TO OUR MEMBER OWNERS A Letter From Snapping Shoals EMC

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4 TO OUR MEMBER OWNERS A Letter From Snapping Shoals EMC As an electric cooperative, Snapping Shoals Electric Membership Corporation is different from other forms of business because it is 100 percent locally controlled and democratically governed. Members who receive electric service from Snapping Shoals EMC are also owners of the cooperative. As a member-owner, you are represented by fellow members you elect to serve on the Board of Directors. These Directors understand and can relate to issues and concerns that impact all member-owners. They are fellow members, who above all else, are committed to serving you. For Snapping Shoals EMC, the goal has always been the same delivery of reliable and competitively priced electricity to our member-owners. Established some 77 years ago by cooperative leaders who were determined to bring electricity to rural Covington, these guiding principles have truly stood the test of time. Snapping Shoals EMC continues to remain committed to safely delivering reliable, competitively priced electricity while being accountable to our member-owners through sound governance, management and operating practices, as well as improving the quality of life in our local communities. Our commitment to competitively priced electricity is substantiated by the most recent Public Service Commission s (PSC) winter rate survey. We are very proud of the fact that, like many previous years, residential rates for Snapping Shoals EMC members are some of the lowest rates among the 94 utilities in Georgia. At the very core of these low rates are 226 dedicated, highly skilled and motivated employees who ensure daily the delivery of reliable and affordable electricity to all of our members. They are the muscle of our cooperative strength and we thank them for their tremendous contribution to Snapping Shoals EMC s success. Beyond our commitment to the reliable delivery of electricity, your cooperative remains focused on the continuous path of providing improvement in member service. Our emphasis is focused on delivering the value-added programs and solutions that save our member-owners time and money. Technological advances such as the myssemc app, the outage viewer on our website and the recently expanded payment options in our lobbies are all examples of offerings that provide greater convenience for you. We also remain very focused on being connected to the communities we serve. True to our cooperative values, we support programs, projects and organizations that help promote enhanced quality of life in our service area. Snapping Shoals EMC employees share their time and talents by volunteering in many of the local organizations in our communities. We work to develop and safeguard local jobs by supporting employers and industries. We also provide financial support to many local causes through our Operation Round Up program and unclaimed capital credit dollars. Your Cooperative is dedicated to meeting your needs in the best possible way, 24/7. The Directors and employees of Snapping Shoals EMC truly take pride in serving you each and every day and promise to always keep improving our service and putting our members needs first. We are proud to be your electricity provider. Bradley K. Thomas President / CEO Anthony Norton Chairman, Board of Directors 2.

5 THE POWER OF OUR COOPERATIVE A Proven Model for Providing Energy to Members There are three main types of electricity providers in the U.S. Investor-owned utilities (IOUs) serve primarily densely populated areas. Municipal-owned utilities serve densely populated cities from the very large, such as Los Angeles, to the very small like Robersonville, NC. And of course, there are electric cooperatives that serve less populated parts of the country. In the utility business, population matters a lot. Economies of scale allow distribution cost to be shared by more customers and in theory keep rates lower. Municipal-owned utilities, which operate in cities and towns, have the greatest density at 48.3 customers per mile of line. IOUs follow with 34 customers per mile of line. Finally, the average electric co-op serves 7.4 members per mile of line. SSEMC serves about 15 members per mile. Given these facts, it would appear electric co-ops should have higher rates than municipal-owned utilities and IOUs, but that is not the case. Snapping Shoals EMC members continue to pay less for their electricity than most other Georgians, according to the 2015 Georgia Public Service Commission s (PSC) winter survey. Among 94 electric providers in Georgia, your co-op has the 2nd lowest residential rates at 2,000 kwh. The average utility charged $ while SSEMC only charged $ Your co-op s rates are also among the lowest at other levels of the survey, being the 3rd lowest at 1,500 kwh, 3rd lowest at 1,000 kwh and 9th lowest at 500 kwh. Our low rates are a direct reflection of the cooperative business model. IOUs are owned by outside investors that may or may not be users of the electric utility they own. These companies stocks are traded on Wall Street, and those investors demand a return on their investment, leading to higher rates. Snapping Shoals EMC operates on a not-for-profit basis. Being not-for-profit means that we only collect enough revenue to cover the costs of operating our business. Any excess revenue is retained for the members in the form of capital credits. Whenever possible, Snapping Shoals EMC s Board of Directors elects to refund a portion of these capital credits to the members. We are proud to announce that $3.5 million will be returned to our members this summer. The amount of each member s 2015 refund is based on his or her electric energy use for the year Bringing value to members is the cooperative way and is something Snapping Shoals EMC strives to do every day. Russell Nelms Snapping Shoals EMC Lineman 3.

