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Manager’s Update Annual Review and Update on Cooperative Lake Region Electric Cooperative’s mission adopted


by the Board of Trustees charges the cooperative to promote and sustain the self-reliance of members by providing the most reliable utility service at competitive rates. Our rates continue to remain steady after a downward trend from 1992 through 1998 despite the fact that other energy prices such as natural gas and propane have risen sharply. LREC’s last rate increase was in 2009. LREC now has the 3rd lowest rate among the cooperatives in Oklahoma and the average Okla- homa rate is among the lowest in the nation. The board and the management team’s philosophy is to keep a financially strong cooperative so we can ride through ups and downs in the economy and keep our member rates as low and stable as possible.


Electricity prices in Oklahoma have climbed 41 percent since 2002 according to the U.S. Department of Energy. How- ever, LREC’s prices have increased only 27 percent during the same time period. In 2002, LREC members enjoyed the 6th lowest rates among the cooperatives in Oklahoma. In 2012 we are now enjoying the 3rd lowest in Oklahoma. In 2004, 56 percent of LREC’s operating expenses, or $13,236,993, was comprised of the wholesale power cost. The environmental mandates have increased the power cost in 2013, it is now $23,840,477 or 65 percent of LREC’s Rev- enue. This means that we have been absorbing a big portion of the increase cost of purchased power rather than passing it on to the members. New EPA regulation is estimated to continue to artificially increase the cost of electricity generated by coal and force increases in our members’ bills. Due to the strong financial position of LREC, we have been able to absorb the increases in power cost and other op- erating expenses in the past few years. However, we may not be able to do so in the future depending on the size of these cost increases.


Back Then ……. In the 1930s, rural America had been left in the dark as electricity made its way across the country. Electricity had become a modern necessity and big cities enjoyed the oppor- tunities this emerging technology brought. But rural folks had to do without this needed commodity.


Into the gap stepped the hardworking men and women


of rural America who formed electric cooperatives to bring power to areas that had been overlooked. In our part of North- east Oklahoma, these pioneers formed Lake Region Electric Cooperative. As a result, the quality of life for our local com- munities was forever changed.


2 LREC Powerline Press


A New Necessity ….. In the 21st century, a new technology is emerging: Broad- band Internet. This new technol- ogy is transforming lives and bringing economic development to the areas that adopt it. Once again, we have been left behind. Your cooperative must step up to the plate and do what others won’t do.


In rural Oklahoma, we also need vital services to live a better life, access resources and


Hamid Vahdatipour, CEO


ensure our children get the best education possible. LREC is willing and ready to provide this service, but – because we al- ways have the best interest of our members at heart – we don’t want this project to impact electric service costs to members. Using a subsidiary to provide broadband telecommunications services keeps these two businesses separated, and one class of customers will not subsidize the other – only the members requesting this service will be responsible to pay for it. Customer service is LREC’s strong point. American Customer Service Index or ACSI is a measurement tool to evaluate the level of customer service provided by an entity to its customers. Many organizations set a goal and train their employees to achieve an ACSI score of 80. Electric utility in general has scored a rating of 72. I am pleased to announce that in a survey conducted in 2013, LREC received an ACSI rating of 83 from our members/customers.


Excellent customer service, strong financial condition and rate stability have been among the top drivers directing Lake Region Electric Cooperative’s long-range planning and day- to-day operations. I am pleased to announce that we have met or exceeded those goals for 2013.


Lake Region


Electric Cooperative’s 2013 Annual Report is available online at www.lrecok.coop /annual-reports


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