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2010Southside Electric CooperativeAnnual Report
2 Southside Electric Cooperative
Corporate Profile
Southside Electric Cooperative(sec) is a not-for-profit, member-
owned electricdistribution cooperative, providing quality electric service(s) to 53,000-plus meters in
portions of 18 counties, six towns and one city in south-central Virginia. 74 years ago, no established utility
wanted to invest in a distribution system to sell electricity to the rural areas and small towns that were not
densely populated. In 1937, SEC was formed because rural neighbors of Southside Virginia had a shared
need for electricity, and they agreed to work together to obtain a service no one else would offer.
ments with other organizations or raises capital from
external sources, it is done so based on terms that en-
sure democratic control by the members and maintains
the cooperative’s autonomy.
5. Education, Training and InformationCooperatives provide education and training for mem-
bers, elected representatives, managers and employees
so they can contribute effectively to the development of
their cooperative. Members also inform the general pub-
lic about the nature and benefits of cooperatives.
6. Cooperation Among CooperativesCooperatives serve their members most effectively and
strengthen the cooperative movement by working together
through local, national, regional and international structures.
7. Concern for CommunityWhile focusing on member needs, cooperatives work for
the sustainable development of communities through
policies and programs accepted by the members.
Seven Cooperative Principles
1. Voluntary and Open MembershipCooperatives are voluntary organizations, open to all
people able to use their services and willing to accept the
responsibilities of membership, without gender, social,
racial, political or religious discrimination.
2. Democratic Member ControlCooperatives are democratic organizations controlled by
their members — those who buy the goods or use the
services of the cooperative — who actively participate in
setting policies and making decisions.
3. Members' Economic ParticipationMembers contribute equally to, and democratically
control, the capital of the cooperative. This benefits
members in proportion to the business they conduct with
the cooperative rather than on the capital invested.
4. Autonomy and IndependenceCooperatives are autonomous, self-help organizations con-
trolled by their members. If the co-op enters into agree-
Corporate Mission Statement
Our primary mission is to provide quality, dependable, uninterrupted electric service to our membership
as effectively, efficiently and economically as possible. To expand this mission and to be sure we continue to
be the service provider of choice to our members in an ever-changing electric utility environment, your
Cooperative will strive to make available other value-added services the membership desires.
For your Cooperative to remain the electric service provider of choice, we must ensure we offer
the best and most dependable service available and be as attentive and responsive to our members’
needs, requests and desires as possible. To do this, we must construct, maintain and improve our
distribution system to the highest degree.
2010Annual Report 3
FrankW. BaconChairmanDistrict 2
Earl C. Currin, Jr.Vice ChairmanDistrict 2
JohnM. BoswellSEC GeneralCounsel
Quentin E.WilhelmiSecretaryDistrict 1
Herbert E.WinnTreasurerDistrict 2
Charles J. FriedlDistrict 3
Lillian H. HicksDistrict 3
John L. Lewis, IIIDistrict 3
Michael A. LobueDistrict 1
Paul S. BennettDistrict 1
Our Business Is Electric ...But We Get Our Power From You.
2010 SEC Board of Directors
SEC’s CoreBusiness Processes
• Keep the Lights On
• Treat Membersas Members
• Recognize Value,Give Value
4 Southside Electric Cooperative
Message To The Membership
Dear Members:
This 2010 Annual Report provides information
to you about the overall operation and financial
health of your member-owned business. You are
encouraged to read this report and direct any
questions or comments you may have about any
part of it to the SEC board of directors and
management staff.
fewer new connections continued during 2010
The number of new connections the Cooperative made during 2010 was 738, compared to 841 in 2009.
Again, this was due, primarily, to the overall depressed economic conditions that continued to persist
during 2010. The amount of kilowatt-hours of electricity sold during 2010, however, increased to
916,475,000, compared to the 838, 341.266 kilowatt-hours that were sold during 2009.
work plan activities
Work Plan projects were completed in Bedford, Campbell, Charlotte, Dinwiddie, Nottoway, Powhatan
and Prince Edward counties. These projects were included in the 2010-2011 construction work-plan and
included substation upgrades, multi-phase conductor replacements and pole replacements. These projects
totaled 86 miles of distribution construction and an additional 275 distribution pole replacements due to
issues found during the Cooperative’s pole inspection program. The Cooperative also energized two new
substations (Mead’s Store in Bedford County and Lake Chesdin in Dinwiddie County) in its ongoing effort to
strengthen system reliability. All work was completed at a combined total of $7.64 million.
$2.4 Million in Capital Credits Paid to SEC Members
During December, 2010, Southside Electric Cooperative board of directors approved the payment of
$2.4 million in capital credits to approximately 30,636 active members and 21,204 inactive Cooperative
members under a “first-in-first-out” and “percentage method” of payment.
