Letter from the President and Chairman of the Board

A lot has changed in the world over the last 20 years. Technology has evolved at an unprecedented pace—faster than at any other time in human history—while human behavior has shifted in ways that were once unimaginable. As a cooperative, SMECO is large enough to have an impact on our local community, but small enough to remain nimble and responsive to the changing needs of our members. Our continued investment in system infrastructure, both in the field and in the office, strikes a balance between the advantages of improved technology and the stability and financial responsibility we owe our members.

For instance, SMECO’s investment in self-service options not only enables members to do business with the cooperative on their terms and in their timeframes, but also created opportunities for SMECO to reduce operating expenses and improve customer service in our customer care center. As members gained the ability to perform key interactions on their own, engagement with the customer care center shifted, and the team noticed. This clear change meant an adjustment to customer care center staffing hours to better reflect members’ needs.

Investments in software and system-hardening hardware have strengthened reliability and position us to make deliberate, well-planned investments, rather than reactive decisions that can be costly both financially and operationally.

Costs are rising for groceries, gas, housing, consumer goods, and, yes, electricity.

Like our members, we have had to make tough choices to mitigate the impact of increased costs while maintaining our Debt Service Coverage (DSC) Ratio and appropriate liquidity. We asked the question: can it wait? If the answer was yes, we waited. The accounting team at SMECO worked with each department to reduce budgets wherever possible.

While there are some things we can’t cut, like the cost of depreciation and interest charges, the cooperative continues to seek ways to reduce spending now and moving forward. We cut or limited a significant amount of training in 2025 and forward into 2026, prioritizing training necessary to renew or maintain certifications. Training that was important but could be deferred was pushed back. It’s important for employees to stay abreast of changes in the utility industry and in their specific fields to ensure we can improve efficiency and continue to better serve our members, but we must balance that need with the financial realities we are managing. In addition, SMECO reduced spending on contracted services, passed increased healthcare costs to employees, trimmed procurement expenses, and much more.

The cooperative also applied for and was awarded grants to offset a portion of the costs for necessary capital investment in system reliability.

While the cooperative doesn’t control the cost of goods or the cost of wholesale power, we continue to reduce spending, increase efficiency, and leverage our wholesale purchasing power where possible while also maintaining a high standard of reliability for our members and ensuring continued safety for our staff and the community.