coloradocountrylife.coop 4 MAY 2016 7

MOUNTAIN VIEW ELECTRIC ASSOCIATION

ICEO’s Report to the MembersBY JIM HERRON || CHIEF EXECUTIVE OFFICER || HERRONJC@MVEA.ORG

I am extremely excited about the upcoming Mountain View Electric Association 75th Annual Meeting on June 2, 2016, at the Falcon High School in Falcon. Registration and dinner begins at 5 p.m. with the business meeting starting at 7 p.m. Please consider this a personal invitation to attend. The annual meeting is at the heart of the association principles and presents an opportunity for you, the member-owners of MVEA, to provide direct input and have involvement with the board and management concerning your association. The annual meeting also provides members information about issues that may have an impact on the association and future electricity sources.

Since it is our 75th anniversary, we are planning a special meeting unlike any other MVEA Annual Meeting in the past. Though we will still have the ever favorite bucket truck rides, we added several exciting activities for the entire family: hot air balloon tethered rides (weather permitting), safety demonstrations and a kids energy zone, just to name a few. Don’t miss this fun opportunity to be more involved in your electric association and exercise your rights as a member of MVEA. I look forward to seeing you there.

The purpose of this Annual Report is to update our members on the state of your association. Please take the time to review this report and to contact one of our offices if you have any questions.

The kilowatt-hour sales for 2015 was 794,718,963, reflecting a 5.25 percent increase of 39,639,258 kWh. The peak demand of 157,050 kilowatts was 1,850 kW higher than the previous year. Annual revenue from electric sales was $97,993,702, a 5.19 percent increase over the year before. The year ended with a margin of $9,101,457. The association met all of the financial obligations set forth in its mortgage, and MVEA continues to maintain a strong financial position to meet the future needs of our membership.

We took advantage of 2015’s lower interest rates by refinancing $31 million of the Rural Utilities Service loans that were at 4.23 percent. We refinanced with a blended interest rate of 2.78 percent, resulting in a significant savings over the life of the loans.

We continued to experience modest growth of new services throughout our service area. During 2015 we added 1,220 meters,

resulting in a 2.4 percent increase, and ended the year serving 51,874 meters. We are continuing to experience an increase in the activity for housing unit developments in El Paso County. Electric

infrastructure for 15 subdivisions was underway during the year to accommodate this growth. We anticipate a surge in meter growth in the next few years that will exceed historical numbers.

The annual net utility plant increased by $413,761, which is a 0.2 percent increase. We completed the sale of transmission and substation assets that operated at 115,000 volts to Tri-State Generation and Transmission, MVEA’s power supplier. This sale has been planned

for several years to transfer the responsibility and maintenance of these assets to Tri-State. The sale resulted in a net decrease of over $9 million to the MVEA balance sheet. We added over $9 million in net utility plant during the year to build new additions and improvements. The long-term debt decreased by $143,587 during the year.

We continue to focus on improving the quality and reliability of service by adding substation exit circuits and tie lines to allow for an alternate electricity source to an area from another feeder or substation to improve service and potentially reduce outage time. To ensure and improve the integrity of the association’s distribution system, MVEA, in cooperation with Tri-State, added a third substation transformer and three new exit circuits to the Anderson substation, which serves the Monument area. We are also continuing to make improvements by using the Novinium crews to inject an insulating fluid into aging underground cables. We injected and replaced approximately 16.5 miles of underground in 2015 in the Russellville subdivision area. This procedure will extend the life of the existing cable at a considerable savings compared to overall cable replacement. We rebuilt over 48 miles of the aging overhead copperweld lines in the eastern part of our system. We were also involved in several large-scale road projects with El Paso County. In addition to building plant, we dedicated resources to the annually scheduled plant maintenance, which includes line patrol, line repair, tree trimming and pole inspection.

Years of Service

5 p.m. - 7 p.m. / J

une 2, 2016

MVEA Annual Meeting Starts at 7:00 p.m.

Kids Zone

LIVE Music

Bucket Truck

RidesTouchstone Energy

Tethered Hot Air

Balloon Rides

Live Appearance By Power

Bouncy House

Balloon Artist

BBQ DinnerFREE

Members can win over $2,000 in cash prizes!

Door PrizesFace Painting

You are cordially invited to join your electric cooperative at the Mountain View Electric Association, Inc. 75th Annual Meeting of Members.

75th Annual Meeting of Members

Thursday, June 2, 2016 5 p.m. - 9 p.m. Falcon High School • 10255 Lambert Rd • Falcon, CO 80831

5 p.m. - Registration, Dinner & Entertainment7 p.m. - Business Meeting, Election of Board of Directors & Door Prizes

[continued on page 8]

Jim Herron

coloradocountrylife.coop8 MAY 2016

MOUNTAIN VIEW ELECTRIC ASSOCIATION

During 2015, we continued the process of conducting a geographical information system inventory and survey of our entire distribution system. Global Positioning System technology allows us to record the coordinates of each item of infrastructure. Crews are working hard to identify and photograph each piece of equipment to create a mapping database, which will improve service and reliability to our membership. As of December 31, 2015, we completed 43 percent of our system.

