FINANCIAL INFORMATION - Holy Cross · 2014 Financial Information ... 2015, on the Willits soccer/rugby field. You’re ... foot forward to help the Town of Basalt establish a Guinness

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2014 Financial Information

“Show Me The Money”

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HOLY CROSS ENERGY » COMMUNITY » YOU!

VOLUME 30 | ISSUE 2 | SPRING/SUMMER 2015

HOLY CROSS ENERGYP.O. BOX 2150GLENWOOD SPRINGS, CO 81602(970) 945-5491 • FAX (970) 947-5455

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Barefoot in Basalt: Guinness Book of World Records Attempt

It’s not always “all work and no play” for the Holy Cross Energy Board of Directors. Below, several Directors are putting their best foot forward to help the Town of Basalt establish a Guinness world record. The goal: Create the largest painting made entirely with footprints. The “Great Reveal” happens at 10:00 AM on Saturday, May 30, 2015, on the Willits soccer/rugby field. You’re invited to join in all the fun!

HCE staff celebrating March birthdays.

COMMUNITY CORNER

THE 76TH ANNUAL MEETING OF MEMBERS OF HOLY CROSS

ENERGY WILL BE HELD AT 6:30 PM ON THURSDAY, JUNE 4, 2015, AT

THE EAGLE VALLEY HIGH SCHOOL, LOCATED AT 641 VALLEY ROAD,

GYPSUM, COLORADO, TO CONSIDER AND ACT UPON:

• Minutes of the 2014 Annual Meeting of Members

• Reports of Officers, Directors and Staff

• Election of three Directors for three-year terms

• Such other business as may properly come before the meeting or any adjournment thereof

This event is for Holy Cross Energy Members, their families and guests. Booths showcasing our energy efficiency outreach and Round-Up Foundation programs will be set up. Supervised activities for kids will take place during the Business Meeting. A prize drawing, for Members only, will take place immediately following the Business Meeting. There will be some wonderful prizes available – don’t miss out by leaving early.

ANNUAL MEETING NOTICE

FINANCIAL INFORMATION

OPERATING STATISTICS

ASSETS:12/31/2013 12/31/2014

Total Utility Plant $378,912,083 $386,753,477

Less: Reserve for Depreciation 103,490,190 112,436,481

Net Utility Plant $275,421,893 $274,316,996

Investments in Assoc. Organizations

Patronage Capital $3,342,475 $3,672,112


Other 3,138,117 3,118,286

Investments in Subsidiary Companies 101,936 1,936

Cash in Bank 9,173,653 6,235,857

Temporary Cash Investments 2,072 2,072

Notes and Accts. Receivable Net 11,126,541 10,394,141

Materials & Supplies 4,072,273 3,747,492

Non Utility Property – Net 898,672 1,348,999

Deferred Debits 720,886 615,416

Other Assets 1,891,557 1,846,527

TOTAL ASSETS $309,890,075 $305,299,834

LIABILITIES:Long-Term Debt RUS

Long-Term Debt FFB $34,079,101 $33,356,961

Long-Term Debt CFC 130,590,647 126,898,305

Long-Term Debt - Unapplied

Total Long-Term Debt $164,669,748 $160,255,266


Other Margins & Equities 36,420,803 38,320,327

Accounts & Notes Payable 8,897,716 9,310,223

Consumer Deposits 901,780 700,030

Deferred Credits 18,779,440 16,969,384

Other Current Liabilities 9,028,496 9,361,619

TOTAL LIABILITIES $309,890,075 $305,299,834

STATEMENT OF OPERATIONSYear Ending December 31, 2014

Operating Revenues:

Residential Sales $65,329,579

Commercial Sales 52,300,098

Public Lighting 163,239

Other Electric Revenue 2,508,677

Total Operating Revenue $120,301,593

Operating Expenses:

Power Production Expense $ 9,996,811

Cost of Purchased Power 54,139,770

Transmission Expense 1,373,041

Distribution Expense Operations 10,171,266

Distribution Expense Maintenance 3,296,875

Consumer Accounts Expense 4,146,054

Consumer Service/Information/Sales Expense 2,531,859

Administrative & General Expense 9,545,120

Depreciation Expense 10,170,766

Interest on Long-Term Debt 8,358,678

Interest Expense Other 21,207

Other Deductions 0

Total Operating Expenses $113,751,447

Net Margin from Operations $6,550,146

Other Margins:

