As I stand here today, delivering my fourth report to the membership of ACE Power, I am overwhelmed with a sense of pride in our cooperative. 2026 has proven to be a very difficult and trying year, both for our association and the community. However, just as we have demonstrated in years past, we were able to tackle all obstacles with the same tenacity and grit as we have over the previous 92 years.
In the fall of 2025, our leadership teams met to examine the strengths and weaknesses of our organization, define our mission, identify our core values, and discuss strategic initiatives that would inform our decision-making for the next three to five years. That plan was then presented to our board of directors, refined, and rolled into our Strategic Plan.
Clarity was provided to our Mission Statement: Advancing, connecting, and empowering our community with innovative solutions that improve lives, drive growth, and prepare us for the future.
The Mission Statement can be encapsulated in the acronym A.C.E.: Advance, Connect, Empower.
While there are many guiding principles that we adhere to every day, our Core Values provide focus to our teams:
- Safety First – The safety of our employees and the community is always our number one priority and concern.
- Operational Excellence – Our commitment to continuous improvement, advanced tools and processes, and high standards ensures we deliver world-class services to the community.
- Next-Mile Service – Doing what needs to be done without hesitation – for our community and our fellow team members.
- Mission Focused – We exist to help our community and make it a better place to live.
- Building on Legacy – Staying true to the principles, work ethic, and service culture established almost 100 years ago.
- Team Driven – Prioritizing and relying on seamless teamwork across our workforce, industry partners, and the community.
Our Strategic Plan helped to inform us on our first strategic priority – to implement the Chick-Fil-A model. Organizational excellence and next-mile service are the primary differentiators from our competitors, just as it is to Chick-Fil-A. To measure our success, we have implemented customer surveys that allow our customers to give us immediate feedback on their experiences with ACE. Feedback is important and allows us to provide continuous improvement with our employees and within our departments. I’m proud to share that the results have been excellent. Customers are receiving quick and efficient service, employees are seen as competent and knowledgeable, and interactions have moved from transactional to relational.
When we discuss continuous improvement it’s hard to overlook the advances that are being made within our Operations team. Much progress has been made on the new Industrial Substation on South Parkway. We hope to be able to energize and commission the substation very soon. We have also broken ground on the new substation adjacent to the existing District Substation on Cox Street.
Significant line upgrades have also been undertaken, most specifically on the eastern side of the county, around Highway 72 east and Salem Road. These upgrades continue to strengthen our electric distribution system, providing a stronger backbone that increases reliability in those areas.
One major factor impacting our community and our organization was the Ice Storm in late January. This event highlighted the dramatic effect weather can have on the bulk electric system, as TVA lost all transmission feeds into Alcorn County; leaving ACE with 100% of our meters without power. Within 39 hours, transmission was restored to circuits that were able to support some of the gas stations and grocery stores in town. However, our hospital circuit was down for a total of 64 hours, causing major disruptions to their operations and creating critical life-threatening conditions.
Our response to this event was not just electric power restoration, it became a humanitarian crisis response. Our experience with previous storms helped to inform our estimated time to restoration – initially 10-14 days.
Proving to be a significant challenge was the lack of operational capabilities within our facilities, coupled with extremely cold and freezing weather several days after the initial icing event. During early discussions with our lineman, I would ask them how they were doing and what they needed. Their response to me was always the same – please get help.
Help was a major challenge for us. We typically rely on Mutual Aid from state-wide electric cooperatives, then we reach out to coops in neighboring states. However, many of the in-state coops were also affected, negating any help we would receive from them. Neighboring states had been dispatched out west to Texas and Arkansas to assist them prior to the weather hitting Mississippi. We’re grateful that we were initially able to get assistance from three electric coops in Florida and three coops in Alabama. Eventually we did receive one electric coop from Mississippi, East Mississippi EPA in Meridian, as well as others in Alabama and Georgia.
But we knew we needed even more help. We reached out to a network of electric contractors and received an immediate response. We had boots on the ground by Tuesday, January 27th. At our peak, we had over 400 contract and mutual aid personnel that were added to our existing workforce for electric restoration, and another 250 personnel added for fiber restoration. We’re extremely grateful to those who came to our aid and withstood nearly unbearable conditions to get our community reconnected.
We’re also grateful to our community for their response and assistance to every request that we made during the restoration process. Whether providing lodging, meals, hand warmers, laundry service, monetary donations, or just moral support; we felt tremendously supported and would not have been nearly as effective without that support.
