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For the Co-op financials included in the Annual Report, see the attached file at the bottom of the page or click here
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2025 Annual Report - President & Chairman's Report
Chris Reese, President & CEO
Jack Haggerty, Chairman of the Board
Few members remember this community before it had electricity or how its farmers and rural neighbors worked together to bring power to the area 89 years ago. Today’s members have always enjoyed electricity and expect it to always be available at the flip of a switch. We maintain an exceptionally reliable system and work hard to keep power outages to a minimum. When a problem does occur, our team works as quickly as safety allows to restore service. From the beginning, SREC’s mission has remained the same: to provide our members with the highest quality of service at the lowest possible cost.
SREC members had their power on and available an average of 8,756 out of the 8,760 hours last year and our times to restore power remained consistently low. Reliable electricity doesn’t happen by accident. It requires ongoing investment in our local grid—through system repairs, maintenance, upgrades, and the integration of new technologies that help us operate smarter and more efficiently. We spend over one million dollars annually on Right of Way clearing to limit interference from vegetation along our 750+ miles of line.
Ash trees and their branches, weakened over recent years by invasive pests like the emerald ash borer, make great ammunition for winds to take down power lines. In fact, trees and high winds accounted for the highest number of outages in 2025. Per the National Weather Service, New Jersey had 24 wind advisory events in 2025—11 more than normal and the highest deviation from average out of any forecast office in the U.S. We also had the most recorded wind advisories in 20 years. In 2025, high winds caused multiple wide-reaching outages for us on Halloween and the following days, as well as during the week leading up to Christmas.
Our region also experienced the coldest December in the last 15 years which was, according to njweather.org, “NJ’s coldest December since 2010 and third coldest since 2000.” Usage data showed how low temperatures linked to higher usage. Per the National Weather Service: “average daily temp for December 2025 was 29.6° F, with average daily minimum temp 20.6° F.” This is a stark drop from December 2024, where average daily temp was 32.1° F with daily average minimum temps of 23.0° F. SREC’s office was flooded with calls about high bills as most members were caught by surprise after milder temperatures in the preceding months and past few years.
2025 was marked by increases in costs among the whole electric utility industry. SREC’s rates include three components: generation, transmission, and distribution. Over recent years, we’ve seen large price spikes in our generation, transmission costs, and for open market power. These increases are the result of U.S. power supply struggling to meet higher demand due to early and premature closure of coal and nuclear plants and surging demand for electricity, as well as recent geopolitical events. These market forces were factors in the rate increase implemented in December. Thankfully, Sussex REC, along with its sister cooperatives in Pennsylvania, does not put all its eggs in one basket. We co-own nuclear and hydropower generation resources, insulating us from some of the impact and resulting in Sussex REC having the lowest rate in the state.
Meanwhile, the costs of operating and maintaining our local distribution system, along with costs for material, equipment, and supplies, have increased too. Key materials like transformers, poles, and wire now cost 40–100% more than they did just a few years ago. These are purchases that we cannot avoid, as we need inventory on hand for regular maintenance and for restoration from severe storms as well.
The issues and cost increases facing our industry are not due to a single cause. Rather, they are the result of a combination of market forces, policy decisions, infrastructure needs, and changing patterns of electricity use. While we can’t control these external pressures, your Cooperative will continue working to manage costs, advocate for a balanced energy mix, and make strategic investments that protect both reliability and affordability for our members.
SREC operates at cost, so there is no budgeted mark-up of our rates to turn a profit, to increase a stock price for investors, or to cut a dividend check for shareholders. In fact, our 2025 margin stated in this Annual Report was $843,654. That is just a 3% return on sales, compared to an industry average of 14.6%*. In this current era of affordability concerns, the cooperative tries extremely hard to live up to the “lowest possible cost” portion of our mission statement. However, our rates must still cover the rising cost of supplied power, the rising cost of materials and equipment, more preventative right-of-way maintenance, and the necessary staff working to fulfill our mission for our members.
Ongoing system upgrades and investments in technologies like AMI and SCADA with FLISR increase our resilience. Through a multi-year project, we continue to replace older transmission poles throughout the territory to strengthen our distribution system. We continue to promote services that can reduce costs. More members are adopting paperless billing as their preferred means to get their electric bill. This not only makes payment more convenient for members but also saves money for the Co-op by reducing printing and mailing costs. Like everything else, those costs have also risen in recent years. With 12,000 members on our system, each conversion to paperless billing is a significant cost savings.
Sussex REC’s wholly owned contracting subsidiary SREC Resources had a good financial year in 2025. During the last year, Resources technicians handled 11 installations of Cummins whole house generators, 7 ETS heating systems, and 26 GenerLink transfer switches. In addition, SREC Resources works on customer-side high voltage contracting jobs for commercial and industrial customers throughout northern NJ. SREC Resources will continue to provide electrical contracting services to the area in 2026.
Sussex Rural Electric Cooperative completed year 24 of its 50-year contract with the U.S. Army to provide utility services within Picatinny Arsenal. Throughout 2025, many improvements, upgrades, and replacements were completed. Our contract with Picatinny continues to benefit the Cooperative, allowing us to maintain strong line crew coverage during storms and large jobs along with providing us with additional revenue.
Our Annual Meeting Event is coming up, once again split into an Online Meeting covering business updates and an in-person Member Appreciation Event held at the NJ State Fair. Our Online Meeting becomes available on Monday, July 6th at www.sussexrec.com/fair, where you can register to reserve up to two free Fair tickets. SREC will be at the BBQ Pavilion at the Fair on August 3rd where members who attend will receive a $10 bill credit, prizes, and a chance to win free electricity for a year. We hope to see you there!
The cooperative difference is evident from our residential electric rate being lower than 99% of the state’s population, to expansion in grid hardening and outage management capabilities, to our relationship with members and our level of community involvement. While tomorrow seems challenging, the possibilities are promising.
