2-3 2017 Executive report 5 Your co-op management staff 6&8 Consolidated financial statements 9 Your board of directors 10-11 Know the nominees information requests NORTHWESTERN REC Communications & Energy Solutions 22534 Highway 86, P.O. Box 207 Cambridge Springs, PA 16403 Phone: 800-352-0014 www.northwesternrec.coop Monday - Friday, 7 a.m. to 3:30 p.m. Managing Editor: Linda King (lking@northwesternrec.com) Editor & Graphic Designer: Amy W. Fuller (afuller@northwesternrec.com) This 2017 Annual Report was written, compiled and produced by the employees of Northwestern Rural Electric Cooperative Association, Inc. and its subsidiaries. annual meeting The 2018 Northwestern REC Annual Meeting of the Membership is scheduled for Saturday, Aug. 4, at the Crawford County Fairgrounds in Meadville, Pa. connect with us facebook.com/northwestern.rec twitter.com/nwreca youtube.com/c/northwestern- RECCambridgeSprings instagram.com/northwesternrec Cooper-Winters ELECTRICITY KEEPS us connected to our modern world. Consider all of the necessities and conveniences we enjoy in part because of the power lines running to the electric meter outside your home. Your cooperative is proud of our reliability improvement projects that keep your power on. For many years, our line improvement program has focused on rebuilding aging infrastructure. We have been replacing old copper wire that has become brittle with age with stronger aluminum-coated, steel-reinforced wire that can withstand the weather extremes we face in northwestern Pennsylvania. We are taking the opportunity to move out of problem rights-of-way by bringing the lines closer to the road to better serve you. We are also installing taller poles that enable the communication companies to extend services to you more economically. In 2017, we Grill found the weather conditions to be favorable, and we were able to rebuild 48 miles of line. We appreciate the patience and cooperation we have received from all members as we continue this line-rebuilding project. In 2018, we will be making improvements to two of our 17 substations. The electric load has grown at our Mill Village Substation. The transformer will be upgraded at Mill Village to provide the needed capacity. We are working on a rebuild and relocation of our Mount Hope Substation. This will enable us to install a larger transformer that will allow us to support our Cochranton and Tamarack substations as well. Technology and reliability go hand in hand, and we are a high-tech co-op! Since 2014, your co-op has installed state-of-the-art switches that automatically reroute power flow during outages so we can keep you from being in the
Make your voice count Take the pledge to vote this election year. Visit vote.coop to take the pledge. Co-ops across the nation are dedicated to making our voices heard at the polls. Collectively we can make a difference. dark. Members might see an annoying blink when we reroute power, but the good news is that the lights stay on! In 2017 alone, these smart switches saved an impressive 3.66 million outage minutes system-wide. Technology is great because it allows us to provide you with better service while saving you money. With only eight members per mile of line, compared to the nearby investor-owned utility (IOU), which has 34 customers per mile of line, our residential members enjoy electric rates that are about 18 percent lower than the local IOU. When it comes to value, your cooperative is the clear winner. And, we are always looking for ways to make your co-op even better. Technology allows us to offer more convenient ways to communicate with the membership and for the members to communicate with us. We are living in the future and many members prefer to connect with us over the internet. We promote SmartHub, your online portal to view and pay your bill, view your hourly use information, report outages, or contact your co-op. You can even customize how you would like us to contact you. If you prefer a text message or email, you can sign up for this service through our SmartHub, which is accessible on our webpage or by downloading the app for your smart device. Since the load management program s inception in the 1980s, our members continue to provide value to your cooperative by allowing us to control their electric water heater during peak energy consumption periods. This program shifts electric use outside peak rate times and helps reduce our overall demand. Co-op members help to control their monthly electric bills because this helps your cooperative reduce the amount of power that must be purchased when energy costs are most expensive. The end result is that all coop members have benefited from this program with over $25 million saved in avoided power costs. This summer, all residential members should have received four LED lightbulbs from your cooperative. LED lighting is one of today s most energy-efficient and rapidly developing lighting technologies. The bulbs last longer, are more durable, and offer comparable or better light quality than other types of lighting. These bulbs provide value in two ways. On average, the bulbs are 80 percent more efficient than traditional