2023 ANNUAL REPORT
TO THE MEMBERSHIP OF
ALCORN COUNTY ELECTRIC POWER ASSOCIATION
August 15, 2023
I am honored to present this year’s annual report to the members of the Alcorn County Electric Power Association (ACE), the pioneering rural electric cooperative in America. With a rich history spanning 89 years, ACE has consistently demonstrated its commitment to delivering affordable and dependable electricity. I am pleased to report that we remain dedicated to upholding this tradition of excellence for our valued members.
This past year, we experienced significant organizational changes marked by the retirement of seven esteemed individuals, collectively contributing 231 years of expertise. We extend our heartfelt gratitude to these retirees for their invaluable service and camaraderie throughout their careers. Their legacy serves as an inspiration, propelling us to emulate their remarkable contributions. Despite the loss of their experience, our organization was fortunate to possess a deep reservoir of talent, allowing us to replenish our ranks from within.
We experienced a couple of significant changes recently. Firstly, our CEO, Eddie Howard, retired, leading to a loss for our organization. Eddie’s time at ACE was marked by numerous impressive accomplishments, with the establishment of ACE Fiber being a particularly foundational achievement. His practical leadership approach had a profound impact on our organizational culture and environment. I’m personally grateful for the friendship and mentorship he provided during my tenure under his guidance. His retirement left the organization in excellent condition, and his legacy will endure within the association.
Additionally, this year brought the departure of a longstanding board member, Sam Tull. Mr. Tull dedicated over five decades to our board of directors, leveraging his expertise in construction and business leadership to steer the association. His commitment to the community was evident through his thoughtful decision-making process, always considering the broader membership’s welfare. We extend our best wishes to Mr. Tull as he embarks on new endeavors while continuing to lead the community.
As we bid farewell to Mr. Tull, we warmly welcomed Ben Ferrell as the latest addition to our board of directors. Mr. Ferrell, who owns and operates Shelter Insurance in Corinth, brings a keen business acumen and a strong community spirit to the table. We’re excited about his upcoming contributions to the board and how they will propel our association to greater heights.
Even in the past week, our association has confronted severe storms sweeping through our service region. Our employees have consistently demonstrated remarkable resilience in handling the aftermath of these storms. Their unwavering focus and determination to restore power and fiber services as swiftly and safely as possible continue to impress me. There were instances when we needed to activate mutual aid agreements with neighboring cooperatives in Tippah and Prentiss County, and we’re sincerely grateful for their willingness to provide assistance. Furthermore, we were able to reciprocate this support by aiding Coahoma Electric Power Association, Tippah County Electric Power Association, and Southern Pine Electric in February and June, respectively. We’re pleased to report that all three cooperatives have effectively rebounded from their challenges, and we take pride in our ability to extend a helping hand during their times of need.
Over the past year, ACE encountered several challenges, notably in late December 2022 when adverse weather conditions disrupted TVA’s electricity generation capacity. The rapid temperature drop led to unprecedented electricity demand, prompting TVA to activate its Emergency Load Curtailment Program. ACE, alongside other local power companies, was required to initiate load reduction measures on Christmas Eve. Both TVA and the local power companies have diligently studied this event, devising strategies to mitigate the need for future curtailments. ACE is unwavering in its commitment to providing highly reliable electricity to its members. We pledge to collaborate closely with TVA, federal regulators, and legislators to ensure the stability of our power supply. This encompasses the utilization of dispatchable energy generation, including natural gas and existing coal assets, until advanced nuclear technologies supplement the growing array of renewable energy sources in TVA’s generation portfolio.
Financially, ACE stands on solid ground despite grappling with economic pressures stemming from inflation and supply chain disruptions. Our response to supply chain challenges includes bolstering our inventory to over $2.5 million, enabling us to address member demands for new construction and weather-related maintenance concerns. Notably, the electric transformer market has proven especially challenging, with rising costs and extended lead times. The escalation of fuel costs, transmitted from TVA to end-users, has boosted revenues to over $66.5 million. Similar cost increases are reflected in our expenditure on purchased power from TVA, which has climbed to $48.2 million. Our current debt amounts to $22.5 million, and over the past year, ACE has successfully retired over $1.45 million in principal. With an equity ratio of 65%, we possess considerable borrowing capacity for future infrastructure projects, ensuring competitive rates for our members.
The previous year saw remarkable uptake in our fiber services, particularly among our business accounts. Since August 2020, we have connected nearly 7,300 residential subscribers and established partnerships with over 450 business accounts. We are elated by these achievements and consider it a privilege to offer essential services to our community. Our reliable and cost-effective broadband and voice services contribute to the growth of local businesses. As telecommunications technology advances, we pledge to remain at the forefront, delivering the most innovative solutions to our subscribers.
Furthermore, in fiscal year 2023, we successfully negotiated a long-term fiber lease agreement with New Albany Light, Gas, and Water (NALGW). NALGW is currently in the design phase of its network expansion, with construction anticipated to commence in the fourth quarter of this year. This mutually beneficial project enhances both communities by delivering essential fiber broadband services to New Albany while diversifying revenue streams for ACE Power. This endeavor aligns seamlessly with our mission to maintain affordable electric rates.
As we approach the milestone of ACE Power’s 90-year anniversary in 2024, we reflect on its origins as “The Corinth Experiment.” This venture has demonstrated the viability of the public power model and its role as a catalyst for regional economic development. As we embark on our 90th year, the trailblazing spirit of our past guides us towards future success, rooted in core values such as integrity, respect, compassion, dedication, and hard work.
Sean M. McGrath