In closing, I want to recognize the employees of the association. Our employees strive to provide exceptional service to our member-owners and to meet the physical demands of the job, no matter the extreme weather conditions or other limiting circumstances. It is their dedication to customer satisfaction and their professionalism that helps ensure the success and stability of your association.

Annual Meeting of Members75th

Falcon High SchoolJune 2, 2016

Notice of 2016Annual Meeting

A meeting of the membership will be held annually for the purpose of electing Directors, passing upon reports covering the previous fiscal year and transacting such other business identified in this notice of meeting. The Mountain View Electric Association’s 2016 Annual Meeting of Members will be held at Falcon High School, 10255 Lambert Road, Falcon, CO 80831 on Thursday, June 2, 2016, commencing at 7 p.m.

MMountain View Electric Association, Inc. (MVEA) is governed by a board of directors elected by its members. The board establishes MVEA’s policies and monitors the financial position and the management of the cooperative to ensure that its plans and programs are in keeping with accepted standards of sound business practices. In these matters and other business of the organization, each director represents the interests of the membership.

MVEA Board of Directors and District Map

Joseph D. Martin Jr. PresidentDistrict 1

B.D. “Bud” PaddockVice PresidentDistrict 5

Milton L. MathisSecretary/TreasurerDistrict 4

Donna J. Andersen-Van NessAssistant SecretaryDistrict 7

Rick L. GordonDistrict 2

Errol HertnekyDistrict 3

Barry R. SpringerDistrict 6

MVEA District Map

See MVEA district map

below to locate where

each district and its

corresponding board

director are located.

[continued from page 7]

CEO’s Report to the Members

coloradocountrylife.coop 4 MAY 2016 9

MOUNTAIN VIEW ELECTRIC ASSOCIATION

TPresident’s Report — 2016 Annual Meeting — June 2, 2016This year Mountain View Electric Association is preparing for its 75th Annual Meeting, which will be held at Falcon High School in Falcon on Thursday, June 2, 2016. The meeting registration, dinner and entertainment will commence at 5 p.m. The business meeting will begin at 7 p.m.

Seventy-five years is an extraordinary benchmark for MVEA and we have many special activities planned as we celebrate our 75th Annual Meeting. We look forward to having you join us on this remarkable occasion.

I want to share with you some highlights from 2015:At the October board meeting, the board of directors voted to

refund capital credits in the amount of just under $4 million for the years 1999 and a portion of 2000 and 2013. The board continues to use the broadened policy and blend FIFO (first-in, first-out) on a 15-year rotation with LIFO (last-in, first-out) for capital credits. For the FIFO retirement, 80 percent is from 1999 and 2000 while for the LIFO retirement, 20 percent is from 2013. Nearly twice as many members receive refund checks with this blended formula. If you were a member in 1999 and/or 2000 and 2013, you should have received a check in December. The minimum check amount was $10. Any amounts under $10 will be held in the member’s name and added to a future refund.

We started 2015 with no rate increase; however, in July we did have an increase for four different rate classes: municipal water pumping, irrigation, large power and outdoor lighting. The rate increase ranged from 3.2 to 6.7 percent. There continues to be a lot of upward pressure on rates, and I will be addressing rates for 2016 at the Annual Meeting. Additionally, I can tell you that Tri-State Generation and Transmission, our power supplier, did have a rate design change that went into effect on January 1, 2016. The overall rate design change resulted in about a 6 percent increase to the cost of our purchased power. It is a fine line the board must walk between keeping the rates as low as possible and still maintaining a financially sound cooperative.

Operation Round Up continues to be a strong program in help-ing our members. Round Up is a voluntary contribution program

where your bill is rounded up to the nearest dollar, and that money goes into a fund that is distributed to those MVEA members who need a little assistance. The most it costs any one member is $11.88 per year (12 times 99 cents). Fifty-seven percent of our mem-bers participate in Operation Round Up. Since its inception in 1999, the Round Up board has collected over $2.5 million while distributing over $2.0 million in grants to our members and area nonprofit organizations. It goes to show that small change each month can add up to a significant number, thanks to all of our members who participate in the Round Up program. If you want more information on Opera-tion Round Up, please visit our website at www.mvea.coop.

