2010 Annual Report Annual Meeting Program
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1 2010 Annual Report Annual Meeting Program Thursday, June 10, 2010 Paxton-Buckley-Loda HS/JH
2 Pictures from the 2009 Annual Meeting. Mission Statement Eastern Illini Electric Cooperative s mission is to provide premium quality, economically priced electricity and other related services to our members and communities. 2 Eastern Illini Electric Cooperative Annual Report Annual Meeting Program
3 3 p.m. - 7 p.m. Meeting Registration - $25 bill credit, register for a children s bicycle Activities & Events: Inflatable bounce house Inflatable obstacle course Oscar the Talking Robot Bucket truck rides Basketball contests Gene Trimble Band Energy Wise exhibits Q & A booth 4 p.m. - 7 p.m. Dinner served (catered by Niemerg s Catering) 4 p.m. Energy Wise Seminars - Session #1 Improving Home Performance Brian Kumer, Thermal Imaging Services Reducing the Cost of Grain Conditioning Daniel Kallistad, Sentry Total Grain Management Renewable Energy Options Dr. David Loomis, Illinois State University 5 p.m. Energy Wise Seminars - Session #2 Now is the Time to Invest in Geothermal Richard Hiles, ClimateMaster Properly Insulating Your Home Bruce Schellinger, P2000 Insulation Renewable Energy Options Dr. David Loomis, Illinois State University 6 p.m. Energy Wise Seminars - Session #3 Improving Home Performance Brian Kumer, Thermal Imaging Services Reducing the Cost of Grain Conditioning Daniel Kallistad, Sentry Total Grain Management Properly Insulating Your Home Bruce Schellinger, P2000 Insulation 7 p.m. Business Meeting: Call to Order Invocation Pledge of Allegiance National Anthem Notice and Proof of Mailing Secretary s Report Treasurer s Report Executive Report Director Election Questions from floor Unfinished Business New Business 7:30 p.m. Adjournment Prize drawing for children s bicycles 3
4 Welcome to your annual meeting! We are excited you have chosen to spend the afternoon with us. Enjoy the festivities, and don t forget to register for your $25 bill credit! Financial Goals We met most of our financial goals in 2009! Even though revenues and margins were well below budget most of the year because of the unusual weather we experienced, the huge grain drying load that occurred in the last two months of the year caused our financial statements to rebound to much more acceptable levels. The year-end margins were less than budgeted, but our controllable expenses were within the budget and our lending institution required targets were achieved. Together We Save We are happy to announce the Together We Save initiative, designed to show you simple ways you can save energy dollars. Visit the Together We Save booth during the annual meeting, or visit for more information. Our Energy, Our Future and Carbon Legislation You have probably heard about climate change and carbon emissions. Our President, Congress and the Environmental Protection Agency are all looking at ways to decrease carbon output in our country. Some buzz words currently in the news are cap and trade and a carbon tax. We are continuing to follow this national discussion, which was placed on the back burner while the health care reform took center stage. We get most of our electricity from coal-fired plants, so potential legislation could have a huge impact on how much we are paying for electricity. You can get involved to make sure your voice is heard by visiting a special website designed to help you communicate with your elected officials. Visit to start the dialogue. You will also be able to join this very valuable grassroots campaign during the annual meeting on June 10. is scheduled to be completed during the last quarter of next year, and the second unit should be ready 11 months after that. The plant will utilize Illinois coal from a new mine that is adjacent to the power plant. This huge project will create jobs in Illinois for years to come. Our current wholesale power contract will get us through 2012, when we should be receiving power from the Prairie State facility. We have also secured peaking power for future years. We are continuing to look at ways to diversify our future power portfolio to protect against potential cost increases. Serious exploration of affordable, alternative energy sources is also in progress. Online Presence Our recently redesigned website, focuses on providing a wealth of information in a user-friendly layout. You can view and pay your bill online, track your kwh use, discover ways to lower your utility bills, learn about our programs and services, and even do a simple heating cost comparison. We are now using Twitter (EasternIllini) to quickly post outage and other pertinent information, and