Capital credits are paid back to members as the Cooperative is deemed financially able to make
the payments. SEC is, however, limited by the Rural Utilities Services (RUS), its mortgagor, as to the
amount it can return to members annually. The recently adopted “first-in-first-out” and percentage
method,” therefore, seeks to maximize the number of members receiving capital credit retirements
from the Cooperative.
Jeffrey S. EdwardsSEC President &Chief Executive Officer
Dr. FrankW. BaconChairman of SECBoard of Directors
2010Annual Report 5
2009 2010Taxes Paid:
Personal Property $ 965,466 $ 1,035,888Payroll $ 933,308 $ 873,783Taxes $ 1,717,180 $ 1,735,242State Consumption Taxes $ 758,262 $ 824,956Special Regulatory Taxes $ 58,888 $ 118,679Local Consumption Taxes $ 280,792 $ 305,422
Taxes were collected for the following jurisdictions during 2010: Amelia, Appomattox, Bedford, Brunswick,Buckingham, Campbell, Charlotte, Chesterfield, Cumberland, Dinwiddie, Lunenburg, Mecklenburg, Not-toway, Pittsylvania, Powhatan, Prince Edward, Prince George and Sussex counties, the towns of Altavista,Blackstone, Crewe, Hurt, Kenbridge South Hill and the City of Petersburg at no costs to them.
Taxes Paid During 2009 and 2010
SEC Director District Map
Revised February 25, 2010
QUENTIN E. WILHELMIPAUL S. BENNETTMICHAEL A. LOBUE
FRANK W. BACONEARL C. CURRIN, JR.HERBERT E. WINN
CHARLES J. FRIEDLJOHN L. LEWIS, IIILILLIAN H. HICKS
6 Southside Electric Cooperative
Services & Programs
AWARE PROGRAM
AWARE is an SEC-sponsored member education
program that seeks to inform Cooperative members
about their member-owned business, how it operates
and some of the challenges SEC faces at the state and
national levels..
BUDGET BILLING
A fixed amount to be paid each month by the individual
member, based upon the previous twelve month’s electric
usage. Any previous balances (debits or credits) are
included in the calculations to “true up” the account. The
account is reviewed and could be revised every six months
to reflect changing weather patterns and other factors that
might affect actual usage.
CALL CENTER
Promotes consistency in the provision of services to
members, as well as providing timely responses to
members’ concerns/inquiries from a central, “one stop”
entity within the Cooperative.
EBUSINESS / WEBSITEONLINE PAYMENT
This service allows SEC members to pay bills online at
www.sec.coop. Members may use VISA, MASTERCARD,
DISCOVER, or an Electronic Check drawn from a checking
account. They may also view the details of their current bill,
view a 12-month usage history, calculate an estimated bill,
request a security light installation, or report service
problems or outages.
ELECTRICAL SAFETY PROGRAMS
SEC provides programs to teach/promote electric
safety to children/adults. Contact the Cooperative’s Call
Center for details.
ENERGY AUDITS/ONLINE ENERGY AUDITS
SEC personnel are available to perform energy audits of
homes and other facilities at no cost to Cooperative
members. The audits consist of a “walk-through” inspection
to determine levels of insulation, condition and type of
doors and windows, the nature of other conditions and
electrical equipment present, as well as to make
recommendations that will enhance overall electric energy
efficiency and use. Check out SEC’s online audit program at
www.sec.coop and click on the Home Energy Suite.
ENERGYSHARE PROGRAM
A one-time financial assistance to pay electric service
bill(s) of eligible SEC member(s) after they have been
deemed ineligible to secure assistance and/or have
exhausted efforts to obtain help from other federal/state
programs.
EZPAY
Under the EZPAY bill payment service, members allow
SEC to instruct their bank or credit union to automatically
deduct the amount of the electric service bill from a
specified account each month. Participating members
receive a monthly billing statement and notification as to
what day the payment will be deducted from the
designated account.
INTERACTIVE VOICE RESPONSE
Members of Southside Electric Cooperative will now use
an updated interactive telephone service when calling the
Cooperative. “Telelink,” a comprehensive automated
customer service system that uses “Interactive Voice
Response” technology, has been added to our automated
telephone system. With VOICE RECOGNITION, members
simply may now SPEAK THEIR RESPONSES OR USE A
TOUCH-TONE PHONE KEYPAD to enter their information.
MEMBER LIFE-SUPPORT EQUIPMENT
Members should inform the Cooperative if they have
some type of life-sustaining equipment in their homes. The
account location will then be identified on SEC’s mapping
system and the affected member(s) will be notified during
instances of planned electric power outages. Priority will
also be given to these locations in the event of extended
power outages. It is important that members be familiar
with the type of life-sustaining equipment being used, e.g.
back-up feature included or if some type of standby
generation is needed.
