KENTUCKYSTRONG

2016-17 Annual Report

LETTER FROM president/CEO chris perry

Strength in numbers.As you page through this annual report of the Kentucky Association of Electric Cooperatives, you’ll notice quite a few numbers. In hours, dollars, miles, people and various other statistics, we take measure of the past year and chart a course for the shared future of Kentucky’s electric cooperatives.

That sharing, the cooperative difference, is what makes us strong. Kentucky Strong.

Since first being honored with your trust as KAEC President three years ago, my vision has been to lead an organization that supports each of our 26 member electric coopera-tives by leveraging our collective efforts. KAEC leads and develops materials and strategies for board and employee

training, statewide communications, safety training, legislative advocacy, and product distribution through United Utility Supply.

I am pleased to report that the finan-cial condition of KAEC is stronger than it has been in years. We have embraced the transformation of our business model, and continue to improve our operations as a trans-former distributor rather than a manufacturer.

At the end of 2017, KAEC will mark another milestone with our move to a new headquarters in the Hurst-bourne Green Office Park in eastern Jefferson County. The Bishop Lane headquarters served us very well in the previous chapters of KAEC history, yet the new headquarters on

Lyndon Farm Court reflects a strategic right-sizing which I believe strongly positions KAEC to effectively and effi-ciently carry out our mission.

At KAEC, we know that Our Power is Our People. Our talented and motivated workforce understands the cooperative model and engagement with our member cooperatives. Our board of directors is committed to good governance, and I am committed to providing the board accurate and transparent information.

Our industry is changing, and we need to be in a strong position to be able to navigate the road ahead. I am proud to report that our messaging is strong, our stand-ing in Frankfort and Washington is strong, and the com-mon purpose of our membership, one of the great stories in Kentucky history, is strong. Kentucky Strong.

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United Utility Supply Serves 220 co-ops in 17 states

Capital Credits$1.4 million returned to both KAEC and United Utility Supply member-ownersUnited Utility Supply sold over 30,000 transformers in 2016, which resulted in the capital credits achieved through ERMCO, which will be re-distributed to the member cooperatives.

over 600,000 milesUUS logged over 600,000 miles in delivering quality products to its member cooperatives for 2016.

more effective and efficientSubstantial investments were made in upgrading our computer programs to enhance the ability to serve our members more effectively and efficiently.

top 100United Utility Supply Cooperative was ranked in the top 100 Electrical Distributors throughout the nation in 2016 as reported by Electrical Wholesaling magazine.

$90 million in sales in 2017

Top100

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Rural Cooperatives Credit Union (RCCU)

MEMBER OWNEDSince 1964, RCCU has served as a not-for-profit, member-owned financial cooperative for the benefit of electric cooperative employees and their family members.

RCCU serves over 4,700 members with competitive savings and loan solutions.

LOCATIONSRCCU has its main office in Louisville, KY in the KAEC headquarters, and operates a branch office located at the TVA Paradise Plant in Drakesboro, KY.

OUR MISSIONThe mission of RCCU is to promote thrift and provide the best possible financial services to its members and to maintain long-term financial stability.

Throughout this past year we have:• Opened 304 new membership accounts• Advanced 2,372 loan advances for members• Advanced 180 Visa Accounts for members• Serviced 1,913 Checking Accounts• Serviced 1,497 Mastercard Debit Cards• Serviced 2,654 Visa Cards

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Human Resources

SAVED 100 WORKING HOURS4Q 2016 & 1Q 2017 – change of processes from manual to elec-tronic, saving approximately 100 working hours

saved $10,000Reinvented the expense reporting policy and saved the organization $10,000 annually

payroll Transitioned payroll to a new system

HR Association meeting29 participants from 16 cooperatives attended the HR conference, sharing best prac-tices and learning about affordable resources, recruiting trends, affirmative action, legislative updates, emotional intelligence and generation-al issues in the workplace.

$100,000SAVED by changing insurance

structure in 2016

In December 2017, KAEC headquarters moves to Lyndon Farm Ct. in Louisville

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Safety and Loss Prevention

LinemAn’s Rodeo 28 teams 32 individuals

28 apprentice 6 seniors

143 k150+MUTUAL AID

co-op linemen responded to Hurricane Matthew

co-op linemen responded to Hurricane Irma

Safety Trailer Demos In 2016 we gave safety trailer demos in over

51 locations throughout KY touching over

10,000 people

meetingsAttend and host NRECA meetingsQuad State Safety Conferences National Utility Safety Education and Training AssociationSAIA Safety Conference

We organize and attend Emergency Work Plan for Mutual Aid meetings. Kentucky is a big supplier and or-ganizer in or during catastrophic weather occurrences.

Rural Electric Safety Achievement ProgramThrough NRECA we have 22 out of 26 participating cooperatives in Kentucky 300 Total Co-op Safety visits from the 4 of us for the

year not counting random visits and workshops.

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kaec communications/kentucky living

Regulatory Review KAEC Communications monitored developments related to co-op regulations, sharing observations on trends and best practices.

Telling the Kentucky co-op story KAEC Communications leveraged the collective reach of local co-ops to highlight the mutual aid efforts in the aftermath of Hurricane Irma. KAEC secured news coverage on television, radio and newspapers in Kentucky’s major media markets, and local cover-age in co-op territory.

