I’ve had the pleasure of serving on the ACES Board of Directors since Old Dominion Electric Cooperative (ODEC) became ACES’ fifth Member in 2001. I have witnessed ACES’ significant growth in that time – growth in services, capabilities, expertise, and knowledge. This growth has enabled ACES to become a valued and trusted partner for our Members and Customers, as well as the entire cooperative program. ACES’ Members should be proud of the Company’s success.

ACES has always been on the forefront of changes and trends in our industry and has had the foresight to identify new services our Members and Customers might need to continue to be successful in managing their risk. ACES provides excellent service quality and has outstanding employees who act as an extension of the Members’ organizations to help ensure seamless and cohesive management of their portfolios.

ACES’ Membership is diverse, as the Members operate in various markets across the country, and each has a unique portfolio. This diversity strengthens the organization by providing opportunities for Members to learn from each others’ experiences, and by expanding ACES’ knowledge and expertise. I encourage the Board to continue to seek ways to enhance that diversity in the Company’s Membership.

It has been a privilege and honor to serve as your Chairman and to be part of such a wonderful leadership team. ACES and our Members have a great future ahead. I am confident that Patrick Ledger is the right person to lead the Company into that future. The more changes, challenges, and opportunities we face in the industry, the more critical and valuable our partnerships with ACES will become.

Jack Reasor
Chairman of the Board

Many people that live in rural America depend on electric cooperatives for reliable and affordable energy. ACES continuously strives to be efficient and provide the highest quality services to our Members and Customers. Our Members and Customers strive to keep costs low for those at the end of the line, and ACES is mindful of our costs to support their effort. ACES took significant steps in 2017 to enhance our operations and the quality of service we provide, while not increasing the overall cost to provide services.

One major concern for our Members and Customers is security. ACES took several measures to improve our physical and cyber security in 2017, including creating a position to lead physical security at ACES’ facilities and ensure safety of our staff and guests during ACES meetings and events. Additionally, ACES developed and adopted a NERC Critical Infrastructure Protection (CIP) plan and implemented necessary training for staff. ACES also extended our security and CIP expertise to Members, providing compliance evaluations and training.

In response to concerns expressed by some Members related to physical transmission investment and potential unfavorable transmission cost increases, in 2017 ACES developed Transmission Strategy expertise that focuses on transmission investment including planning and engineering studies, business intelligence, economic analyses, and representation at the RTOs. This service has been well received by the Members and I expect the service to continue providing significant value in the future.

ACES also enhanced our strategic planning process in 2017. The revised process will allow us to build on past successes and drive ACES forward. We began this process by revisiting our Mission and Vision as follows:

“ACES’ Mission is to partner with our Members and Customers to provide comprehensive value-added services and successfully manage their risk.”

“ACES’ Vision is to be the trusted partner and leader in providing excellence in services across the entire spectrum of energy providers.”

The updates to our Mission and Vision better reflect our partnership with our Members and Customers, highlight our goal of becoming their trusted partner, and emphasize the broad range of services ACES provides. In essence, we want our Members and Customers to actively engage ACES in decisions involving their portfolios, as they deem appropriate, and to utilize our staff’s expertise to help develop optimal solutions. The strategic initiatives planned for 2018 are beyond our day-to-day activities, and will push ACES toward achieving our Vision.

New Service: Transmission Strategy

Transmission investment is increasing in the U.S. and the risks are changing rapidly with other aspects of the energy industry. The significant increase in new wind generation, spurred primarily by federal tax credits, has created the need for additional transmission to deliver the wind energy where it is needed. Additionally, RTOs utilize various methods to approve the construction of new transmission, as well as various methods for allocating the cost, which can have adverse financial impacts on ACES’ Members.

In 2015, some of the Members engaged ACES in discussions related to the challenges and opportunities that electric cooperatives face surrounding rising transmission costs and the potential for significant expansion of transmission. These discussions led to ACES developing expanded transmission services as a natural extension of the existing core services we provide to our Members, which we began providing in the spring of 2017. ACES provides advisory support for our Members related to transmission strategies, which includes tracking developments, gathering business intelligence, and performing analytics. There have been several success stories thus far, and ACES believes the new service has provided, and will continue to provide, significant value to our Members.