Interest Income $129,408

Income From Equity Investments 50,000

Other 693,345

TOTAL MARGIN FOR YEAR 2014 $7,422,899

1942 1950 1960 1970 1980 1990 2000 2010 2012 2013 2014

Revenue per kWh sold ($) .0855 .0476 .0354 .0256 .0423 .0657 .0640 .0845 .0946 .0950 .0998

Cost of purchased power ($) (1) .0011 .0024 .0076 .7597 10.310 29.350 27.919 61.862 64.278 68.710 72.734

Cost per kWh purchased ($) .0130 .0115 .0075 .011 .0312 .0438 .0302 .0520 .0534 .0543 .0589

Power as a % of revenue 20% 31% 26% 42% 76% 70% 48% 59% 57% 57% 60%

Number of employees 3 9 14 39 82 117 154 158 153 154 157

(1) Value denoted in millions of dollars

COMPARATIVE BALANCE SHEET

The Participation EffectCOST: About $6.00/yearBENEFIT: Happy people!WHO: HCE MembersWHY: Because it’s fun!

When you and your fellow HCE Members enroll in the Round-Up Foundation program, you help open the doors to funding opportunities for a variety of worthwhile projects benefiting individuals and organizations. Please visit www.holycross.com\roundup-registrationto get on board.

Doors for registration open at 4:45 PM

A catered dinner will be served from 5:00 – 6:15 PM








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COMMUNITY CORNER













ASSETS:12/31/2013 12/31/2014







Other 3,138,117 3,118,286


Cash in Bank 9,173,653 6,235,857






Other Assets 1,891,557 1,846,527

TOTAL ASSETS $309,890,075 $305,299,834














Operating Revenues:






Operating Expenses:












Other Deductions 0



Other Margins:



Other 693,345


1942 1950 1960 1970 1980 1990 2000 2010 2012 2013 2014



















Share It !













COMMUNITY CORNER













ASSETS:12/31/2013 12/31/2014







Other 3,138,117 3,118,286


Cash in Bank 9,173,653 6,235,857






Other Assets 1,891,557 1,846,527

TOTAL ASSETS $309,890,075 $305,299,834














Operating Revenues:






Operating Expenses:












Other Deductions 0



Other Margins:



Other 693,345


1942 1950 1960 1970 1980 1990 2000 2010 2012 2013 2014












The 2014 financial operating results for Holy Cross Energy were an operating margin of $6,550,146 and total margins of $7,422,899. Total operating revenue for the year was $120,301,593. There was no increase in base electric rates again in 2014. Energy sales decreased slightly from 2013, by 2.6%, mainly attributable to very mild weather. Also, Holy Cross’s energy efficiency program is beginning to have some impact in reducing energy consumption. The pattern of minimal new consumer growth continued in 2014, with only .2% consumer growth for the year.

Holy Cross exceeded all required financial and operating ratios. Net plant additions for 2014 totaled $3,371,000. Additions for the year consisted of: distribution plant – $2,249,000, general plant – $840,000, headquarters plant – $145,000, and Comanche 3 generation facility – $137,000.

Holy Cross made cash refunds of member equity during the year of $7,020,000. Through December 2014, Holy Cross has retired $129,384,000 to its Member/owners.

The Board of Directors, Management, and Staff of Holy Cross Energy have a strong commitment to maintaining the financial strength and integrity of Holy Cross while balancing competitive rates, environmental awareness and continuing a high level of reliability. To help achieve these objectives, Holy Cross prepares a Financial Work Plan each year which is a detailed blueprint of projected energy sales, revenues, cost of power, operating costs and projected plant expansion. To look further into the future, a Twenty-Year Long Range Financial Forecast is also prepared and updated annually.

For those who watched the 1996 movie “Jerry Maguire,” the character, played by Cuba Gooding Jr., made famous the saying, “Show me the money!”

Once again, Holy Cross Energy is showing its Members the “money,” with our recent member equity distribution.

This allocation and distribution returns more than $2.2 million to over 43,250 Members who purchased electricity from Holy Cross in 2014. Since 1963, we’ve returned nearly $131.5 million in “money” to our Members – now that’s something to get jazzed about.

If you’ve not received your “2014 Member Equity Allocation Notice and Refund” letter, or have questions, please give us a call at (970) 945-5491.

