The energy business is a challenging one these days, but I am pleased to report that asof the year ending Dec. 31, 2006, your Cooperative continues to be in sound condition bothfinancially and operationally. Information and charts on the following pages highlight specific usage and financial data for 2006. However, I think it is valuable to point out those numbers that are prime examples of the unique way cooperatives operate and show first-hand how the Cooperative Principles work. These principles and the Electric Consumer Bill of Rights, which have been talked about in previous Florida Monthly magazines, provide a framework for the trustees’ and management staffs’ goal of bringing you, the member, the safest, most reliable and most affordable power possible.

Central Florida Electric Cooperative is a consumer-owned, not-for-profit utility company. Because our members are the owners, there is no incentive to overcharge, mislead or act in any way that is not in your best interest. The combination of energy rates and fees must be sufficient to cover all operating costs and to provide a margin to pay for capital improvements and debt service requirements. In 2006, CFEC met all its financial commitments and was then able to return more than $600,000 to members. More than $314,470 was returned in Patronage Capital to our members of record for part of 1986 and another $294,609 in Patronage Capital was returned to the families and estates of deceased members during the year.

Not being a profit-driven entity allows your cooperative to assist you when possible in reducing the cost of power and in implementing conservation practices. One way we do this is through the Load Management program, which involves the control of air conditioners/heaters, water heaters and large generators. In 2006, this program continued to play a role in the lowered cost of power of our members. To learn more about this program, contact your cooperative’s member services representative.

Energy sales of your cooperative increased by 2.3 percent over 2005, for a total of 501,994,911 kilowatt hours. The average monthly usage for residential members was 1,043 kilowatt hours per month. It is interesting to note that the average monthly usage of our members remains below the statewide average of 1,201 kilowatt hours per month.

Overall, for the 2006 total revenue distribution, 68 percent was allocated to power costs and 17 percent to operations. This is the same percentage breakdown as occurred in 2005, even though the total services and miles of energized line were increased from 2005.

The challenges of providing dependable, efficient and economical electric service to our members are many. The trustees, along with the cooperative management, work closely to make the best business decisions in order to build, maintain and improve your cooperative’s system and services. This is only possible with the continued support of you, the members, and the continued dedication of our employees.

To celebrate another year of meeting these challenges, I join with your manager in inviting you to attend your Annual Meeting on October 6th at the cooperative’s warehouse, beginning at 8:00 a.m. We look forward to seeing you there.