Regional Meetings

ACES held regional meetings with Members’ senior level staff to discuss topics and issues relevant to Members in each region in 2016 and 2017. These meetings help ACES identify the issues that are most important to our Members and the feedback provided at these meetings helps drive the initiatives outlined in our Strategic Plan. Key trends that came out of the meetings in 2017 were a need to improve the methods for circulating information, requests for additional market intelligence regarding resource additions and retirements, as well as information on battery storage, among other topics. ACES addressed many of these requests throughout the year, and will address others through the Strategic Planning initiatives. ACES will continue the initiative of closely working with Members to discuss relevant strategic issues and topics going forward.

Critical Infrastructure Protection Summit

Cyber security has become one of the most significant risks facing energy industry participants. Opportunities to share experiences, expertise, best practices, and lessons learned is invaluable in helping electric cooperatives mitigate their risks. Thus, ACES partnered with NRECA in 2017 to host the inaugural Critical Infrastructure Protection (CIP) Summit, which was held on May 31 at ACES’ Headquarters in Carmel, Indiana. More than 75 attendees from G&Ts across the country were in attendance. Several subject matter experts discussed cyber security issues that impact their cooperatives and shared information on CIP compliance approaches.

The meeting included presentations on existing cyber security requirements, as well as emerging trends. The conference also included a presentation by a cooperative that focused on lessons learned from a FERC-led CIP au­dit, which has a broader scope than a typical Regional Entity audit. Attendees found the event valuable and were appreciative of the opportunity to have discussions related to implementing security controls, as well as other topics.

ACES is pleased to have partnered with NRECA to provide a forum for electric cooperatives to discuss a critical topic that can significantly impact their operations. ACES plans to continue this collaboration with NRECA and hold another joint summit in 2018.

2017 Annual Members Conference

ACES hosted the 13th Annual Members Conference on June 1 and 2, 2017, at the Marriott in downtown Indianapolis. The conference was the largest to date, with approximately 500 attendees, and also had the highest overall rating. The 2017 conference followed a similar format to the 2016 conference, featuring outside industry experts that covered topics such as weather trends, energy markets, and economics. ACES staff led environmental and natural gas discussion panels. Additionally, the conference featured two one-on-one discussions. Mike Steffes, ACES’ President and CEO, and Nick Eberstadt, Henry Wendt Chair in Political Economy at the American Enterprise Institute, discussed the changing demographics of rural America. Dusky Terry, Vice President Planning and Growth Strategies at Central Iowa Power Cooperative, and Steve Collier, Director of Smart Grid Strategies at Milsoft Solutions, discussed the implications of the changing bulk power grid and emergence of a distributed energy grid. John Doggett, Senior Lecturer of the Department of Management at the Red McCombs School of Business at the University of Texas at Austin, was the keynote speaker and provided unique insight on economic and energy trends.

ACES would like to extend a special thank you to Joe Brannan, Executive Vice President and CEO of North Carolina Electric Membership Corporation, for serving as the master of ceremonies.

Promoting Employee Growth

ACES’ culture is designed to help attract and retain top talent. We strive to provide employees with opportunities for growth and development. As such, ACES started a Women’s Initiative in 2015 to provide resources for women to help them grow and develop, and to pursue leadership opportunities so they can reach their full potential.

ACES expanded this initiative in 2017 to be more inclusive and to help promote increased diversity within the organization. To support expansion of this initiative, ACES formed a team to plan networking and educational events. The team’s mission is to create opportunities for personal and professional development for employees through networking and engagement. The team’s goals are as follows:

• To create a forum for networking and sharing ideas and experiences
• Increase employee engagement and inspire growth
• Provide tools for personal and professional growth
• Educate employees on the benefits of diversity in the workforce and in leadership
• Foster an environment for respect
• Create an environment that builds skill, productivity, innovation, and creativity

The team coordinated ACES’ Third Annual Women in Energy Forum, participated on a planning committee for a collaborative Indiana Women in Energy Conference, and organized several presentations and discussions on topics such as diversity and inclusion, unconscious biases, decoding non-verbal cues in the workplace, identifying individual values, among other topics focused on accomplishing the team’s mission and goals.

Third Annual Women in Energy Forum

ACES hosted the Third Annual Women in Energy Forum on April 20, 2017. The agenda for the Forum included topics relevant to men and women. The theme was Evolving in an Ever-Changing Energy Industry. The 2017 Forum featured two keynote speakers, Joe Brannan of North Carolina Electric Membership Corporation, and Phyllis Currie, former General Manager at Pasadena Water and Power.

