Building on our Financial Strength
Over the past several years, Arizona G&T Cooperatives worked toward several major financial goals. In 2016, we achieved these objectives and substantially improved what was already a solid financial picture.
- In March 2016, we completed the merger of Southwest Transmission Cooperative into AEPCO, and began realizing substantial cost savings in terms of administrative costs. This should also result in significant savings in future rate cases.
- The merger cleared the way for an indenture, completed in March 2016, which will help us realize future financial flexibility.
- Later in 2016, for the first time in our history, we sought and obtained investment-grade credit ratings, both representing a stable ratings outlook. We received an “A-“ rating from Fitch and an “A” rating from S&P Global Ratings.
- We are working harder than ever to control costs, and our total debt continues to decline.
Management Letter Introducing 2016 Annual Report Financial Statements
The accompanying financial statements from Arizona G&T Cooperatives, consisting of Arizona Electric Power Cooperative, Inc.; Southwest Transmission Cooperative, Inc.; and Sierra Southwest Cooperative Services, Inc.; were prepared by management, which is responsible for their integrity and objectivity. The statements were prepared in accordance with generally accepted accounting principles, using management’s best estimates and judgments where appropriate.
The cooperatives maintain a system of internal controls, including accounting controls and a strong program of internal auditing. The system of controls provides for an appropriate division of responsibility and the application of policies and procedures that are consistent with the highest standards of accounting and administration.
The cooperatives believe that the system of internal controls provides reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition, and that financial records are reliable for use in preparing the financial statements that have been provided as a part of the annual report.
The financial statements for all three cooperatives have been audited by the independent certified public accountants, Moss Adams, LLP, whose opinion is included as part of the respective financial statements.
The board of directors of each of the cooperatives meets with Moss Adams, representatives of management and the internal auditor to review their activities and to discuss accounting, auditing and financial matters. Finally, to allow for complete independence, Moss Adams has full and free access to meet with each of the directors to discuss their audit results and opinions without the presence of management representatives.
|Patrick Ledger, CEO
|| Pete Scott, CFO