KEY ACCOUNTS PROGRAM
This program allows SEC an opportunity to establish
a relationship and provide products and services to
its key commercial and industrial customers, which, in
2010Annual Report 7
Services & Programs
turn, demonstrates the Cooperative’s commitment to
meeting their immediate and future power-supply and
business needs.
NRECA-SPONSORED GROUPINSURANCE
This insurance is available to SEC members through the
National Rural Electric Cooperative Association.
Other Loan Resources:
United States Department of Agriculture (USDA)
• Targets low to moderate income families.
• Rural Development 502 loans and 504 grants available
for home financing, improvement and purchase of
energy conservation/weatherization measures. For
additional information, contact Jerry Outlaw, area
specialist, 100 C Dominion Drive, Farmville, VA 23901,
434-392-4906, ext. 105, or [email protected].
FARM CREDIT LOAN PROGRAM(ELECTRIC CO-OP MEMBERS)
Electric cooperative members are now immediately
eligible to apply for energy efficiency loans from their
local Farm Credit office. Loans can be used for a variety
of projects/purposes including upgrading windows/doors,
adding insulation, replacing heating/air-conditioning
systems and appliances with more efficient models,
as well as many other similar projects. SEC members
are encouraged to contact their local Farm Credit office
for information on how to apply/obtain financing for
energy-efficiency measures under this loan program.
Contact Jim Belfield, Farm Credit, at 804-746-1252 or
SECURITY LIGHTING
SEC will install a security light upon an existing pole at
no extra charge upon request of the member. Additional
lights are also available. (See Billing Information, Security
Lights – Schedule SL for applicable monthly rates and
Terms and Conditions.)
SELECTION OF HVAC SYSTEMS
SEC will assist members in the proper selection, sizing
and installation of heating/cooling equipment and systems
for homes/facilities at no cost to them.
SPEAKERS BUREAU
Personnel from SEC are available to serve as speakers/
presenters on a variety of topics at schools, civic and other
community-based organizations.
STANDBY GENERATOR
PROGRAM
This service allows SEC to provide advisory/consulta-
tive services to members in the installation of portable
and stationary generators for emergency electric power,
including installation of a double-throw switch. Units are to
be installed in accordance with all applicable codes and
regulations and maintained according to manufacturer’s
recommendations.
THIRD-PARTY NOTIFICATION
If you are concerned that you may overlook paying your
bill at some point in time and risk having your service
disconnected, Third-Party Notification may be for you. With
your authorization, the Cooperative will attempt to contact
a relative or friend. This third party can then help you
arrange payment before any service interruption occurs.
Visit our website and download a copy of the Third-Party
Notification Form.
VIRGINIA FUEL/CRISIS/COOLINGASSISTANCE PROGRAMS
SEC participates in these programs in cooperation with
local county departments of social services/HOPE
Incorporated. These agencies take applications, determine
eligibility of persons seeking financial assistance in paying
fuel, e.g. heating, cooling, etc., bills. Approved applications
are then forwarded to the Virginia Department of Social
Services for payment to the Cooperative and other
fuel/energy providers.
WIRING AND ELECTRICALCONSULTATIVE SERVICES
These services are available to SEC members who
might be performing various types of new construction,
remodeling, upgrading, expanding or relocating existing
facilities and equipment and/or who may be purchasing
various types of energy-efficient electrical equipment/
appliances.
8 Southside Electric Cooperative
CREWE, VIRGINIABALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2010
Assets 2009 2010Utility Plant:Electric Plant in Service $ 265,680,799 $ 275,263,362Less Accumulated Provision for Depreciation 80,167,357 86,360,267___________ ___________
Net Utility Plant 185,513,442 188,903,095
Investments:Investments in Associated Organizations 36,518,916 42,551,996Other Investments 1,678,453 1,074,691___________ ___________
Total Investments 38,197,369 43,626,687
Current Assets:Cash 1,627,952 160,973Accounts Receivable 8,859,526 10,377,922Materials and Supplies 923,075 710,375Other Current and Accrued Assets 5,933,317 6,529,988___________ ___________
Total Current Assets 17,343,870 17,779,218
Deferred Charges 10,904 3,421,652___________ ___________Total Assets $ 241,065,585 $ 253,730,652___________ ___________
Liabilities and Equities 2009 2010Equities:Memberships $ 226,965 $ 227,815Other Comprehensive Income (Loss) 677,874 815,548Patronage Capital 85,588,392 92,933,472___________ ___________
Total Equities 86,493,231 93,976,835
Long-Term Debt: 126,965,171 128,656,904
Other Non-Current Liabilities: 2,580,372 1,258,685
Current Liabilities:Current Maturities of Long-Term Debt 4,471,288 5,163,296Line of Credit – CFC 8,000,000 11,886,329Accounts Payable 7,964,151 8,051,755Consumer Deposits 1,300,488 1,837,340Taxes Accrued 343,551 367,837Other Accrued and Current Liabilities 1,174,620 1,164,259___________ ___________
Total Current Liabilities 23,254,098 28,470,816
Deferred Credits 1,772,713 1,367,412___________ ___________
Total Equities and Liabilities $ 241,065,585 $ 253,730,652___________ ______________________ ___________
Southside Electric Cooperative, Inc.
