PRESS RELEASE
(Below is the full version of the remarks that Joe Slater prepared for the 2006 Annual Meeting, which was held on August 30. Due to the mild rain that evening, Mr. Slater delivered a shortened version of the remarks.)
Good evening. Thank you for being here tonight. Before I get into my remarks, I want to introduce a very special guest whom we’ve invited to speak this evening. Every year, electric cooperatives from across the nation sponsor a Youth Tour that is held in Washington, D.C. High school students from as far away as Alaska and Hawaii participate in the tour.
One of the students SMECO sponsored this year was Eric Hubble. Eric is a senior attending The Calverton School. He’s a member of the National Honor Society; he plays soccer, tennis, and the guitar. He lives in Owings in Calvert County, and we invited him to tell us a little bit about his Youth Tour experience.
Ladies and gentlemen, please welcome Eric Hubble.
Hello, my name is Eric Hubble, and for four days this past June SMECO sponsored my participation in the Rural Electric Youth Tour in Washington D.C. I toured our national monuments and memorials, met with both a Senator and a Representative from Maryland, and visited several organizations that work to make this country a better place.
Foremost among these visits was our trip to the headquarters of the American Red Cross. We received a behind-the-scenes look at many of the different activities that must go on to allow the Red Cross to provide fast and effective disaster relief, from gathering and transporting supplies and people to assist with events the size of Hurricane Katrina, to aiding families whose homes burn down. We talked with people who have dedicated their lives to the service of others, people who have the skills and confidence to rapidly react to unforeseen and unpredictable catastrophes. Every member of the tour respected these true role models.
Following this visit, we toured the monuments of our nation’s capital. Whether viewing them for the first time or the fiftieth, one cannot help but reflect on their significance. The tens of thousands of names etched into the Vietnam War Memorial illustrate the magnitude of war, the sacrifices made by Americans for their country, and the responsibility of political leaders to do what is best for those who follow and trust them. “Freedom is not Free,” the line carved into the Korean War Memorial, forever reminds us that the nation and liberties we daily take for granted have been bestowed upon this generation by the determination and selflessness of generations past. Viewing these memorials, we were all given a new appreciation for the difficult task of making decisions that our elected officials must undertake.
Meeting with two of these officials, Representative Gilchrest and Senator Sarbanes, was a once in a lifetime opportunity. I was able to converse with real difference-makers in our federal government, discussing topics ranging from public education, to the environment, to the war in Iraq. They each showed the wisdom, poise, and intellect of true statesmen; it was plain to see that both had a deep desire to make a positive difference at a time when the Nation’s future, and the future of the world, are being shaped every day by the decisions made in Washington. Being able to attach real faces and personalities to what can sometimes seem like a distant and impersonal government has made me realize that politicians are, in fact, people. And seeing this reinforced the idea that anyone with dedication and vision can rise as far as his or her merits allow.
Honoring those who best exemplify this dedication, Arlington National Cemetery was among the most moving sites our SMECO group visited. Never before having seen the burial ground, I was struck by the uniformity of the graves, and found great meaning in the nondescript rows of small white headstones. While each fallen soldier made a unique contribution to his country: fighting for its independence, endeavoring to maintain its unity, or dying to protect its shores from foreign threats; all had one thing in common. They gave their lives for the nation, and the idea, they believed in. And it made me realize that every one of us can make our unique contributions for this common cause. While they may be widely recognized, like those of John and Robert Kennedy, or unknown, but equally important, like those of the soldiers with grave-markers lost in a crowd of thousands more, we can do our part to realize the American ideals that have flourished from Jefferson, to Lincoln, to today.
I would like to thank SMECO for sponsoring all of the students from Southern Maryland who participated in the youth tour and for providing us with the opportunity to have this enlightening experience.
Thank you, Eric.
It’s wonderful to have such talented young people with us at our Annual Meeting—people like Eric, Rachel Escolopio, the sixth-grader who sang our national anthem, and the students from Chopticon High School’s ROTC program. They give us confidence in our future. They are bright and talented; we’re glad they are here, and we hope this experience will contribute to their success.
For SMECO, this has been a year of both challenges and opportunities. Challenges, because of the worldwide increase in the cost of energy. Opportunities, because the way that SMECO purchases power serves as an example of how electric cooperatives can work to keep power more affordable for their customer-members.
Ladies and gentlemen, I’m proud to say, that compared to Maryland electric utilities that are not operating under rate caps, SMECO’s rates are among the lowest. And, although the power component of our costs has increased, our base rate has not increased in 12 years.
Managing our power requirements in this volatile and uncertain period has been a great test of our organizational capabilities. We took a bold industry lead when we adopted the “managed-portfolio” approach to meeting our power supply requirements. As a result, SMECO’s power cost is lower than any other comparably sized or larger utility in the State. The proof is in the numbers, we enjoy rates lower than the two major utilities in Maryland: 27% lower than BGE and 11% lower than Pepco.
More importantly our program for purchasing power ensures stability and certainty in prices, as well as reliability of supply. Partnering with over 20 different suppliers reduces the risk of dependence on one or two sources of power. Placing all of your eggs in one basket in this volatile industry is not wise.
