2017 Financial Report

The 2017 financial reports are presented on a consolidated basis for Plumas-Sierra Rural Electric Cooperative and its subsidiary, Plumas-Sierra Telecommunications.

The consolidated statement of operations provides an overview of the income and expenses for 2017 and 2016.

Our primary goal is to keep rates as flat as possible over time. We worked very hard during the drought that just ended to protect our member-owners from the higher costs associated with the drought. This meant we were cutting our margins as low as possible.

Our lenders wanted us to build up our financial strength. The cooperative has the ability to carry under-budget power costs into the following year. At the end of 2017, your board of directors approved a recommendation to carry $600,000 from 2017 into 2018. This allowed us to avoid a rate increase in 2018.

In the 2017 treasurer’s report, we discussed our plans to restructure our rates to match the cost of service. This means in the long run, on a yet-to-be determined schedule, we will be reducing the kilowatt- hour charges on your bills in the years to come, while increasing the fixed and/or demand-based charges for service.

If you are considering heating and cooling technologies, or whether to invest in renewable energy, please talk to us to be sure you are making an informed decision.

Plumas-Sierra Telecommunications posted a loss in 2017. There was a modest operational loss in our telecommunications subsidiary due to the rapid expansion of our system.

We saw a significant financial improvement compared to 2016, although that doesn’t show up in the final numbers for 2017. There was a federal tax bill signed into law that affected our loss-carry forward accounts that are associated with the federal grant we received. This required us to take a write-off for PST for $630,000. This is a non-operational paper adjustment.

PST is off to a great start for 2018, and looks to be a net cash generator in the years ahead.

Finally, we are pleased to report our external auditors, Aldrich, have concluded that the consolidated financial statements present fairly, in all material respects, the financial position of the cooperative and its subsidiary.

Sincerely,

David Hansen
Secretary/Treasurer

Consolidated Balance Sheet

December 31, 2017 and 2016

	2017	2016
ASSETS
Electric Plant:
Plant in service	$105,981,578	$105,020,766
Construction work in progress	6,799,116	5,386,100
	112,780,694	110,406,866
Provision for accumulated depreciation	(43,707,843)	(41,778,492)
Electric plant, net	69,072,851	68,628,374
Other assets and investments:
Non-utility property	25,880,773	23,521,747
Non-utility construction in progress	861,704	1,810,176
Provision for accumulated depreciation	(6,239,713)	(4,765,007)
Investments in associated organizations	6,894,375	6,900,265
NCPA reserve fund	1,324,250	1,239,384
Deferred income taxes	1,684,200	2,314,200
Total other assets and investments	30,405,589	31,020,765
Current assets:
Cash and cash equivalents	858,832	605,608
Restricted cash	1,931,355	1,920,738
Temporary investments	600,791	325,267
Accounts receivable, less provision for doubtful accounts of $106,032 ($183,130 in 2016)	3,099,046	2,986,437
Materials and supplies	1,772,796	1,603,527
Prepayments	284,574	190,166
Taxes receivable	631	–
Total current assets	8,548,025	7,631,743
Deferred charges	1,921,409	2,314,152
Total Assets	$109,947,874	$109,595,034
EQUITIES AND LIABILITIES
Equities and margins:
Memberships	$33,665	$33,715
Patronage capital	35,259,543	33,411,898
Donated capital	27,197	27,197
Accumulated comprehensive loss	(748,100)	(802,800)
Total equities and margins	34,572,305	32,670,010
Long-term debt:
Long-term debt	43,534,171	45,664,467
Capital lease obligations	74,112	–
Total long-term debt	43,608,283	45,664,467
Current liabilities:
Lines of credit	5,004,000	5,266,000
Current maturities of long-term debt	3,549,283	3,439,672
Current maturities of capital leases	58,025	–
Accounts payable, trade	346,273	479,703
Taxes payable	–	13,369
Consumer deposits	198,783	190,915
Unearned revenue	946,288	301,292
Accrued expenses	4,000,560	3,624,204
Total current liabilities	14,103,212	13,315,155
Other liabilities:
Consumer advances for construction	1,214,150	1,113,630
Deferred credits	4,325,018	4,049,725
Revenue deferral plan	588,773	313,773
Deferred grant revenue	11,536,133	12,468,274
Total other liabilities	17,664,074	17,945,402
Total Equities and Liabilities	$109,947,874	$109,595,034

Consolidated Statement of Operations

Years ended December 31, 2017 and 2016

	2017	2016
Operating revenues	$25,691,941	$26,177,019
Operating expenses
Cost of power	10,597,851	11,597,342
Transmission	605,940	577,778
Distribution-operation & maintenance	3,458,959	3,342,960
Consumer accounts	943,496	923,054
Customer service and information	334,576	306,553
Administrative and general	2,104,867	1,985,634
Total operating expenses	18,045,689	18,733,321
Depreciation and amortization	2,614,298	2,534,380
Property taxes	560,642	564,628
Interest expense	1,789,399	1,873,990
Other deductions	78,783	72,198
Total Cost of Electric Service	23,088,811	23,778,517
Operating Margins	2,603,130	2,398,502
Non-operating margins—Interest	528,807	427,863
Non-operating margins—Other	(83,558)	(47,784)
Income (Loss) from Telecommunications operations	(803,096)	(397,335)
Other Capital Credits and Patronage Dividends	78,020	92,300
Net Margin	$2,323,303	$2,473,546