2010Annual Report 9
CREWE, VIRGINIASTATEMENT OF REVENUE, EXPENSE, AND PATRONAGE CAPITALFOR THE YEARS ENDED DECEMBER 31, 2009 AND 2010
2009 2010Operating Revenues $112,759,583 $112,922,658Operating Expenses:Cost of Power 74,394,841 69,180,473Distribution – Operation 2,283,327 3,196,927Distribution – Maintenance 9,288,587 10,398,681Consumer Accounts 2,262,506 2,501,670Customer Service & Information 1,341,697 2,136,979Administrative & General 4,644,966 5,818,053Depreciation & Amortization 8,113,408 9,270,713Taxes 64,781 43,278Interest on Long-Term Debt 7,353,335 6,634,970__________ __________
Total Operating Expenses 109,747,448 109,181,744__________ __________
OperatingMargins (Loss) Before Patronage Allocations 3,012,135 3,740,914
Patronage Allocations:Generation andTransmission 6,323,605 6,010,004Other 262,637 232,943__________ __________
Total Patronage Allocation 6,586,242 6,242,947__________ __________Net OperatingMargins 9,598,377 9,983,861__________ __________
Non-Operating Income (Expense):Interest Income 111,146 101,936Other Non-Operating Income ( 185,680) (38,367)__________ __________
Total (74,534) 63,569__________ __________NetMargins 9,523,843 10,047,430__________ ____________________ __________
Other Comprehensive Income (Loss)Postretirement Benefit Termination Gain 6,632,158 0Unrecognized Postretirement Benefit Cost 0 0
Comprehensive income (loss) 16,156,001 10,047,430__________ __________
CHANGES IN PATRONAGE CAPITALPatronage Capital – Beginning of Year 78,366,150 85,588,392NetMargins 9,523,843 10,047,430Retirement of Capital Credits < 2,301,601> <2,702,350>
Patronage Capital – End of Year $ 85,588,392 $ 92,933,472__________ ____________________ __________
AUDITOR’S STATEMENT
Southside Electric Cooperative was audited for the year ending December 31, 2010, by Adams, Jenkins & CheathamCertified Public Accountants and Business Consultants of Midlothian, Virginia. The financial statements of SouthsideElectric Cooperative were found to present fairly the financial position and results of operations. The complete Accountant’sReport is available for inspection at the Cooperative's Headquarters Office in Crewe, Virginia.
Southside Electric Cooperative, Inc.
10 Southside Electric Cooperative
Consumer Accounts & Sales
Operations & Maintenance
Administrative & General
Depreciation
Interest Expense
Profits
Power Cost
Public Buildings
Small Commercial
Large Commercial
Residential
Percent of Expenses & Operating MarginsPer Revenue Dollar
Sources of Revenue(KWH Sales)
Sec Graphs
4.11%
5.15%
8.21%
5.88%
3.31%
6.1%
6.2%5.0%
61.30%
82.7%
12.04%
2010Annual Report 11
Mark Your Calendar and Plan to Attend!
Registration activities to take place from 8:30 a.m. until 10:45 a.m.
Featured activities include:
• Health Fair Activities from 8:30 a.m. to 11:00 a.m.Free Health Screening Information/Instructions
• Entertainment
• Lunch Served from approximately 11:45 a.m. to 1:00 p.m.
• Reports to Members
• Election of Persons to the Southside Electric CooperativeBoard of Directors for Districts I, II and III
• Free Registration Gifts for Members –Periodic Prize Drawings
• Exhibits – Good Fellowship and Much More!
Southside Electric Cooperative
Sec Meeting Agenda
74TH ANNUAL MEMBERSHIP MEETING
SATURDAY, SEPTEMBER 24, 2011,AT HOOPER PARK, CREWE, VA.
Headquarters Office & Central DistrictLocated on Highway 460West
P.O. Box 7, Crewe,VA 23930 1-866-878-5514 (outages only)VAWATSToll Free 1-800-552-2118 FAX (434) 645-1147
EASTERN DISTRICTOFFICE
19416CarsonRoadDinwiddie,VA23841
NORTHERN DISTRICTOFFICE
2370 EmmanuelChurchRoadPowhatan,VA23139
WESTERN DISTRICTOFFICE
2882Dearing FordRoadAltavista,VA24517
WEBSITE: WWW.SEC.COOP