We have earned the respect and commendation of the State’s highest elected officials. In fact, Senate Bill 1, adopted during the Maryland General Assembly’s Special Session in June, and held exclusively to address rising electric rates, included provisions for the larger investor owned utilities in Maryland to adopt a system of power procurement modeled after SMECO’s.
This is not to say that we aren’t highly sensitive to the impact of higher electric prices on you individually. When considering gasoline at $3.00 per gallon, heating oil at almost twice the price, natural gas in double digit increases, and on and on, all of our household budgets are strained. We are working diligently to address your needs. That is one reason why we launched the “Conserve and Contribute” program to assist our members in this difficult time.
Your co-op has a strong history of working to improve life in your community. As you saw when you came out of the building tonight, we had a Conserve and Contribute display, and we offered a free compact fluorescent bulb to each voting member. We’re working hard to make sure all customers know how to manage their energy bills by using power wisely and cutting their costs through conservation. We have a professional team of energy use advisors who are anxious to help you. They are here tonight if you wish to contact them.
We’re also helping our members who are in need of assistance. Through Project Match, SMECO is matching contributions from customers and employees to help families in Southern Maryland pay their heating bills. Last winter, with your help, we donated over $56 thousand dollars to Project Match. This year, our Board has doubled SMECO’s matching contribution to $50 thousand, which we hope with your donations will reach a combined $100 thousand to help our friends and neighbors stay warm this coming winter.
Rural electric cooperatives are the backbone of the nation’s power grid. Rural communities joined together to bring the power of electricity to their homes, farms, and towns more than 70 years ago. From the shores of the Chesapeake to the mountains of Montana, electricity provided the power of hot water for warm baths, lights for increased productivity, and heat in the winter.
Electric co-ops were built through hard work and determination, but they were successful because of cooperation: that is perhaps the single greatest difference between electric cooperatives like SMECO and our investor-owned neighbors. That is why you—our members who are here tonight—deserve special thanks. Your involvement—your cooperation—contributes to our success.
I would like to introduce some other people with us this evening who also contribute to the success of SMECO and electric cooperatives.
First, from the Virginia, Maryland, Delaware Association of Electric Cooperatives we have:
Those of us who are involved with electric co-ops have a tremendous advantage because we are building on a strong foundation—one built by strong leaders like Louis P. Jenkins, Sr.—a great example of why co-ops are successful.
Mr. Jenkins, who passed away in May, was SMECO’s General Counsel for the past 28 years. Before that, Mr. Jenkins served on SMECO’s Board of Directors for 13 years as a representative of Charles County. During his forty-plus years of dedicated service, his legal knowledge and ethical standards helped transform SMECO from a small rural electric utility into one of the largest cooperatives in the nation. Mr. Jenkins was a truly dedicated individual and we will remember him fondly.
Mr. Jack Williams is another example of a devoted member. He retired from our Board this year after serving as a Calvert County director since 1958. Among his many accomplishments, Mr. Williams served on the National Rural Electric Cooperative Association board from 1976 to 1993, including a term as president of that board. He was the first SMECO director to hold that post.
SMECO has grown and thrived because of members like Mr. Jenkins, Mr. Williams, and members like you. Cooperatives are owned and operated by customer-members. By attending the Annual Meeting, members govern the way the co-op is run: you elect our Board, which has oversight of our activities and our mission.
Since 1937, SMECO has provided electric power to its members, but our mission today is the same it has always been: to provide our members with reliable service at competitive rates. And SMECO’s focus on delivering competitively priced power has resulted in rates that are among the lowest in the state.
Co-ops are not in business to make profits; we operate at cost. Any surplus is returned to members as capital credits. In 2005, SMECO refunded $4.5 million in capital credits. Over the years, SMECO has returned over $75 million in capital credits to our customer-members, keeping your investment in your community.
Active members help us focus on meeting community needs. Last year, over 2,400 people attended SMECO’s annual meeting, 1,400 registered to vote, and 270 voted by mail. This year we have approximately 2,400 in attendance, and nearly 300 members voted by absentee mail-in ballot.
Our members are our customers and our owners. We get our strength from you, but we are also faced with challenges.
This cooperative is charged exclusively with the mission of serving our Southern Maryland peninsula, a responsibility we take seriously and with absolute fidelity; and we are in perfect alignment with your best interests. The men and women who work at SMECO are your family, friends, and neighbors, and our children go to school together. Collectively, we hold SMECO responsible and accountable for providing us with the vital resource of electricity.
Allow me to take a moment to address safety. We work in a hazardous business. Concern for our members and our employees’ safety remains our most important job. This year we were awarded the highest rating on record from our national association’s Rural Electric Safety Accreditation Program. This rigorous examination of SMECO’s operational and administrative safety program reveals our total commitment to working at the highest industry standards.
SMECO’s active members keep us focused on doing the best job we can. Whether it’s working to keep costs competitive, offering community support, or using our resources to deliver reliable power to homes and businesses, this is the value of the Cooperative Difference.
And we are making a difference. We use several suppliers and a managed portfolio for greater price stability and reliability. SMECO works to achieve the best wholesale power arrangements available on the market, with no mark-up to our customer-members and no profit to SMECO. We operate at cost and your investments stay in our community. We ensure a safe environment. And most important, we are accountable to you—our owners. In a cooperative, we are all in this together, and together, we have the power to make a difference.
Thank you for joining this evening and I wish you luck in our prize drawing!