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2015 Year End Review and Update on Co-op Annual Meeting


Hamid Vahdatipour, C.E.O. Gary Cooper, Board President


Lake Region Electric Cooperative’s mission, adopted by the board of directors, 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 2nd lowest rate among the cooperatives in Oklahoma and the average Oklahoma rate is among the lowest in the nation. The board and the management team’s SKLORVRSK\ LV WR NHHS D ¿QDQFLDOO\ VWURQJ 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 49 percent since 2002 according to WKH 8 6 'HSDUWPHQW RI (QHUJ\ +RZHYHU LREC’s prices have increased only 25 percent during the same time period. In 2009, after LREC raised its rates, the members still enjoyed the 9th lowest rates among the cooperatives in Oklahoma. In 2015 we are now enjoying the 2nd lowest in Oklahoma. In 2002, 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 where in 2015 it is now $23,910,161 or 65 percent of LREC’s Revenue. LREC’s wholesale power supplier has informed us that the cost of the electricity we purchase is going up in 2016. 'XH WR WKH VWURQJ ¿QDQFLDO SRVLWLRQ


2 LREC Powerline Press


of LREC, we have been able to absorb the increases in power cost and other operating expenses in WKH SDVW IHZ \HDUV +RZHYHU GXH to the staggered economy and mild summer and winter temperatures, the cooperative’s revenue has dropped. Therefore, we are no longer able to absorb these increases in costs. The rates will have to be adjusted. We KDYH HPSOR\HG D FRQVXOWLQJ ¿UP WR review our expenses and revenues and recommend a new rate structure to be put in place. We believe that even with the implementation of new rates, our members will continue enjoying rates below the Oklahoma average. Your cooperative continues to PDLQWDLQ D VWURQJ HTXLW\


assets ratio is 49%. Your cooperative continues to maintain its electric grid, keep right-of-ways clear of vegetation and build and upgrade the distribution system in order to provide the most reliable service with a reasonable cost.


In the Beginning


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 opportunities this HPHUJLQJ WHFKQRORJ\ EURXJKW %XW UXUDO 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 Northeast Oklahoma, these pioneers formed Lake Region Electric &RRSHUDWLYH $V D UHVXOW WKH TXDOLW\ of life for our local communities was forever changed.


In the 21st Century, a new necessity, broadband internet.


In the 21st century, a new WHFKQRORJ\ LV HPHUJLQJ %URDGEDQG Internet. This new technology 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.


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In rural Oklahoma, we also need vital services to live a better life, access resources and ensure our children get the best education possible. In a survey conducted in 2015, nine out of ten told us that high speed broadband is either important or absolutely necessary IRU WKH TXDOLW\ RI OLIH LQ RXU VHUYLFH territory. LREC is willing and ready to provide this service. We started a pilot project in 2013 to gage the feasibility of providing high-speed broadband service to our members. Last year our members overwhelmingly approved creation of Lake Region Technology & Communications, LLC, in order to provide broadband service to the members. The pilot project has been successful and we are ready to expand the service. In order to do so, we need our members’ help. We would like for you to sign up for broadband service and let us know that you want it in your neighborhood. We will expand the service to the neighborhoods that show interest and meet certain subscription rates.


Excellent customer service, VWURQJ ¿QDQFLDO FRQGLWLRQ DQG UDWH stability have been among the top drivers directing Lake Region Electric Cooperative’s long-range planning and day-to-day operations. We are pleased to announce that we have met or exceeded those goals for 2015.


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