MVEA continues to be in a strong financial position. Once again, the co-op received a “clean” financial audit from the auditing firm of Clifton Larsen & Allen, LLP. It also met or exceeded mortgage requirements from the Rural Utilities Service and National Rural Utilities Cooperative Finance Corporation, MVEA’s two lenders. All this was accomplished while retiring $3.9 million in capital credits. The MVEA management team and employees worked extremely hard to accomplish this success and they continue to do a great job. On behalf of the board of directors, I want to thank all of the employees of MVEA for their hard work and dedication to your cooperative and its members. We feel extremely fortunate to have quality employees to serve you.

Also at this year’s Annual Meeting, we are bringing back the pop-ular polling questions for the members in our audience to answer. This gives us instant feedback from the membership in attendance, so please come to the Annual Meeting and share your ideas and opinions. We are excited to celebrate our 75th anniversary and hope that each and every one of you will be able to attend our An-nual Meeting on June 2, 2016, at Falcon High School.

Joe MartinPresident

2016 National Electrical Safety Month Poster Contest Winners! Congratulations to Mr. Jason Heidel’s 4th Grade Class at Cherry Valley Elementary! One of your classmates was selected as the overall winner. Get ready for a pizza party!

Six additional winning posters from schools throughout our territory will receive a pizza party and be featured on our website in May to help promote National Electrical Safety Month. Visit www.mvea.coop to learn how YOU can be safe around electricity!

MOUNTAIN VIEW ELECTRIC ASSOCIATION

2015 FINANCIAL REPORTSTATEMENT OF OPERATIONS 2015 (unaudited) 2014 2013 2012 2011Electric Revenue & Patronage Capital $98,715,337 $94,167,212 $94,426,101 $90,161,538 $85,503,735Less Operating Deductions of: Cost of Purchased Power $60,370,969 $58,310,080 $57,441,629 $56,430,045 $54,017,575 Operating Expenses $19,047,437 $19,331,688 $17,458,048 $17,272,588 $16,636,040 Depreciation Expense $7,087,382 $7,080,896 $6,956,121 $6,700,587 $6,587,001 Interest & Other Expenses $6,809,272 $6,901,002 $6,917,331 $6,965,285 $7,021,913Electric Operating Margins $5,400,277 $2,543,546 $5,652,972 $2,793,033 $1,241,206Nonelectric Operating Margins and G&T Capital Credit Allocation $3,701,180 $4,532,398 $5,176,006 $3,691,022 $4,493,595TOTAL MARGINS $9,101,457 $7,075,944 $10,828,978 $6,484,055 $5,734,801

Balance Sheet as of December 31, 2015ASSETS 2015 (unaudited) 2014Net Utility Plant $208,984,288 $208,570,527Investments in Associated Organizations $63,506,149 $60,867,130Cash & Temporary Investments $5,058,499 $4,616,752Notes & Accounts Receivable $11,672,216 $11,912,183Inventory & Supplies $2,525,400 $3,211,662Other Current & Accrued Assets $272,790 $694,490Deferred Debits $4,103,699 $4,672,084TOTAL ASSETS $296,123,041 $294,544,828

Balance Sheet as of December 31, 2015LIABILITIES 2015 (unaudited) 2014Patronage Capital $112,182,898 $107,552,472Long-Term Debt $161,624,809 $161,768,396Accumulated Operating Provisions $1,611,295 $1,565,291Notes & Accounts Payable $7,241,772 $11,369,181Consumer Deposits $2,477,005 $2,128,755Other Current & Accrued Liabilities $7,292,403 $6,563,638Deferred Credits $3,692,859 $3,597,095TOTAL LIABILITIES $296,123,041 $294,544,828

COUNTIES SERVED: Arapahoe, Crowley, Douglas, Elbert, El Paso, Lincoln, Pueblo and Washington

YEAR ORGANIZED: 1941

POWER SOURCE: Tri-State Generationand Transmission

NUMBER OF EMPLOYEES: 140

NUMBER OF SERVICES: 51,874

MILES OF ENERGIZED LINE: 6,002

CONSUMERS PER MILE: 8.64

SERVICE TERRITORY: 5,000 square miles

CO-OP FACTS

Summary of Operating CostsPurchased Power $60,370,969 65%Operating Expenses $19,047,437 20%Depreciation Expense $7,087,382 8%Interest & Other Expenses $6,809,272 7% $93,315,060 100%

Summary of Revenue SourcesResidential $68,688,765 70%Irrigation $585,761 1%Small Commercial $7,877,529 8%Large Power $14,784,991 15%Other $6,056,656 6% $97,993,702 100%

coloradocountrylife.coop10 MAY 2016

2015 SUMMARY OF OPERATING COSTSInterest and

Other Expenses 7%

Purchased Power

65%

Operating Expenses

20%

Depreciation Expense

8%

2015 SUMMARY OF REVENUE SOURCES

SmallCommercial 8%

Large Power 15%

Other6%

Residential70%Irrigation

1%