100 co-op leaders trained in crisis communications

Launch of media training with regional workshops planned across Kentucky.

local Annual meetings support

21,800 Buckets

66,528 Light bulbs

8,500 miles on the KAEC pick-up truck

3,000+ Dum-Dum suckers

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Awards and recognitionKentucky Living recognized with a number of national awards, including:

Best Magazine Design Statewide Editors Association

Best Illustration Statewide Editors Association

Best Informative/Investigative Feature Cooperative Communicators Association

Best Entertaining Feature Cooperative Communicators Association

KentuckyLiving.comfrom 2016 to 2017:

Page views up 87%Sessions up 69%1000+ recipes

120 WINNERS

1,164 Local Section Pages

712 Magazine Pages

5,861,244 Total Magazines Printed 2017 Best in KentuckyReaders’ Vote

APRIL 2017 • KENTUCKYLIVING.COM

NOLIN RURAL ELECTRIC COOPERATIVE’S

CELEBRATING THE ENERGY OF YOUR COMMUNITY

SEPTEMBER 2017 • KENTUCKYLIVING.COM

2017 WINNERS BEST IN KENTUCKY

IN SEASONFall hunting guide

TO THE RESCUEFirst responders save lives

CO-OP WEEKD.C. YOUTH TOUR

APRIL 2017 • KENTUCKYLIVING.COM

WIN a Weekend Trip!

Museum Mysteries

Family Adventures

Where Legends Lived

Bourbon Country 2017 TRAVEL GUIDE

CELEBRATING THE ENERGY OF YOUR COMMUNITY

APRIL 2017 • KENTUCKYLIVING.COM

KENTUCKY2017

5,000+ additional Facebook followers since 2016

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YOUTH TOUR

smart phone app created for Youth Tour connected stu-dents like never before

83traveled by bus to the nation’s capital to gain a personal understanding of American history and their role as citizens and members of electric cooperatives. Meeting with members of Congress and fellow co-op members from across the country, Kentucky’s delegation described it as “the trip of a lifetime.”

Washington Youth Tour students

Youth Tour Recruitment Video available to promote 2018 trip

testimonials“A true life-changing experience.” -Payton Squires, Tri-County RECC

“Thank you for finding it important to invest in the lives of young people.” -Brooke Begley, South Kentucky RECC

“Hands down one of the best experiences of my life.” -Olivia Staverman, Owen Electric

“Made me feel like I was in the heartbeat of this great nation.” -Rebekah O’Bryan, Kenergy

150toured Kentucky’s Capitol, meeting state lawmakers, learning Kentucky history and receiving scholarship information.

Frankfort Youth Tour students

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GOVERNMENT AFFAIRS

28 KAEC Government Affairs team works to engage and educate new members about electric cooperatives.

new members of the General Assembly

Speaking upKAEC coordinated visits by Kentucky electric cooperative leaders to both the state Capitol and the nation’s Capitol to engage elected leaders and inform them of co-op concerns.

Engagement with elected leaders included exclusive inter-view with Governor Matt Bevin explaining his plan to reform Kentucky’s pension systems.

Washington, D.C. Continued to cultivate our strong relation-ship with Kentucky’s congressional delega-

tion. During our legislative rally, a Kentucky co-op

team met with new EPA administrator Scott Pruitt to high-light the effects of

overly burdensome regulations.

Frankfort Successfully prevented any legis-lation harmful to our cooperative program.

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Education and Training

CybersecurityKAEC Information Technology working with local co-ops and the FBI’s Infraguard pro-gram to better protect against and prepare for cyber events.

90Events planned by KAEC

4,000+ attendees at events planned by KAEC 1,350 Gallons

of Coffee Served

PLANNING COMMITTEE works with 9 statewide associations and has 8 board committees.

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2017 KAEC BOARD of directors

cooperative Manager Board RepBig Rivers EC Bob Berry Wayne Elliott

Big Sandy RECC Bobby Sexton William Maxey

Blue Grass Energy Mike Williams Paul Tucker

Clark Energy Chris Brewer O.H. Caudill Jr.

Cumberland Valley Ted Hampton Vernon Shelley

East Ky Power Tony Campbell Alan Ahrman

Farmers RECC Bill Prather Freddie Button

Fleming-Mason Energy Joni Hazelrigg John Roe

Grayson RECC Carol Hall Fraley Jimmy Whitt

Gibson EMC Dan Rodamaker David Kimbell

Inter-County Energy Jim Jacobus Jason Todd

Jackson Energy Carol Wright Phil Thompson

Jackson Purchase Energy Dennis Cannon William Birney

Kenergy Corp Jeff Hohn Chris Mitchell

Licking Valley Kerry Howard Tommy Hill

Meade County Marty Littrel Darla Sipes

Nolin RECC Mickey Miller Linda Grimes

Owen EC Mark Stallons Robert True

Pennyrile RECC Greg Grissom James Futrell

Salt River Electric Tim Sharp Linda West

Shelby Energy Debbie Martin Pat Hargadon

South Kentucky Dennis Holt Rick Halloran

Taylor County Barry Myers Christopher Tucker

Tri-County EMC Paul Thompson Veachel Harlan

Warren RECC Scott Ramsey Michael McGuirk

West Kentucky RECC David Smart Troy English

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