incandescent bulbs. You can expect to save as much as $6.22 per bulb per year, or $24.88 if you install and use all four LED bulbs. Your co-op will also save in avoided power costs, thereby providing double value to the membership. Lighting accounts for about 15 percent of a typical home s energy use. You will begin saving money from the moment you replace an old incandescent lightbulb. Finally, our capital credits program really sets us apart from other utilities. Your co-op has a proud history of returning patronage capital to our members. In 2017, we refunded over $388,000 to you, the members. This further demonstrates that our focus is not on Wall Street, but on Main Street. We will always be working to provide you with value, and service that is reliable and affordable. We are people you can count on. Cooperatively Yours, Kathryn J. Cooper-Winters Board Chair Mary A. Grill President & CEO
MARY A. GRILL President & CEO 1977, Grill has a bachelor s degree in business administration from Edinboro University. She serves on numerous statewide and national committees. Currently, she is an active member of the Meadville Garden Club, president of the United Way of Western Crawford County and serves on multiple local boards. Grill and her husband live in Meadville and have raised four children. Kathy Lane Vice president & CFO 2012, Lane has a bachelor s degree in business administration from Edinboro University and an MBA (finance) from Gannon University. She has over 14 years of work experience in the accounting field. Lane and her husband live in Cambridge Springs with their son. Clarissa schneider Executive secretary & human resources assistant 2014, Schneider has a bachelor s degree in communication arts from Gannon University. She is a past participant in the Crawford Area Young Chamber of Commerce and Business Professional Women s Club. She lives in Meadville with her boyfriend and their two cats. KEVIN HINDMAN Vice president of operations & engineering Employed with Northwestern REC since 1985, Hindman has a bachelor s degree in electrical engineering from Grove City College. He has more than 39 years of experience working with rural electric cooperatives. He and his wife reside in the Cambridge Springs area, have two grown daughters and three grandchildren. LINDA KING Vice president of communications & energy solutions 1988; King has an MBA and master s degree in marketing from Gannon University, as well as a bachelor s degree from Edinboro University. She currently serves on several national committees/work groups and is an active General McLane School District board member. She and her husband live in Edinboro with their three children. CONNIE SOVISKY Vice president of member services 1998, Sovisky has a bachelor s degree from Edinboro University and is a graduate of the supervisory skills program at the Manufacturers Association. She is an active board member for the Center for Family Services in Meadville. She and her husband live in Cambridge Springs and have two grown children. Kerri fleet Human resources manager 1993, Fleet is a graduate of Bradford Business School in Pittsburgh, as well as the Leadership Meadville program. She is a member of the Society for Human Resources Management, the Manufacturers Association Human Resources Roundtable and the local Human Resources Consortium. She and her husband live in Cambridge Springs with their two daughters. thomas dimperio Vice president of IT 2002, Dimperio has a bachelor s degree in computer science from Edinboro University. He has 25 years of experience working in education, manufacturing and utility environments. He and his wife live in Erie with their two sons.
Northwestern Rural Electric Cooperative Association, Inc. and Subsidiaries consolidated balance sheets December 31, 2017 and 2016 consolidated statement of Revenues & expenses Years ended December 31, 2017 and 2016
*In 2017, co-op smart switching technology was able to save 3.66 million outage minutes. That s equivalent to 6.96 years of avoided outage time!
Northwestern Rural Electric Cooperative Association, Inc. and Subsidiaries consolidated statement of Equities Years ended December 31, 2017 and 2016
Purchased Power covers the cost of the power your co-op purchases to deliver to your home. Operations & Maintenance Expense covers operational costs, like line work, repairs and maintenance. Consumer Expense covers the cost of handling members accounts, including taking bill payments, and answering calls. Sales Expense covers the cost for other member services, such as communications, energy marketing services and educational publications. Administrative & General Expenses covers administrative costs, including employee benefits, safety program and building maintenance. Depreciation Expense covers the cost of assets, such as wire, poles and transformers, that span over several years. Interest on Long-Term Debt covers interest payments on loans for the long-term borrowing to finance the assets of the co-op. Net Margins retained in the form of capital credits, which provides a source of equity for Northwestern REC. These margins are refunded to members through capital credit retirements.