The Ice Storm also highlighted some additional deficiencies previously uncovered during our strategic planning in late 2025. Most notably the need for whole-facility backup generation – able to support operations during large-scale events. This need was not only identified by the staff of the association, but by our board of directors during in-depth site walks of our campus.
In June, we engaged Worsham Brothers to serve as the Construction Manager at Risk for a Systems Operation Center, or SOC. In July we began the interview process for an architectural design firm. Through that process we identified JBHM Architects, out of Tupelo and Columbus, to serve as the design architect.
Recently we held the initial design kickoff of the SOC, which we anticipate being 15,000-20,000 square feet, with approximately 3,500 square feet being FEMA hardened with redundant systems for critical infrastructure. An aggressive timeline has been established, and we have targeted for construction to begin next summer with a completion date of late 2029.
The SOC will support engineering, system monitoring, and dispatch for both power and fiber operations. The SOC will also contain conference rooms for emergency coordination, support offices, and an event space capable of serving up to 350 people. This state-of-the-art facility will enable us to increase our response time and provide efficient coordination and information sharing for the next 30-40 years.
With all the construction and restoration activities going on, we must ensure that we are being good fiscal stewards with the association’s funds. Strategic investments were made years ago, allowing cash flow to support long-term plant growth. ACE Fiber’s success has enabled us to bring in alternative sources of revenue to support flat electric rates. And a large equity position enables us to leverage long-term debt to amortize these asset additions over time, ensuring that all ratepayers contribute to the cooperative’s success.
ACE Power’s Gross Electric Plant stands at over $172 million, with Total Assets net of Depreciation at over $139 million at the fiscal year end. Outstanding Debt is currently over $33 million, but we hope we can offset this sum with FEMA reimbursements of at least $15 million. Total Revenue for the fiscal year surpassed $70 million, with over $3.5 million coming from pole attachments and fiber lease revenue from ACE Fiber.
A major indicator for a healthy electric cooperative is that of line loss. While the Tennessee Valley Average for cooperatives is 4.66%, we’re proud to report that ACE is among the lowest in the Valley at 3.42%. This indicates sound billing and metering practices, as well as an efficient operating plant.
ACE Fiber’s success and growth continue to be strong. Despite setbacks caused by the January Ice Storm, ACE Fiber was able to achieve net income north of $1.6 million in fiscal year 2026. The income produced by fiber operations can be distributed to ACE Power and used to offset electric rate increases. This is a great benefit to electric ratepayers and to our community. While we don’t yet have 100% of our electric members taking our fiber service, 100% of our members share in the success of ACE Fiber.
We are beginning to see positive results from our investment in ACE Fiber’s New Albany network, as we have eclipsed the breakeven point and are starting to see profitability in the market. The profits that are generated in New Albany will be directed back to the ACE Power membership in Alcorn County – those who made the investment. All of this has been achieved with zero debt issued in the New Albany market.
While we are proud of our accomplishments over the past year, we are never satisfied and are always looking for ways to improve. Our current technology stack is something that we are constantly evaluating and refining. Systems such as Outage Management, Prepaid Metering, and Customer Payment Portal are all undergoing evaluation for upgrades and enhancements. A Damage Assessment application was rolled out during the Ice Storm and continues to be optimized as we strive to gain more field intelligence during large outages.
Our fiber team recently completed a large migration of our voice system to a new upstream carrier, providing more operational flexibility with a quicker response to customer issues. In September of 2025, our Tier 1 support center transitioned to providing in-house support, rather than using 3rd party contractors. This move necessitated the development of a new support ticketing system. We have already seen many benefits from this move, most notably with easily measured metrics to gauge our team’s performance.
Finally, in December 2025, our first class of the A.C.E. Leadership Academy graduated and was recognized at our Christmas Party. Since then, we have had a second group graduate and are already three sessions into our third class. The Leadership Academy gives our employees a chance to increase interpersonal communications, study communication styles, and learn how there are leaders all throughout the organization that can assert their influence to make the association better.
All that I have discussed can seem overwhelming, and it wouldn’t be possible to do any of it without a great team behind everything. We’re also fortunate to have a knowledgeable and competent board of directors, who ensure that the mission of ACE is being fulfilled. As we charge into the future full steam ahead, my sincere hope is that we can continue persevering through the tough times, leading through adversity, and enjoying the successes we will see through the hard work we engage in.
Sincerely,
Sean M. McGrath, CEO