81st Annual Meeting of Members Report
SouthEastern Illinois Electric Cooperative held its’ 81st Annual Meeting on Tuesday, August 6, 2019 with approximately 887 members registered and approximately 1,100 in total attendance. For those of you who were unable to attend your Cooperative’s annual meeting, this article will summarize the report members received at the annual meeting.
The Cooperative sold approximately 963.8 million kwh in 2018 resulting in a decrease of 1.9% from 2017. This decrease in kilowatt hours sold was primarily due to a decrease in large industrial load.
Your Cooperative ended the year 2018 in sound financial condition. As a not-for-profit organization, your Cooperative does not strive to produce profits for shareholders and investors but must maintain a sound financial position for the membership. In 2018, your Cooperative’s Board of Trustees approved the retirement and return of $1.37 million of Capital Credits and the capital credit checks were mailed to members in December of 2018. This means that over the past eight years, your Cooperative has retired and returned over $15.0 million of Capital Credits to the members.
Cooperative members learned that over the past decade, the United States discovered new sources of shale oil and natural gas and developed technological advances in oil and natural gas drilling techniques that we know today as hydraulic fracturing and horizontal drilling. These developments have led to more economical extraction methods and created an abundance of supply in these resources. In 2009, the United States became the world’s largest producer of natural gas and in 2018, the United States became the world’s largest producer of oil. Natural gas has become a low-cost fuel for electricity generation and for the past three years, natural gas has surpassed coal as the leading fuel source for electricity generation. Just one decade ago, coal was the fuel source for 48% (almost ½) of our nation’s energy. Next year it is projected that coal will provide 23% of our nation’s electric generation while natural gas will provide 37%.
For the first time since the 1950’s the United States is projected to become a net exporter of energy in the coming year. As the United States becomes the world’s largest producer of oil and natural gas and the world’s second largest coal producer, there is a significant and transformational shift in social and public policy to move the United States electricity generation industry away from these carbon-based fuels to renewable energy. The public policies that are moving the industry in this direction include federal and state tax incentives, credits, subsidies and government mandates. Federal and state tax credits and incentives have been the driving force for the deployment of more renewable energy development. Another driving force is government mandates, more specifically known as renewable portfolio standards, which require utilities to have a certain percentage of their generation from renewable sources. There are currently 29 states that have renewable energy portfolio standards. There’s no question that change is coming in the generation of electricity and the movement to transform the energy industry in the United States is developing at a very rapid pace.
In addition, there were several major energy legislation proposals introduced during the 2019 Spring Congressional Session. The general theme of the recent energy proposals in Illinois is to decrease or close carbon related generation facilities, including coal and natural gas baseload generation facilities, and rely on nuclear, solar and wind. Some of the legislation proposals call for higher renewable portfolio mandates and others call for even more aggressive action with carbon-based generation facilities.
While there was no substantive action on these proposals during the Spring Session, it is likely that there will be further discussions in the Fall Session and it is likely that we will see another major energy legislation acted upon in the coming year.
In summary, the electric utility industry experienced a significant shift over the past decade with greater production of oil and natural gas which resulted in natural gas becoming the leading generation resource in the United States. However, over the past few years, we have experienced an even greater transformational shift in the generation of electricity. Social and public policy are driving and funding more renewable energy development in the generation industry.
Lastly, the members were informed that your Cooperative will not implement a rate increase for the rest of 2019 and currently, does not anticipate the need for a rate increase in the year 2020.
Your Cooperative was formed 81 years ago to bring electricity to rural areas of southeastern Illinois. The founders of the electric cooperative program developed a unique business structure that by its very nature, makes electric cooperatives very accountable to the members it serves. Your Cooperative is governed by local people that live and work in your very own communities. Your Cooperative is also managed and operated by a group of local employees that also live and work in your very own communities. Your Cooperative is owned by the people it serves and will continue to be an electric cooperative that is truly operated “for the people and by the people.”
See you next month and as always, “We’ll keep the lights on for you.”