all facebook users should become a fan of Eastern Illini s facebook page, where you can keep up with our latest activities and events. Impact of 2009 Rate Increase.Less Than Expected The rate increase that took affect at the beginning of 2009 went as smoothly as possible. Many of you experienced increases that were less than anticipated because of the timing of when your energy was used, and also because wholesale market prices have been a bit lower. Thank you for attending the 2010 EIEC Annual Meeting! Harold Loy, Chairman Power Supply The construction of the Prairie State Generating facility in Lively Grove, Illinois, is continuing nicely. The first unit of the plant 4 Eastern Illini Electric Cooperative Annual Report Annual Meeting Program Dave Champion, President/CEO
5 Minutes of the Special Meeting of Members January 23, 2010 A Special Meeting of Members of Eastern Illini Electric Cooperative, Inc. was held at Paxton-Buckley-Loda High School/Junior High School, at 700 W. Orleans, Paxton, Illinois on Saturday, January 23, 2010, at 10:30 a.m. The meeting was called to order by Chairman of the Board Harold Loy who presided and acted as Chairman. Thomas Schlatter, Secretary of the Board, acted as Secretary of the meeting and kept the minutes thereof. Invocation and Pledge of Allegiance Vice Chairman Marion Chesnut delivered the invocation. It was followed by the recitation of the Pledge of Allegiance. Reading of Notice of Meeting and Proof of Mailing Chairman Harold Loy informed the members that Board Secretary Thomas Schlatter has certified through the affidavit of mailing that notice of the Special Meeting of the Members was properly mailed through the United States Postal Service on December 28, 2009, in compliance with the bylaw requirements. Discussion of the Proposed Bylaw Amendment, Questions and Voting Chairman Loy stated that the January Center Section of the Illinois Country Living Magazine contained an insert, which presented the details of the proposed bylaw amendment. The blue ballot in the credentials packet recited the language of the bylaw change being proposed by the Board of Directors. In summary, the Board of Directors believes that it is in the best interests of the members of the Cooperative that the Board size be reduced from eleven (11) Directors to nine (9) Directors. The Cooperative will continue to have nine (9) districts, but at-large Directors are proposed to be eliminated according to the suggested bylaw change. The downsizing will occur through attrition as of the 2010 Annual Meeting. The Board of Directors recommends this action and believes that all the members will be adequately served since the same number of districts will remain in existence. The bylaw amendment will authorize that change. A yes vote on the blue ballot means approval of the bylaw amendment, while a no vote means non-approval of the bylaw amendment. Chairman Loy then solicited questions before the final voting. Chairman Loy noted that many members voted in accordance with the early registration opportunities from 8 a.m. this morning, as voting locations were arranged, not only at the Paxton-Buckley-Loda High School/Junior High School, but also at Eastern Illini Electric Cooperative s Gilman and Pesotum warehouses for the convenience of members. The ballot boxes were then circulated to pick up any remaining ballots. Quorum Determined Based upon the registrations at the three (3) locations, it was determined that there was a sufficient number of members who attended the meeting in Paxton, or attended to vote at the other locations in excess of the number required by the bylaws. Appointment of Tellers and Counting of Ballots Chairman Loy then entertained a motion to appoint Cooperative members, personnel and the Cooperative Attorney as tellers to count the ballots. A motion was then made by Kay Horsch to appoint Robert Bauer and Corinne Brown and Attorney Guy Hall as tellers in Paxton, Illinois; members Naomi Ahlden and Doug Vaughn, and Manager of Marketing and Economic Development Bob Dickey in Gilman; and members Laverl Byers and Susan Harbaugh and Senior Vice President Brandon Jackson in Pesotum, to count the ballots, and then adjourn the meeting thereafter once the counting and the results are known. The motion was seconded by Steve Meenen. Chairman Loy informed the membership that it has been moved and seconded, that the tellers be appointed and that the meeting should be adjourned after the count of the ballots regarding the bylaw amendment. The question was then called for approval and the motion was approved with the individuals appointed to undertake the counting of the ballots to determine the results of the proposed amendment. Chairman Loy indicated that the results would be announced and further published and posted on the Cooperative s website as promptly as possible thereafter. Results of Bylaw Amendment Vote The votes regarding the bylaw amendment were counted with a final vote of 222 in favor of the amendment and 4 opposed to the amendment. The final vote was certified by the tellers. Chairman Loy then announced that the bylaw amendment was approved by the members and passed and that the meeting was thus concluded. Adjournment Chairman Loy then declared the meeting adjourned at 11 a.m. 5
