Although SouthEastern is a “Not for Profit Corporation”, it must generate sufficient revenue to pay its bills just like any other company.  Barring any unforeseen circumstances such as a major storm, this year your Cooperative should generate a margin of about $1,200,000 from total revenues of approximately $55,495,940.  That margin will be used to help pay $2,500,000 of principal on long-term debt and fund capital projects for improving your Cooperative’s electric system.

The Cooperative will face the same issues as other area businesses this year with escalation in the price of steel products, fuel costs and worker’s compensation insurance increases, all of which put pressure on the Cooperative’s ability to generate a positive margin.

Out of the previously mentioned fifty-five million dollars of total revenues, some 71 per cent of that amount or $39,391,780 will be used to pay for wholesale power costs. Depreciation expense of $3,701,275 will account for 6.7 per cent, and interest expense of $2,007,521 will equate to another 3.6%.

Collectively the three above mentioned expenditures amount to over 81% of your Cooperative’s total revenues.  In other words 81 cents out of every dollar collected from the membership will be used to pay for these essential expenses, leaving only 19 cents of controllable income available for operating and maintaining SouthEastern’s 3,500 miles of power line and related plant.

With the rate increases of recent years, some members are asking me what can be done to reduce cost and the above dialogue is provided to help them understand where their dollars are going and to clarify the fact that only 19% of the total revenue collected is available for discretionary spending.

Why is all of this important?  The answer lies in the fact that keeping members informed is all a part of the process which helps them understand the value of their Cooperative and is especially important in this day and time when corporations seem to regularly take advantage of customers or as some folks say “rip them off”.

If you haven’t noticed it already, our new billing tickets must be folded to fit in the pre-addressed envelopes that were sent with your billing supplies and with regard to the 19 cents of controllable expense referenced above, we are not trying to save money by buying cheaper tickets.  The answer is we simply goofed by having tickets printed by an outside vendor as a result of our in-house printer not being compatible with our new computer system.

Due to the fact that we are in the process of converting to an automated meter reading system and invoice billing, and the additional fact that it would require an expenditure of over $20,000 to purchase and mail out new envelopes, we are simply asking members to continue folding billing their billing tickets for the interim period.