District 1: Springfield, Conneaut, Girard, Elk Creek, Fairview, and Franklin townships, and Platea Borough in Erie County; and Monroe and Conneaut townships in Ashtabula County. Karl E. Ebert has work experience in both labor and management in several companies. He worked in a machine shop and was a steelworkers grievance man there while attending Mercyhurst College. He earned a Bachelor of Arts degree in accounting, Magna Cum Laude, in 1983, and he also has a bachelor s degree in English from Thiel College. Ebert was employed as an accountant with manufacturing companies for over 23 years. He considers himself a moderate conservative who believes in fiscal responsibility. Ebert also serves the people of Franklin Township as an elected auditor. Karl E. Ebert, nominee Cranesville, Pa. Ebert s hobbies include gardening, carpentry, hunting, fishing, and maintaining an old car and tractors. He and his wife became Northwestern REC members when they moved to Franklin Township in 2000. The couple has two grown daughters. District 3: Amity, Union, Wayne, and Concord townships, and Elgin and Union City boroughs in Erie County; and Spring Creek Township in Warren County. Michael Sample, of Wayne Township, has been a member of Northwestern REC since 1994. He is the owner of The Titusville Herald and The Forest Press, of Tionesta, Pa. He is also a co-owner of The Corry Journal. As a business owner in an industry that has experienced tremendous challenges, he adapts to change very well. Sample graduated from Penn State Behrend with a Bachelor of Science degree in management in 1989. He has worked at daily and weekly newspapers in Pennsylvania, New York, and Alabama, and has over 30 years of experience in the newspaper industry. Michael Sample, incumbent Corry, Pa. Sample has served as a representative of District 3 since 2015, serving as board secretary and as a member of the cooperative s Executive Committee. During his time on the board, Sample has taken classes toward becoming a credentialed director. His requests led to the cooperative conducting a detailed member survey regarding the feasibility of Northwestern REC getting in the broadband service business. With his wife Debbie and two grown children, Sample and his family have always called northwestern Pennsylvania home. They are members of Christ Our Hope Parish in French Creek, N.Y., and live outside of Corry on their farm.
District 5: Cussewago, Hayfield, Venango, Cambridge, and Woodcock townships, and Woodcock and Saegertown boroughs in Crawford County. Kathryn Cooper-Winters was first elected to Northwestern REC s board in 1988. She previously served as the board treasurer for 11 years and has met the requirements for the National Rural Electric Cooperative Association (NRECA) director certification, including Credentialed Cooperative Director, Board Leadership Certificate and Director Gold Certificate. Cooper-Winters is the board representative to the Allegheny Electric Cooperative, Inc. (AEC) Board of Directors. She has been the AEC board treasurer and vice chairman. Cooper-Winters is also a director for the National Cooperative Services Corporation (NCSC). She has been a co-op member since 1985. Kathryn Cooper-Winters, incumbent Saegertown, Pa. Cooper-Winters was employed by Northwestern REC in communications for eight years before working as a farm consultant with Agway, Inc. In 1984, she set up her own accounting and tax business with her father, the late Jesse G. Cooper, retired Penn State University professor, AGVIZE, Inc. Cooper Associates offered accounting and tax services for 150 area client/farmers. She retired from AGVIZE in 2008. Cooper-Winters is a member of the Saegertown United Methodist Church and has served as the Finance Committee chair. She is married to William R. Winters Sr., and has one son, five stepchildren, two grandsons and nine step-grandchildren. District 10: Wayne Township in Crawford County; Jackson, Plum, Oakland, Cherrytree, and Canal townships in Venango County; French Creek Township in Mercer County. Lanny Rodgers, incumbent Carlton, Pa. Lanny Rodgers retired as a regional manager for the Pennsylvania State Employees Retirement System. He served in the United States Marine Corps from 1962 to 1966. Rodgers is a former director of the Franklin YMCA from 1992 to 1994. He is an active member of the Franklin BPO Elks Lodge No. 110, the Cochranton American Legion, and the National Association of Watch and Clock Collectors. Rodgers was first elected to the board of directors at Northwestern REC in 2000. He has served as vice president for four years, and on the member ACRE committee. He formerly served as the Pennsylvania representative to the National Rural Electric Cooperative Association board. Rodgers is also a Credentialed Cooperative Director and has attained the Board Leadership Certificate designation. Rodgers and Georgia, his wife, have two children, five grandchildren. They have resided in the Carlton/Cochranton area for over 30 years. Director elections take place on a rotating basis at the annual meeting. This year, directors from Districts 1, 3, 5 and 10 are up for election. Nominating meetings were held in each of these districts in March and April. The members who attended these meetings nominated people they believed met the qualifications necessary to be a director of Northwestern REC. The above biographical sketches will familiarize you with the candidates.
northwestern rural electric cooperative, inc 2017 annual meeting election 14l JULY 2016