Joint Board Chair and CEO Message - 2025 Annual Report

The past year was marked by both opportunity and complexity for electric cooperatives. Rising costs across the industry, a changing energy landscape, and evolving member expectations required thoughtful decision‑making and steady leadership. Thanks to the dedication of our employees, the guidance of our Board of Directors, and the trust of our members, People’s Energy Cooperative met these challenges with focus and discipline.

As we reflect on 2025, we are proud of the Board and staff that continue our cooperative’s legacy of service. The Cooperative’s mission drives us to bring value to our member-owners and communities by safely providing reliable electricity, superior customer service, and innovative energy solutions at fair and reasonable prices. Following are examples of how we lived out our mission in 2025.

SAFETY

At People’s, the phrase ‘safety first, always’ is not just a slogan that makes us feel good, it’s a mindset and core value. We have a multi-faceted safety program designed to keep people and property safe; maintain compliance with regulatory agencies; and ensure standards are up-to-date and followed. Participation in the Rural Electric Safety Achievement Program (RESAP), training sessions, safety huddles, and drills ensure employees understand and follow industry best practices for safely performing their work.

Our goal is always to have zero injuries and no damage to property. Unfortunately, we did not meet those goals in 2025, but we are thankful the claims were few with limited costs and no one suffered major injuries. This is a testament to our safety value of recognizing risk, protecting ourselves and others, and promoting safe work practices. We thank our facilities team for consistently maintaining our buildings and grounds with exceptional care, ensuring a safe environment for employees and members as they come and go.

In early 2025, the Cooperative partnered with the Minnesota Rural Electric Association to offer Active Violence Emergency Response Training (AVERT). It empowered employees with practical strategies to protect themselves and their coworkers, while also giving the Cooperative an opportunity to evaluate potential policy, facility, and security improvements to better protect staff, our buildings, and other property.

Working safely doesn’t just mean protecting people and property, it also involves cybersecurity and protecting member and employee data, our information technology (IT) systems, and the electric grid. Our IT team does a remarkable job on this front, not only defending our systems, but also educating and training our staff and Board on how to recognize and mitigate cyber risks. Their work is essential in keeping our organization secure and resilient.

RELIABILITY

As an electric utility, our purpose, the reason we exist, is to provide reliable electric service.  Once again, our reliability metrics exceeded our goals and showed that:

• The average member experienced a total of 30.6 minutes without electricity during the year. Our goal is less than or equal to 80 minutes. For perspective, North American utilities typically average about 60-100 minutes annually.
   
• On average, members experienced a power outage 0.31 times in the year – that’s one outage every three years!  Our goal is less than or equal to 0.7 outages per member per year and nationally, utilities typically average about one outage per consumer per year.

We are grateful to our operations and engineering teams who work diligently to design, build, and maintain the system to be reliable today and long into the future as well as those who coordinate their work. We also recognize those who map and stake the routes for the poles and wires; optimize and manage our metering system; purchase and warehouse the needed materials and equipment; and maintain the trucks and equipment used to perform the work. An example of this collective work is the new substation in Plainview that went live at the end of 2025.

MEMBER ENGAGEMENT

You, the member-owners of People’s Energy Cooperative, are part of what makes our cooperative a special organization.  In 2025, attendance at our 88th Annual Meeting in March was up by 47 percent. We also experienced increased engagement on our social media platforms last year.  Members who do not normally attend cooperative events participated in Watts & Wits Trivia Nights in September.  Members had the opportunity to learn about how the electric grid has grown in size and complexity at the Energy Forums in November. We appreciate the opportunity to connect with members and talk about what’s important to you, listen to your ideas, and answer your questions.

Our member services and member relations teams work closely together to develop, offer, and promote programs, communications, services, and events to help you get the most value from your Cooperative. We thank them for the service they provide and their dedication to going above and beyond for our members.

We hope you plan to attend this year’s 89th Annual Meeting to celebrate the Cooperative’s legacy of service. You will notice that although the main event will once again be at the Rochester International Event Center, our satellite location has moved to Copperfield Terrace, just north of Plainview.  We hope you can join us!

FINANCIAL STABILITY

In an environment of industry‑wide cost pressures, we remained focused on careful planning and disciplined financial management. This approach helps protect the long‑term financial health of the Cooperative while balancing affordability for our members. Sound governance and transparency are essential to earning and maintaining your trust, and we remain committed to both. We thank our finance and accounting team for their attention to detail, disciplined approach, and commitment to accuracy and transparency.

The thoughtful and strategic decisions made by your Board of Directors ensure that the Cooperative continues to be in good financial condition as reported on pages 12-14 of the Annual Report. These sound financial decisions have compounded over the years and have enabled the Cooperative to gain revenue from sources other than energy sales, which helps reduce the amount of revenue we need to collect through rates.

For example, back in 2011, when the Cooperative purchased land in Oronoco for a new headquarters building the property included significant acreage to the east and north of where the new building would sit. This land was later developed into Oronoco Crossings and is now home to a number of local and regional businesses. We are excited to share that all but one parcel in the Oronoco Crossings development has been sold. As the figures below demonstrate, the Cooperative has achieved significant financial benefit from the purchase and sale of the land over the years.

STRATEGIC PLAN

During the first year of our current strategic plan, we placed a strong focus on succession planning and risk management in 2025. This did not just involve the Board hiring a new President and CEO. It also meant management ensuring the next generation of leaders and staff are prepared for the future. This included identifying key roles and critical tasks and ensuring we have back-up coverage to help mitigate risk and ensure continuity. We are grateful for our HR team and the managers and supervisors who invest time and effort in training, developing, and supporting the growth of our employees.

LOOKING AHEAD

2026 marks the 90th Anniversary of People’s Energy Cooperative. It is incredible to think how far we have come since the first power poles went in the ground in Olmsted County! We look forward to sharing stories from our rich history throughout the year, celebrating with you at community festivals and gatherings, and continuing to deliver on our mission.

Thank you for your continued trust, support, and engagement. We hope you are as proud to be a member of the Cooperative as we are to serve it!