6 District 2 Thomas Schlatter, Chatsworth District 1 Harold Loy, Beaverville District 4 Bruce Ristow, Cissna Park District 3 Steve Meenen, Melvin District 5 Marion Chesnut, Rossville District 7 Kay Horsch, Dewey District 6 Brad Ludwig, Fithian District 8 Herb Aden, Newman District 9 Jay Hageman, Fairmount 6 Eastern Illini Electric Cooperative Annual Report Annual Meeting Program
7 Directorate District 1 Candidate Harold Loy Harold M. Loy has served on the Eastern Illini Electric Cooperative Board since Loy received the National Rural Electric Cooperative Association (NRECA) Professional Directors Certificate in 1998 and became an NRECA Credentialed Cooperative Director in He received the NRECA Board Leadership Certificate in Loy currently holds the position of Chairman of the Board, and serves as the alternate director on the Prairie Power, Inc. Cooperative Board. Sample Ballot EASTERN ILLINI ELECTRIC COOPERATIVE June 10, 2010 Paxton, IL For Director from Directorate District 1 (3-year term) For Director from Directorate District 7 (3-year term) (vote for one) Harold Loy Beaverville (vote for one) Kay Horsch Dewey After reviewing the bylaws, petitions, affidavits, and qualifications of the potential candidates, the Eastern Illini Electric Cooperative 2010 Credentials Committee has determined that the above candidates are eligible to serve as directors of Eastern Illini Electric Cooperative. Directorate District 7 Candidate Kay Horsch Kay Horsch was elected as a director to the board of Eastern Illini Electric Cooperative in March Horsch received the National Rural Electric Cooperative Association (NRECA) Credentialed Cooperative Director Certificate in 2001, and she received the NRECA Board Leadership Certificate in Retired Board Members Everyone at Eastern Illini Electric Cooperative would like to acknowledge and thank the following board members for their service and dedication to the member/owners and employees of Eastern Illini. We wish them well in their retirement! Don Reitz, Gilman EIEC and EIPC Board Member from Charles Dean Day, Bement EIEC and IEC Board Member from Credentials Committee Eastern Illini s Credentials Committee is tasked with verifying the qualifications of potential board members. The 2010 committee is comprised of: Wayne Apperson of Foosland; Scott Zumwalt of Sheldon; David Munson of Donovan; Laverl Byers of Tuscola; and Frank Beck of Allerton. 7
8 Minutes of Twenty-Second Annual Meeting of Members June 11, 2009 The Twenty-Second Annual Meeting of Members of Eastern Illini Electric Cooperative, Inc. was held at the headquarters of the Cooperative, 330 West Ottawa Street, Paxton, Illinois on Thursday, June 11, 2009, at 7 p.m. The meeting was called to order by Chairman of the Board Harold M. Loy, who presided and acted as Chairman. Secretary of the Board Kay Horsch acted as Secretary of the meeting and kept the minutes thereof. Call to Order The Chairman announced that the registration staff had informed him that there were 884 members present in person or by proxy, and that the attendance being in excess of 100 members, as required by the bylaws to constitute a quorum, the Chairman announced that a quorum was in attendance and he declared the meeting duly constituted to transact business. Presentation of Colors The presentation of colors was conducted by Pack 32 of the Boy Scouts of America, Paxton, Illinois, followed by the recitation by the membership of the Pledge of Allegiance led by Eagle Scout Joel Hood. The National Anthem was then performed by the Gene Trimble Band. Invocation Director Bruce Ristow delivered the invocation. Introduction of Guests Special guests of the Cooperative who attended the meeting were introduced, including Jay Bartlett and John Dalton of Prairie Power, Inc., Norman Conrad and Jim Nevel of the Association of Illinois Electric Cooperatives, as well as former Cooperative Directors Glenn Anderson and Robert Bauer. Reading of Notice of Meeting and Proof of Mailing Chairman Harold M. Loy read the official Notice of the meeting and the Affidavit of Mailing of said Notice. The Chairman directed the Secretary to annex to the minutes of this meeting a copy of the Notice