There was also a panel on succession planning. The panelists included Ken Holmes from NRECA, Lyndsay Barron from Big Rivers Electric Corporation, and Paula Rabb, ACES’ Executive Director of Human Resources, and the panel was moderated by Mike Steffes. The Forum also included two interactive and engaging breakout sessions. There were more than 60 attendees, including ACES employees, Members, and business partners.

ACES conducted a post-forum survey and received great feedback.

Inaugural Indiana Women IN Energy Conference

In addition to the annual Forum, in 2017, ACES co-hosted the inaugural Indiana Women IN Energy Conference on Tuesday, October 10, with five other energy-sector companies in Indiana – EDP Renewables, Duke Energy, Indianapolis Power & Light (IPL), MISO, and Parr Richey. Women from ACES and the other host companies formed a planning committee that organized the conference. The conference theme was “Embracing Diversity in Energy.”

The highlight of the conference was the keynote address from LaDoris Harris, co-founder and chairman of Jabo Industries, and former Director of the Office of Economic Impact and Diversity at the Department of Energy.

The conference drew over 200 attendees, and the feedback was overwhelmingly positive. Our guests were engaged and visibly excited to be a part of this great program. ACES extended invitations to not only employees, but also to our Indiana-based Members.

Closer Look at ACES

Video Series
ACES has developed a series of videos to better explain our services. In 2017, ACES produced videos explaining our Portfolio Modeling and Financial Transmission services, as well as a CEO video that focuses on ACES’ history and culture. Click the links below to view the videos produced in 2017. ACES, also has videos describing our Hourly Trading and Settlements Services. Click here to view all ACES videos.

ACES concluded 2017 on a positive note financially, as the Company generated net income of $259,000, which was significantly greater than the amount budgeted for the year. This achievement marked the 15th consecutive year ACES has had positive net income.

ACES’ overall financial position also continues to be strong. The Company’s total cash and investments balance was approximately $20,500,000 at year-end, which is ample to meet the Company’s current and projected future cash and liquidity requirements. Additionally, ACES’ equity level as of the end of 2017 exceeded 77% of total assets.

Not only did ACES have a successful year financially in 2017, the Company also developed a budget for 2018 that included an overall rate decrease to the Members of approximately 1%. ACES’ management recognizes the importance of holding the line on Member fees and, as a result, the initiatives outlined in the Company’s Strategic Plan include a strong emphasis on containing costs while continuing to provide high quality services to the Members.

View a copy of ACES’ 2017 audited financial statements.

ACES’ 20th Anniversary

In 2018, ACES will embark on its 20th year of operations. Two decades of continued growth is a true testament to the dedication of our staff and our Members’ trust. Furthermore, the fact that several employees have remained with the company since the beginning speaks volumes about the character and commitment of our team. While ACES has changed considerably over the years, our commitment to our Members and the cooperative program is as strong as ever.

Generator Operator Services

ACES will begin offering Generator Operator (GOP) services in 2018 to meet the specific needs of one of our Members, Buckeye Power. While ACES has provided generation management services for Members in the past, we will expand our capabilities in this area. Providing this service will require construction at ACES’ headquarters to allow compliance with NERC requirements. Significant planning and training for ACES staff will also be required. Once the infrastructure is in place, ACES plans to market this service to our Members and Customers. Offering GOP services will open new doors for ACES, allowing us to grow our business in ways that were previously not possible, while providing additional revenue for the Company and offsetting Buckeye’s costs for the service.

2018 Joint Conference

ACES 14th Annual Members Conference will be held jointly with the National Rural Utilities Cooperative Finance Corporation (CFC) Forum 2018. The joint conference will take place June 10-13, 2018, at the JW Marriott in downtown Indianapolis. ACES and CFC previously held a joint conference in 2013. Due to the timing, location, and overlap in attendance for both conferences, ACES and CFC agreed that collaborating again would be in the best interest of our respective Members. ACES and CFC have worked closely to plan the agenda and line up the speakers. This collaborative event will provide exceptional educational and networking opportunities. Sessions will feature customized content from industry experts and other prominent leaders.

ACES’ Board of Directors is comprised of two representatives from each of our 21 Members. The map below shows the locations of each of ACES’ Members. Hover your mouse over the green dots on the map to view the Directors that represent each Member on our Board.