 5 (Gillespie/Blanco County area). All were elected by acclamation. As the cooperative’s bylaws stipulate, a CTEC director’s time on the board is limited to four three-year terms.
As in previous meetings, a video presentation was shown in lieu of formal reports. This year, reports were introduced by the Board Chairman, and made by the Chairman of various oversight committees within the Board, and CEO Bob Loth.
Gerald Kaspar, Board Chairman introduced the video by welcoming the members present. He told members, “The State of our Co-op is GOOD. We are in a strong financial position, we have made reliability improvements, increased communications with members, and bottom line, you are paying less for your electric service than you were five years ago”.
Jack Asbill, Chairman of the Community Services Committee, reported that his committee’s goal is to monitor how the co-op interacts with communities in the service area, and how the Co-op communicates with members. He said, “CTEC has a 67-year history of supporting the local area with various community programs”.
Asbill highlighted the Co-op’s Operation Round-Up program, explaining that CTEC members can volunteer to “round-up” their monthly bill to the next whole dollar amount. “Average contributions are only 50 cents per month, but this small monthly donation has enabled a voluntary Board of Directors to approve 77 grants, totaling over $86,000, to help local families and organizations in the local area”, he said.
Mr. Asbill said another important activity that impacts the local area is the CTEC Scholarship Program, now in its 16th year. In 2013, 35 co-op students were awarded a $1000 scholarship, bringing the total amount of scholarship awarded to $419,000. He added that that money to fund those scholarships came from unclaimed capital credit funds, not from CTEC’s electric rates.
In student education, Asbill said that CTEC is continuing their strong commitment by annually giving three CTEC high schools students a chance to win a life changing opportunity to participate in a week long Youth Tour to Washington D.C. Since 1965, this program has helped students learn more about our nation’s government, as well as gain valuable leadership skills and tour national monuments and museums, and spend some time visiting with their legislators. CTEC also sponsors a 6th grade energy conservation class at all middle schools within the service area. “With power-supply issues looming, there is a growing need for education in energy efficiency and conservation”, he said.
In concluding his remarks, Asbill reminded members to visit the CTEC website at www.ctec.coop. He said important information on the site is provided for: bill pay methods; operations project updates; the latest high speed satellite internet service, links to Texas Co-op Power magazine, and videos showing energy saving tips. He said the co-op has recently added Facebook to give members timely information that benefits the membership, and he emphasized that member input is always welcome.
Stanley Keese, Board Treasurer from Llano County, and Chairman of the Finance Committee, gave a brief summary of his committee, which is charged with the financial integrity of the Co-op and to ensure that the board balances the expectation of reliability with the cost of maintaining and improving the system.
Keese reported that the largest asset of the co-op is its distribution and transmission system, valued at 134 million dollars, or 90% of total assets. “This investment represents upwards of 6000 miles of power lines located in 11 counties” he said.
CTEC maintains 4,600 square miles and this requires a group of dedicated professionals and office and warehouse facilities in 4 towns.
Equity, or what members OWN, represents 38%, or $56 million. CTEC tries to maintain this equity position to be able to borrow capital needed to build and improve the system. Keese continued by explaining that more than half of each revenue dollar collected, goes to pay for power that CTEC buys, and that 21 cents of each dollar goes toward operations and maintenance costs. The remaining percentages go toward depreciation, interest, and margins, which become patronage capital. Keese said that in the course of the co-op’s history, it has been able to refund a total of around 9 million dollars to its members. He concluded that with a high equity and good margins, “we believe the Co-op is in a strong financial condition”.
Riley Kothmann, Board Vice President from Mason County gave the members an Operations Report. He told members present, “The reliability of our system is strong as our average outage time has remained below industry average. During 2012, 22 miles of new line were built to 574 new members, while 50 miles of existing line were re-built with new conductor and poles. Approximately 246 miles of right-of-way were cleared and 1360 poles were replaced in maintenance projects”. He added that construction was completed for a new substation in Fredericksburg and a project was underway to re-energize a substation in the Eckert area along Hwy 16. Also, lines were improved and upgraded in the Comfort and Cherokee area. “As you can see, our crews and contractors were busy throughout the year”, he said.
W.C. “Dub” Stewart, Board Secretary from Llano County and Chairman of the Strategy and Policy Committee, gave his report next. He said, “Our number one strategic priority is the resolution of the LCRA situation. Beyond that, we have strategy goals that include communication, education, succession planning, facilities plan, safety, governance, rate review, technologies, and energy sourcing”.
Bill Weldon, Board Chair of the Energy Committee followed next. He told members his Board committee strives to study the competitive wholesale power market and how it may impact the Co-op’s ability to supply members with affordable and reliable power. Because of this increased responsibility, he said, “the Energy Committee spends time each month reviewing energy industry trends and ensuring that your Board is kept up-to-date on all market forces, including state and local politics, regulatory initiatives, developments in the global market, new technologies, and even social policies”.
The report concluded with Bob Loth, Chief Executive Officer of CTEC giving members a brief update on facts about the LCRA situation. Loth said that since CTEC is currently still in litigation, detailed comments about the case are prohibited. He cited several discriminatory practices on the part of LCRA which led to CTEC sending LCRA a notice of breach of contract, followed by notice of termination. These unfair practices resulted in rates and charges that discriminate between the 2041 Extending Customers and the 2016 Non-Extending customers. He added, “At each step of the way, our efforts to get LCRA to satisfactorily address our concerns were met with resistance or no response”.
Board Chairman Kaspar concluded the video report by saying, “I hope you have concluded that your Board is working hard for you. Above all else, we are member focused. We have a dedicated professional staff of employees for which I am thankful. Our employees and our Board recognize that we exist only to serve our members and meet your needs for safe, reliable, and affordable power”.
Following the video report, CEO Loth gave special recognition to several employees with extended tenure at the cooperative.
Afterward, Loth and Kaspar offered a brief question-and-answer session for members, giving them an opportunity to voice their questions and comments.
Loth then asked attending State Representative Doug Miller to the stage. Mr. Miller addressed the members, giving them an update on this year’s legislative session, and he thanked CTEC employees for “taking care of the hill country”.
The meeting ended with a drawing for over $3000 worth of door prizes that were all donated by the co-op’s generous suppliers.