together with the Affidavit of Mailing. Approval of Minutes The minutes of the Twenty-First Annual Meeting of Members held June 12, 2008, as printed in the annual report distributed to all members, were presented for consideration. Member Bill Wirth made a motion that the rules be suspended, that the reading of the minutes of the Annual Meeting held June 12, 2008, be waived, and that the minutes be approved as presented in the official Annual Report of this meeting. His motion was seconded by Member Harold Sands and unanimously carried. Report of Treasurer Chairman Harold M. Loy informed the membership that since the Treasurer s Report was contained in the official Annual Report, and there would be no oral report describing the amounts set forth therein. However, questions about the report could be asked. The Treasurer s Report included operating statistics, the balance sheet for the years ending December 31, 2007, and December 31, 2008, respectively, consolidated statements of revenues and expenses of the Cooperative and its subsidiaries for those two (2) years, as well as other information. The balance sheet reflected the following information: Net Utility Plant $50,325,646 Total Assets $69,280,324 Long Term Debt $38,071,614 Total Members Equity and Liabilities $69,280,324 Thereafter, the financial reporting period was concluded and Chairman Loy entertained a motion to accept the Treasurer s Report. A motion to accept the Treasurer s Report was made by Member Bob Lindgren. The motion was seconded by Member Bob Apperson and was unanimously carried. Executive Report Chairman Loy and President/CEO Champion reported that the condition of the Cooperative for the prior year was noted in a written Chairman/President s Report included as part of the official Annual Report of the Meeting. It covered topics, including financial goals, proposed carbon legislation, power supply, ice storm outages, rate increase, and new website design. Report of Credentials Committee The written report of the Credentials Committee was noted as it was presented in the official Annual Report advising the membership that the Committee had reviewed the qualifications 8 Eastern Illini Electric Cooperative Annual Report Annual Meeting Program
9 of the nominees and determined their eligibility. The committee s written report was as follows: The Credentials Committee met at the office of Eastern Illini Electric Cooperative in Paxton on April 29, 2009, to determine the eligibility of candidates who filed nominating petitions for the June 11, 2009, director election. Directors will be elected in Directorate Districts 5, 7 and 9 and Northern at Large. Attending the meeting were Richard Davis of Longview, David Heckerson of Potomac, David Pree of Gilman, Ted Vinson of Fithian, and John Wilkening of Cissna Park. In accordance with the Cooperative s bylaws, members of the Credentials Committee are appointed by the Board of Directors to serve a 1-year term. Richard Davis was selected as the Chairman of the Committee. Chairman Davis noted that nominating petitions were available at Eastern Illini Electric Cooperative s headquarters in Paxton at 8 a.m. on Friday, March 13, 2009, and that the deadline for filing was 5 p.m. on Monday April 27, The committee reviewed the qualifications of Bruce Ristow of Cissna Park, District 5; Bradley J. Ludwig of Fithian, District 7; Herbert L. Aden of Newman, District 9; and Steve Meenen of Melvin, Northern at Large who had filed nominating petitions. No other candidates picked up or filed petitions. After reviewing the petitions, affidavits and qualifications of Bruce Ristow, Bradley J. Ludwig, Herbert L. Aden and Steve Meenen, the Credentials Committee determined that all of the candidates were eligible to serve as directors of the Cooperative. Election of Directors Chairman Loy announced that the next item of business would be the election of Directors and called upon Attorney Guy Hall to conduct that election. Mr. Hall again announced that all the candidates were shown on the program and thanked all those who participated and voted. He noted that since there were no nominees other than those reviewed and approved by the Credentials Committee, the membership could waive the written ballot and elect the nominees who had filed petitions pursuant to Section 2.5 of the bylaws of the Cooperative. Mr. Hall then entertained a motion to waive the written ballot and elect the nominees approved by the Credentials Committee. Thereafter, there was motion by Member Norman Siems, which was duly seconded by Member Wayne Apperson to waive the written ballot and elect the nominees, Bruce Ristow, Bradley J. Ludwig, Herbert L. Aden and Steve Meenen. The motion was carried by a voice