2020 Annual Meeting Transcript – Doug Johnson

Thank you President Joines. I appreciate your remarks and it is really good to be with you today and I want to just thank you for your participation today as members and also want to say thank you for the opportunity that I have to serve as your chief executive officer.

The annual meeting is to take a look back at the results of the prior year. But as we look back at 2019, it seems like a really long time ago, as we've been dealing with this pandemic, and all the things that this COVID-19 virus has brought our way from a business planning standpoint. Things like business continuity plans, post executive orders from the governor when they expire, we have task force working on that, employee return to work plans, when do we bring people back into our office, phased reopening of our district offices, which we're now in phase two there and allowing people to come into our showrooms by appointment.

So it's been a very difficult time as we work our way through this while we're an essential business. We're also a critical infrastructure company because we provide electricity that's so vital to our homes and businesses and the quality of life. So as we've worked through this, we've had three overarching guidelines that we've used for our cooperative. First and foremost, to lead with our heart, to be kind of generous as we help our members recover from this pandemic and the resulting economic land slide that has hurt so many people. Secondly, is to be prepared to help people for several months and to continue to ask members that are able to give a helping hand to those that have lost their jobs and their economic security. And thirdly, we need to work very safely and smartly to protect the health and safety of our employees.

So you've heard some of the results from our 2019 performance. A couple of things that I would add to that is this is a year over year performance for us, of outstanding results being achieved by our employees. We've had several years in a row where we've outpaced our stretch goals. And I think it demonstrates that employees truly are living our motto, which is nothing less than our very best. One of the things that I'm most proud of is the relationship that we enjoy with our members. We measure it relentlessly, we talk about it a lot and we've discussed, how can we provide service that delights our members and customers. We earned an ACSI, an American Consumer Satisfaction Index score in 2019, of 86.25 placing us in the top five utilities across America. The average for electric co-ops across the country is 73.

I have to tell you a little bit in 2020, our scores have actually gone up in the first few months of 2020. We are now scoring in at an 89 level while other utilities have seen their scores drop during this period of time. I'm also really proud of the reliability that our engineering and operations and line technicians and other employees provide. We're in the top quartile for keeping the lights on and providing high reliability with the electric service. And we're continuing to have outstanding safety results. All of these things are very, very important to me and I'm sure they're important to you as a member. Also just reiterate something else that Katie mentioned that I'm very proud of. It's last rate increase we had at Blue Ridge was in 2013. And we know we won't have one this year. In fact, we returned several million dollars to our members over the past few years.

So from your bills standpoint, your bills are lower than they've been, and we're real proud of that accomplishment. And we're continuing to do everything we can to, through our work smart program, to use technology and improve processes, stay lean, and provide our services to you in a way that's affordable and keeps your bill low. Subsidiaries are helping do that too. As Katie mentioned, they produced a $3.7 million benefit in 2019. And as I like to say, every dollar that we can earn at our subsidiaries is a dollar you don't have to pay as a member.

So we recently announced kind of moving into the future and thinking some about vision and strategy and things that the future, we just announced three key vision objectives in a statewide strategic initiative called Brighter Future. The three pillars of this initiative, the first is to continue to work very hard to enrich the lives of our members and the communities we serve. Secondly, is to embrace a low carbon goal, to achieve a 50% reduction in our carbon footprint by 2030 and over the 2005 levels. And a net zero carbon emissions by 2050. Third pillar is low cost, by utilizing innovative energy solutions and different ways of working with you, our members. We want to make our electric grid more flexible, more efficient, more resilient than ever before, and do those things necessary to keep the costs down and keep your bills low. In doing that, we know we need be and continue to work as your trusted energy advisor.

And I'm excited to tell you that we right in the middle, right now, of completing a study process to build an 11 megawatt utility scale solar system on the Blue Ridge solar system. And it will be called the Brighter Future solar facility. Last year, 2019, we also added our fifth community solar site. We now have almost 1900 panels at these community solar sites, subscribe to we're continuing to have great participation with our members in energy efficiency rebates, beep programs and other things that we're offering in the way of technology to help you keep your bills down our showroom offerings have been expanded and we're continuing to call our members about beneficial electrification, which means more use of electric vehicles. Our wholesale power continues to be very favorable. We gave $4 million back to our members in November and December of last year. A thing that I can say there is we're more natural gas being used, which is an all-time low price, more hydro from the rains that we've experienced, more solar. And of course, almost 50% of our power comes from the nuclear facilities that Blue Energy invested in several years ago. Would also say that we're seeing much, much less coal generation.

We also recently announced that we're beginning, that we began working on the largest capital investment project in the history of Blue Ridge. A $40 million plan to bring 230 KV line from West Jefferson to the edge of Boone. That's 17 miles of line to the Rutherwood community in Watauga County. The first half of that line has been constructed and we're now grading access roads for the next half of the line. And we'll construct the line in 2021 to Rutherwood. Of all 17 miles of 230 transmission line is $15 million, $25 million excuse me. The Rutherwood 230 KV substation, which will be finished in 2023 is 15 million. So together the two large transmission projects total 40 million. But we also moved into our new corporate office, which we're very proud of in February of 2020, but sadly the pandemic hit in mid-March and about 50% of our employees began working remotely at home. And we are, as I said, at the outset, working on, when do we think we'll be able to return our employees back to this building.

We're also studying our next generation automated metering infrastructure and meter data management systems. And you will be hearing more about this in the near future. Let me wrap up by saying a big thank you to Jeff, to all of our employees at Blue Ridge Energy that continue to deliver incredible results to our member owners and our customers. Our culture is based on strong values, hard work and a deep belief that providing great service to our members and customers is our highest priority. We have a strong commitment to our communities in a family based work environment, that honors and appreciates people. And that's why our employees continue to produce top-notch results year in and year out.

I'm proud to share with you that Blue Ridge energy just received business North Carolina Magazine's best places to work in North Carolina award for the fifth time. A big part of our success is our employees enthusiastic commitment to our purpose to make life better for our members and our customers. Thank you.