Dear members and shareholders,
I would like to welcome you all to the first Annual General Meeting of the Oxford Community Energy Co-op
Good morning and welcome to Oxford Center, the location of our key project, the Gunn’s Hill Wind Farm. Thank you for being with us today
Today’s meeting will show you how we serve the needs of members and shareholders by building this great Co-op and creating an exceptional trust relationship through strong financial and operating discipline in everything we do. We take our responsibility to serve our members, our investors and our community seriously and this commitment drives our actions every day.
Review of Performance
2014 was an important year, during which the Oxford Community Energy co-op passed a number of important milestones:
Your co-op was formed on September 19th 2013 with seven incorporating directors as a ‘For profit renewable energy co-operative with share capital’. The incorporating directors where John Andrews, Harry French, Rochelle Rumney, Gary Zavitz, Juan Anderson, Christine Koenig and Helmut Schneider.
The OCEC board of directors set five specific goals for their first year of operation.
- 1. To build a strong and determined governing board of nine directors
- 2. To recruit a minimum of 50 members from the local community
- 3. To engage in an effective partnership with Prowind who had a very attractive renewable energy project. To do so we wanted to draft and sign a Limited Partnership agreement that provided appealing benefits for our members and investors
- 4. To write an Offering Statement that provided relevant and transparent information for our investors which allows them to make an informed decision to become confident share and bondholders.
- 5. To raise a minimum of 1.2 million dollars in equity from within the community of Oxford County to prove that this community supports this renewable energy project.
In addition to all the logistical milestones such as incorporating the Co-op, writing the Co-op by-laws, securing a business address, creating a company logo, developing marketing material, securing the operating capital and building business relationships, we have achieved every one of our goals on your behalf.
The Limited Partnership Agreement was signed and released on January 15 2014. It is the agreement that governs our relationship as a limited partner with Prowind for the duration of this project. It is very important for the success of this Co-op to have a strong and mutually trusting relationship with our General Partner. Prowind embraces and supports the community ownership model and we continue to strengthen this important partnership. The LP agreement OCEC negotiated on your behalf provides for a very attractive return on your investment that is backed by a 20 year provincial power purchase agreement.
In the early spring of 2014 your board of directors worked diligently on the Offering Statement – a 200 plus page document that was submitted to the Financial Services Commission of Ontario on April 22 2014 and receipted by FSCO on May 14 of the same year.
Currently the Oxford Community Energy Co-op has 133 members, over 50 of which live in Oxford County. Of our 87 investors 35 are residents of Oxford County with an investment total of $ 2 066 000 from the members of this great community. Our current total equity investment is $ 4 696 000 which represents a Gunn’s Hill project ownership of 27% - well beyond the minimum required ownership of 10% to be counted a community project but also about 4 million shy of our ownership potential of 49%.
Raising almost $ 5 million in equity for this project is a significant achievement for this team and it clearly demonstrates the focus and determination of your board of directors.
The Oxford Community Energy Co-op has become a household name in the Ontario Renewable Energy Community during the past year and many observe our success with interest and anticipation. We are setting a standard for effective cooperation in the development of a midsize project using a partnership model. In January OCEC was awarded the “Community Project of the Year” Award by the Ontario Sustainable Energy Association and it was a great honor for your board of directors to receive this recognition at the 5th annual Power Prosperity Gala in Toronto.
It's inspiring and I believe transformative for a team to achieve these results. Waves of energy like this come in cycles and they create windows of opportunity where vision and leadership are rewarded. We are determined to use this energy to set new, aspiring goals for the next year ahead.
The board of directors has a clear vision of the challenges for this coming year.
We want to continue to strengthen our team with the addition of 4 new directors 3 of which are residents of Oxford County. It became clear to us that the optics of having a majority of local director on our board will be a benefit for OCEC. Recognizing that, we were careful not to compromise the need for high quality and capable directors to represent you on this board over the desire to build a more local board. I am convinced that the candidates you find on the slate of directors will be able to continue to provide the same capable governance that last year’s board demonstrated. Clearly, the outgoing directors will leave a void that is not easily filled by a new director. In order to support the transition of knowledge and experience all outgoing directors have received a request by OCEC to maintain a volunteer advisory position to the board. Harry French, John Andrews and Juan Anderson where able to commit to this request. In addition we accepted the offer from Hans Eckart who is a member of this Co-op and a chartered management accountant, to become an advisor to this board as well. The OCEC board is grateful for the generosity of these members to commit their time and experience to the board.
Our equity position in the Gunn’s Hill project can increase to 49% in combination with a 10% ownership of our Six Nations Limited Partner. This means that we want to raise at a minimum an additional 2.3 million dollars in shares and bonds. We have a well-developed plan on how to work towards this goal before the financial close of this project but we also need you, our members to participate in this effort. If you are not an investor yet we would urge you to make this important decision now. The calculated returns in this project are unique and not easily achievable especially in an environment that is not subject to the volatility of the market and with a 20-year secure contract. If you are an investor you may want to consider increasing your investment before this opportunity closes and all of you know friends, neighbors and family members that would also be able to benefit from this investment opportunity.
At a maximum OCEC can still raise up to 4 million in additional equity which would provide a full community project ownership of 49% and we have not given up on that goal. In that case Prowind would reduce their ownership to 41% to allow Six Nations to participate as a Limited Partner.
The next big milestone we are waiting for is the Notice from the Ministry of the Environment and Climate Change (MOECC) that the Gunn’s Hill Wind Farm has been given REA approval. We have been waiting for this announcement since August 2014 but were made aware that the Ontario elections last year would delay the approval process. All questions from the ministry have been addressed and we received confirmation in February that no further questions are outstanding. We are expecting the REA in the near future. We will apply for the ‘Notice to Proceed’ from the IESO (previously OPA) immediately after REA approval and expect that it will be granted within 15 business days. We anticipate that the REA decision will be appealed and that we will have to go through an Environmental Review Tribunal process. We will of course continue to offer open dialog to any community members that are concerned about the Project as we have done before.
The most exciting goal is of course the start and completion of construction. We are still hopeful that the majority of the construction will be completed in 2015 so that we can combine our next AGM with a site visit of the Gunn’s Hill Wind farm.
Your board of directors has agreed to continue to work as a volunteer board for the time being until we can ensure that director remunerations will not in any way impact the investor returns. In the financial report you will recognize that this board has always been very budget conscious. Using a virtual office as a mailing address, creating almost all of our marketing material ourselves and the pro bono work of your directors are examples of this cost down attitude.
I also want to recognize the work of the outgoing directors. This is the team that made this Co-op what it is today and I will give special attention to this point later in the program
The challenges are there in the coming year. This is a reality. Another reality is that OCEC is positioned to meet those challenges head on. Today, the Oxford Community Energy Co-op is a very good Co-operative and tomorrow we can be a truly great organization. That’s why I am optimistic about where we are and where we are going.
Thank you very much
I want to thank all the members that made their way to this first Annual General meeting. The new board of directors wants to thank you for the trust you are putting in us and we will make sure to do our absolute best to honor this trust by governing this Co-op on your behalf