2024 was a difficult year for many Ohioans. It seems like the cost of everything continues to rise. We faced a drought, followed by a cold, hard winter. But hardships are nothing new to rural America. And history has taught us that when times are hard, we are stronger working together to face our problems than when we go it alone.
When rural Americans band together to face down difficult problems, the model that has served us best over time is that of the cooperative. Cooperatives have a long and proud history of serving all Americans in different ways, but particularly those in rural America. Over generations, we’ve used the cooperative model to help us protect our farms and homes from financial disaster, we’ve improved our ability to purchase affordable goods and services for our farms, and we’ve gotten better yields on crops when taken to market. Cooperatives thrive today in industries such as mutual insurance, financial services in the form of credit unions, agricultural cooperatives for both buying and selling, and yes, utility cooperatives like South Central Power Company.
South Central Power was built by farmers during and in response to difficult times. Those founding members of our cooperative knew that by joining together, they could solve problems for themselves and their communities that would be harder and more expensive to solve on their own. And as chairman of your cooperative, I firmly believe this philosophy is just as true today as it was in the past and it will remain so in our future. As a cooperative, we are stronger because we are working together.
Even though electric prices are rising in Ohio and across the nation, we are better able to control costs together as members of a cooperative than we would if we were just customers of a large investor-owned utility. We are better able to find ways to improve reliability, and we are better able to solve the difficult problems our communities face in other ways, like the Foundation grants you as members fund through participation in Operation Round Up. And our new fiber internet network, which improves our electric grid for all members and directly provides internet service to some of you who need it the most, is another great example of the cooperative model in action.
As chairman, I am proud of what we accomplished in 2024. But I also know we have much work ahead in 2025 and in the years to come. The good news is that, as members of a cooperative, we will face these challenges together. Thank you for taking time to review our 2024 annual report, and I look forward to continuing to serve all our members.
Ken Davis
Chairman, Board of Trustees
As your Board Chairman Ken Davis noted, South Central Power Company is a cooperative, and we are proud to be owned by, and to serve, you. So what does it mean to be a member of an electric cooperative? All utilities strive to provide reliable service, and each month, you receive a bill to pay for the power that you used. But here are some hidden differences about electric cooperatives that you may not see when you flip the light switch or pay your power bill.
We operate on a cost-based model, not a profit-generating model. As a member of the South Central Power Company electric cooperative, you are not just a customer, you are the equivalent of a shareholder. Our goal isn’t to generate profit for you, but rather to maximize value. The bill you receive from us reflects the costs we incur to provide it, plus the margin we need to remain in operation as a viable enterprise. Any excess margins collected are eventually returned to members and former members of the cooperative after 20 years, which we refer to as patronage capital retirements. Due to this approach and our focus on operational excellence and efficiency, we maintain some of the lowest utility bills, on average, in Ohio.
We are owned and operated by you. We are governed by a board of trustees, composed of members elected by the membership at large during annual elections. All members each year receive information about the process of running for a board seat, as well as a ballot that allows you to cast your vote online or by mail. Results of the election are announced during our annual meeting of the membership, which all members are invited to attend.
We are local and committed to the community we share. With headquarters in Lancaster, and office locations in Barnesville and Hillsboro, we are powered 100% by and for Ohioans.
The 2024 consolidated financial statements show that the health of the cooperative is strong. The cooperative reported consolidated margins of $17.3 million, consisting of $20.4 million from electric operations and a loss of $3.1 million from connectSCP. Although electric operations saw lower-than-expected kilowatt-hour sales, this was offset by lowering controllable expenses. Our fiber internet division, connectSCP, reported a smaller loss than anticipated because we connected subscribers more quickly than expected and maintained control over expenses. For the next several years, connectSCP is expected to continue reporting negative margins, as subscriber revenues take time to offset the high startup costs and infrastructure investment. It is important to know that the cooperative considers each operation separately when adjusting or increasing rates and any electric rate increases are based on the electric division’s operation and not on connectSCP.
At South Central Power Company, we are proud to be your cooperative. This annual report demonstrates our dedication to serving you with transparency and a commitment to excellence. We hope you enjoy learning more about cooperatives and South Central Power, and we hope to see you at a future annual meeting or community member meeting if you want to learn more.
Rick Lemonds
President & CEO
“We exist to add value to your lives by delivering safe and dependable service.”
PROUD TO BE A COOPERATIVE
When you hear the word “co-op,” what comes to mind? We hope you think of your friends here at South Central Power, but maybe you think of a local farmers’ co-op or a credit union. You might be surprised to learn that co-ops, or cooperatives, can be found in many industries — and they offer a variety of services, each designed to serve their members in the best way possible. A cooperative is a not-for-profit organization owned by its members.