SCHEDULE OF EVENTS

4:45 PM Doors Open for Registration

5:00 – 6:15 PM Catered Buffet Dinner

6:30 PM Business Meeting

7:40 PM Prize Drawing

THURSDAY – JUNE 4, 2015

Eagle Valley High School

641 Valley Road, Gypsum, Colorado

Holy Cross Energy had a solid financial performance in 2014. There was a 2.6% drop in energy sales from 2013 due to very mild temperatures, energy efficiency efforts by our Members, Holy Cross’s WE CARE program, and local partner organizations such as CORE, EVAS, CLEER and Energy Smart. These efficiency efforts not only help the

environment, they contribute to a reduction in the total electric bill for those participating.

As we look at efforts in 2015, Holy Cross will be deploying an Enhanced Metering System (EMS). This system will bring many advantages to the Member as well as to Holy Cross (which also benefit the Member).

The EMS will provide hourly usage information. This insight to when your electrical usage occurs can be used as a tool to assist in making smart energy choices. The EMS meter will also provide immediate outage information back to our Operations Center automatically; the Member will no longer need to make a phone call in the event of an outage, resulting in improved outage response time and minimized actual outage time. Holy Cross will no longer require a monthly visit to the Member’s property by a

meter reader, reducing ingress and egress complications. Remote disconnect/reconnect is also possible on many of the meters, again reducing labor and transportation. Since usage information will be sent electronically to our billing system, manual reading errors will be eliminated. The system supports a Pre-Pay option for Members who choose to budget their energy expenses differently than the usual monthly bill. Eventually, the system will allow for more rate options to our Members, including real time pricing and potentially expanded time of use rates that better fit Member usage patterns and can be used to minimize system demand (voltage conservation scheme) by providing real time voltage feedback to our Operations Center. Finally, the EMS will provide a replacement to our existing remote meter reading system which has been discontinued and is no longer supported by the manufacturer.

On another note, Holy Cross completed a consumer satisfaction survey during the fall of 2014. You may have been one of the consumers that rated Holy Cross quite well in overall satisfaction, as well as in many other service related areas. You can find this survey on Holy Cross’s web page, www.holycross.com, under the Member Resources tab.

The Holy Cross Energy Board of Directors, Management, and employees are continually striving to improve technology, processes, customer service, and service reliability to better serve you.

I hope to see you at our Annual Meeting at the Eagle Valley High School in Gypsum.

It has been another successful year for Holy Cross Energy. The Board continues to work together doing our best to represent the views and opinions of our diverse and valuable Members. One of the Board’s largest undertakings has been establishing and implementing our strategic planning process. Through the year, the Board and

Management refine the company’s plans as we receive new information from our Members, Staff, industry and legislation to ensure we are on the right path. The Board and CEO held our strategic retreat in September which was preceded by months of advance work by the Board and information from the Staff. The 2015 Strategic Plan Summary is available on our website, www.holycross.com/strategic-plan, and we continue along the same path as prior years, with some adjustments. In addition to our company mission, vision and values, the Board continues to focus on four primary areas for Holy Cross Energy: 1) Providing our Members with the best possible service; 2) Attracting, retaining and maintaining our exceptional workforce; 3) Utilizing sound business and financial practices; and 4) Sound environmental practices.

As for the first objective: providing our Members with the best possible service, the past 12 months Holy Cross Energy

has provided system-reliability of 99.98%. This equates to the average consumer going without power for 90 minutes during the last 12 months. This is an impressive figure and Holy Cross is proud of this accomplishment. In addition to our reliability, Holy Cross has also made significant investments in technology to improve communication and electricity delivery for the entire service territory. As for the second goal: attracting, retaining and maintaining our exceptional workforce, our employees continue to be the backbone of the company and the communities we serve. The Board is very proud of our employee’s dedication and commitment to our communities. During the past year, the employees and Board formalized a new volunteer policy to assist in providing more opportunities for Holy Cross employees and the community to work together. The third objective: utilizing sound business and financial practices, Holy Cross returned more than $6.6 million in equity to our Members for the year. Returning member equity has always been an important goal of the Holy Cross Board and last year was no different. Also, even with the equity returns, we maintained some of the lowest electric rates among all utility providers within Colorado. Finally, as the fourth objective: sound environmental practices, Holy Cross Energy continues to set and meet challenging goals for our state and industry. After meeting our goal of 20% renewable energy prior to our 2015 goal, the organization is working toward our new target of 30% by the year 2020.

The Board values and appreciates the responsibility the Members entrusted with our team. Thank you for your confidence and we hope to see you in Gypsum for the 2015 Annual Meeting.