vote, and the nominees were duly elected by unanimous vote of the membership. Questions from the Floor Chairman Loy and President/CEO Champion entertained questions from the floor regarding the operations of the Cooperative. There were no questions. The Chairman then asked Association of Illinois Electric Cooperatives legal counsel Norman Conrad to speak to the group regarding proposed carbon legislation and the Our Energy, Our Future Program. Mr. Conrad explained how the proposed bill, designated as United States House of Representatives Bill 2454 and named the Clean Energy and Security Act, would potentially affect electric cooperatives. He described the allocation of carbon emission allowances and the credit and taxation methodology. He estimated that with added costs in 2011, the Cooperative would have to spend in excess of an additional $1,000,000 to continue the purchase of electricity. He noted that with each successive year after 2011 the amount of free carbon allowances would decrease, thus increasing the cost of purchasing the right to emit carbon. He asked members to forward position statement cards to their Senators and Representatives asking them to consider the financial affordability of such a program. Mr. Conrad also described the tax credit for renewable energy programs. Unfinished Business Chairman Loy called for any additional and unfinished business to be presented. None was presented. New Business Chairman Loy called for any new business to be presented. There was no new business presented. Adjournment There being no further business to come before the meeting, upon a motion duly made by Member Hardin James, which was seconded by Member Alan Good and unanimously approved, the meeting was adjourned. Drawing for Prizes The prize drawing was conducted following the adjournment. 9
10 Revenue and Expense Statement Total operating revenue $29,072,634 $25,434,884 Operating Expenses Cost of power $16,820,551 $12,702,743 Operations and maintenance expenses 2,885,075 3,495,686 Consumer accounts expense 594, ,998 Customer service and information expense 746, ,529 Administrative and general expense 1,916,082 1,879,763 Depreciation 2,465,542 2,390,404 Interest expense 2,221,550 2,268,335 Other deductions 35,336 23,708 Total Operating Expense $27,685,416 $24,090,166 Operating margins $1,387,218 $1,344,718 Non-operating margins 1,013,930 1,041,635 Income or (loss) from equity investments (163,919) (679,987) Net Margins for the Year $2,237,229 $1,706,366 Operating Statistics Total kwh purchased 254,895, ,975,517 Total kwh sold 234,619, ,984,966 Average number of members served 13,731 13,742 Average kwh use per month, per member 1,424 1,407 Average revenue per kwh sold to members $0.124 $0.109 Average cost per kwh purchased $0.066 $0.050 Where Your Electric Dollar Went in 2009 Depreciation/ Other, 8.60% Interest, 7.64% Power Cost, 57.86% Operations, 21.13% Margins, 4.77% 10 Eastern Illini Electric Cooperative Annual Report Annual Meeting Program
11 The following financial information represents Eastern Illini s operations for the fiscal years ended December 31, 2009 and These reports were taken directly from the cooperative s books and records which have been audited by the firm of Olsen Thielen & Co., LTD. The American Institute of Certified Public Accountants sets the standards of the audit. Balance Sheet Assets Cost of electric plant $81,311,808 $78,959,711 Less: accumulated depreciation 29,900,567 28,634,065 Net Utility Plant $51,411,241 $50,325,646 Cash - general 106, ,610 Investments 13,830,961 13,618,382 Accounts receivables, net 3,609,611 2,415,091 Materials and supplies 569, ,413 Prepaid and other current assets 1,671,136 1,344,898 Total Assets $71,199,074 $68,702,040 Members Equity and Liabilities Membership fees & other capital $615,106 $551,978 Patronage capital 26,009,274 25,259,215 Operating margins 1,387,218 1,344,718 Non-operating margins (3,762,358) (5,124,231) Long-term debt to CFC 37,807,364 38,071,613 Accounts payables 2,262,991 1,763,669 Accrued expenses 853,491 1,175,391 Notes payable - line of credit 2,070,634 1,845,961 Consumers deposits & prepayments 532, ,590 Other non-current liabilites 3,422,434 3,327,136 Total Members Equity & Liabilities $71,199,074 $68,702,040 Eastern Illini Services Corporation Operating revenues $2,313,880 $2,398,826 Operating expenses 2,200,142 2,263,719 Net Operating Income $113,738 $135,107 Income or (loss) from equity investments $(294,249) $(832,166) Other 16,592 17,072 Net Income (Loss) $(163,919) $(679,987) 11
12 330 West Ottawa Paxton, IL
Celebrating 75 years of service to our member/owners, and 25 years of service as Eastern Illini Electric Cooperative.
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