Co-ops make life better for everyone, from local businesses to the people who get electricity from us. But not everyone knows this story. To spread the word, the United Nations declared 2025 the International Year of Cooperatives. As we gear up to celebrate how cooperatives build a better world, we wanted to share how co-ops strengthen our community.
Here’s why we’re different
Cooperatives are united in the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility, and caring for others.
Rural electric cooperatives like South Central Power serve the smallest number of consumers out of the three utility types — investor-owned, municipal, and cooperative. Co-ops serve about 12 percent of the U.S. population, or 42 million people. There are more than 800 other electric co-ops in 48 states. While co-ops serve the fewest number of people, our electric lines cover about 56 percent of the U.S. landmass. This is because we provide power where others once refused to go because of the low population density. Electric co-ops consistently rank highest in member satisfaction among all electric utility types.
So what’s a cooperative?
Co-ops are special. We are not just a company, and you are not just a customer. We are in this together. Our members (that is you!) elect our leaders and help guide our future. It is a big community project in which everyone has a say. Our hope is that you will join us at our member meetings next spring. It is the best way to find out what is happening and get involved with your co-op.
Remember, you are not a number to us. You are a member-owner. That means we work for you, not some far-off shareholders. We are focused on what is best for our community because we live here, and many of us are members too.
Cooperation works. It keeps us connected, innovative and focused on what matters — you and our communities. So as we celebrate the International Year of Cooperatives, remember that as a member of South Central Power, you have a voice. You’re not just a customer, you are a member-owner. We’re proud to power you, and add value to your lives.
HOW IS A COOPERATIVE DIFFERENT FROM OTHER TYPES OF BUSINESSES?
Distinguishing features of a cooperative include:
Purpose: Cooperatives exist to serve their members or meet a particular need of their members — in our case, electricity. The purpose of for-profit corporations is usually to increase the wealth of the shareholders.
Identity of board members: The people who serve on the board of South Central Power come from the co-op’s membership ranks. In the case of other types of corporations, outsiders — that is, non-shareholders — are often appointed or elected to the board.
Voting rights: At co-ops, each member gets one vote. With other corporations, how many votes a shareholder gets is based on the number of shares they own or the size of their stake in the company.
Accountability: Co-ops must be accountable and serve the needs of all members. Other corporations are most accountable to the shareholders who hold the largest stake in the company.
Seven Cooperative Principles — words we live by
Along with being owned by members, another thing that sets cooperatives apart from other types of corporations is that co-ops ascribe to a set of seven internationally recognized principles.
1. Voluntary, open membership
Anyone who wants to become a member of a cooperative and use its services is welcome to do so, no matter their gender identity, race, religion, or social status. The only requirement for membership is that a person is willing to accept the responsibility of membership. To become a member of South Central Power, you must become an account holder, and have your name appear on your bill.
2. Democratic member control
Members of a co-op organize and control the group and decide who can lead the co-op. Members also vote to determine the policies and practices of the co-op.
3. Member economic participation
Every member contributes to the capital of the co-op. Members also benefit from any profits earned by the co-op. If you’ve been a member of South Central Power for 21 years or longer, you can expect to see a “capital credit” retirement in the form of a bill credit, typically in June.
4. Independence and autonomy
If a cooperative and another organization enter into an agreement, they do so under the presumption that the cooperative will maintain its democratic member control and autonomy.
5. Information, education, and training
Cooperatives educate their members so that their members can best help the co-op develop. Co-ops also work to educate the public, government officials, and others about the nature and advantages of cooperatives.
6. Cooperation between cooperatives
Co-ops strive to work together for the good of their members and the community around them.
7. Concern for community
All of the policies put forward by a co-op should reflect a concern for the community around it.
connectSCP 2024 YEAR IN REVIEW
Looking back on connectSCP’s first year in service, the numbers tell a story of progress and impact. From miles of fiber built to the number of members connected, each milestone reflects our commitment to bringing reliable, high-speed internet to rural communities.
Investing in the future
Our fiber network is designed to do more than provide high-speed internet — it’s an investment in the future of our rural communities. By expanding access to reliable internet, we’re helping to improve economic and educational opportunities while enhancing overall quality of life.
Fiber network benefits all members
Our fiber network is connecting our electric substations and field equipment, allowing us to implement smart and automated power distribution technology. These advancements will not only reduce outage times but also improve power quality, strengthen grid stability, and boost efficiency — critical improvements as energy demands continue to grow.