Over the past six years it’s been an honor to serve on the Holy Cross Board of Directors to provide dependable, environmentally friendly, low cost power to our Members. I’ve been lucky enough to live in the Eagle Valley since 1997, and as Environmental Policy Planner for Eagle County, WECMRD soccer coach, president of the Hardscrabble Trails Coalition, husband and dad, I’m able to bring a pragmatic progressive viewpoint representative of local working families

to the Board. As we develop our diversified energy portfolio to meet our renewable energy goals, strategic energy efficiency plan to help homeowners and businesses save money, innovative low income programs that help local families in need keep the lights on, and expanded dialogue to hear from our Members, I look forward to continuing to represent your interests while serving on the Board of Directors for Holy Cross Energy.

As a Holy Cross Energy Director for the past three years, Kristen is proud to have been involved in supporting an already exceptional, industry-leading organization, and contributing to developing Holy Cross Energy’s Strategic Plan, Communications Plan, and new renewable energy projects. She has helped advance external partnerships with Member communities, and supported efficiency and solar rebates and grants through the WE CARE program. As environmental manager for The Town of Vail and a manager of the town’s $4 million energy efficiency overhaul, Kristen has worked to ensure that taxpayer dollars are spent responsibly, with maximum return on investment. She has brought the same business-like approach to our already well managed, industry leading utility by planning for future energy source diversity and carbon policy.

Kristen’s fifteen years’ experience in energy management includes policy development, commercial efficiency projects, community energy

demand reduction, residential audits and retrofits, and efficient building. She has a passion for problem solving and creative solutions to decrease energy demand, and has been involved in community-scale biomass project feasibility. Kristen is uniquely positioned to understand the views of diverse stakeholders in complex decisions, and as an incumbent Director intends to continue to:

• Ensure long term price stability and responsible fiscal management

• Support programs to meet HCE’s 30% renewable energy by 2020 goal

• Bridge the gap between HCE Members and their electric co-op, its existing programs, and their energy bills

• Ensure HCE continues to lead the industry in progressive programs while maintaining one of the lowest electric rates in the state

As a Member-owned electric utility, I believe Holy Cross Energy should provide consumers with highly reliable electric service at a reasonable cost, balanced with energy conservation, efficiency, renewable energy and consumer service programs.

I am a life-long resident of this region of Colorado. I attended school in Carbondale, Glenwood Springs and graduated from Colorado State University. I raised my children here and spent most of my working career employed by Holy Cross. I was involved with non-profit and community organizations in both the Eagle River and Roaring Fork valleys. I have lived in Pitkin County, splitting my time between Basalt and Aspen, for the last twelve years. I am familiar with all the communities in Holy Cross’s service territory.

Over the last three years, Holy Cross has kept electric rates among the lowest in the State of Colorado, reached our goal of receiving 20% of our power supply needs from renewable generation, increased our Member communication efforts and maintained a high level of electric system reliability. We have a staff of experienced, skilled and dedicated employees who make things happen for the benefit of our Members.

I will continue to dedicate my energy, education, experience, knowledge and understanding of Holy Cross’s consumers and service territory, along with my commitment to provide reliable electric service at a reasonable cost as clean and green as possible, to keep Holy Cross Energy the leading Member-owned electric utility it is today.

2014 FINANCIAL REPORT

“SHOW ME THE MONEY”

CHIEF EXECUTIVE OFFICER’S REPORT

PRESIDENT’S REPORT

INCUMBENT DIRECTOR PROFILESAdam L. Palmer – NORTHERN DISTRICT (Since 2009)

Kristen N. Bertuglia – NORTHERN DISTRICT (Since 2012)

Robert H. Gardner – SOUTHERN DISTRICT (Since 2012)

76TH ANNUAL MEETING OF MEMBERS

MEAL, PRE-REGISTRATION & SPECIAL ARRANGEMENTS

RSVP OPTIONS To make your meal reservation, pre-register or notify us of special arrangements (hearing, visual or physical impairment concerns), we would appreciate your RSVP via one of two options:

By Phone: Call (970) 947-5511 or (970) 947-5512. We accept collect calls if it’s long distance.

Online: Visit www.holycross.com/76th-meeting.

Please submit your RSVP by 4:30 PM on Monday, June 1, 2015.

DEL WORLEYChief Executive Officer

MICHAEL A. GLASSPresident – Board of Directors

TIM CHARLTON, Chief Financial Officer









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FINANCIAL INFORMATION - Holy Cross · 2014 Financial Information ... 2015, on the Willits soccer/rugby field. You’re ... foot forward to help the Town of Basalt establish a Guinness