6 EMBRACING OUR COMMUNITIES Partnering with Those We Serve Snapping Shoals is fortunate that we re able to give back to our community, and we re also fortunate to have so many caring members. For instance, our Operation Round Up program lets these kind-hearted members lend a hand to those in need by having their bills rounded up to the next dollar. The funds members contribute are used to help qualifying charitable/community organizations with specific needs they have or to directly help people in need of assistance with household or living expenses; home repairs or equipment; and medical or health needs. In 2014, Operation Round Up contributed $373,838 to our community and its members. A big advantage of being part of an electric cooperative like Snapping Shoals EMC is that we operate on a not-for-profit basis. This enables us to return our margins, which are revenues collected in excess of expenses, to the co-op members. Margins, also known as capital credits, are usually retained by the cooperative for a while to be used as a source of funding for the construction of new lines and other utility expenses. After capital credits are returned to the members, any unclaimed funds are used to support SSEMC s educational programs, such as scholarships and Bright Ideas, as well as other community projects, such as the Miracle League and Phoenix Pass. Snapping Shoals EMC prides itself on giving back. Our employees are no exception when it comes to sharing their time, talents and money with a variety of charities. Many of our employees volunteer as mentors and reading coaches at area schools. In addition to the support they gave to various other charities and civic groups in 2014, Snapping Shoals employees raised nearly $17,500 for the American Cancer Society s Relay for Life. Snapping Shoals is proud to be a big part of the community we serve, and the fact that we re owned by those we serve pushes us to work harder every day. We promise to always be a community partner, focused on improving the quality of life in the communities we serve. Miracle League of Newton County Athlete Clare McGiboney and her Buddy Liam McGiboney

7 THE RESPONSIBILITY OF BALANCE Maintaining the Avenues of Power Delivery If you were to take a drive through our service territory on any given day, you would likely spot some of our right-of-way crews working by the road, trimming tree branches growing too close to power lines. We are truly blessed to serve a beautiful part of the state, and part of that beauty is in the many types of trees that can be found throughout our territory, but there is also beauty in the comfort of knowing power will be available when you need it. At Snapping Shoals EMC, we re committed to providing you with affordable, safe and reliable power. In doing so, there are some things we can t stop, such as ice storms, high winds and tornados, but we do what we can to reduce damage from those events and prevent other outage culprits. According to a survey by the National Rural Electric Cooperative Association, weather-related events cause the majority of power outages for electric cooperatives, and vegetation growing too close to power lines and distribution equipment during those events can cause even more damage. To cut back on potential tree-related problems, Snapping Shoals EMC operates a responsible right-of-way management program. Our crews and contractors look for foliage growing under lines, overhanging branches, leaning or other types of danger trees that could pull down a power line if it falls, as well as trees that could grow into lines. The job is never done because by the time crews finish trimming along our many miles of distribution lines, vegetation has started to grow back at the starting point. In working to keep a safe, reliable, and affordable supply of power flowing to your home or business, we need your help. Let us know if you notice trees or branches that might pose a risk to our power lines and before planting trees in your yard, think about how tall they may grow and how wide their branches may spread. Specifications can vary, but at SSEMC we maintain, from ground to sky, 15 to 25 feet of clearance on either side of the power line. We appreciate your help as we work together to keep electricity reliable. To report trees you think may pose a problem, or before you plant, please call us at Matt Robinson Snapping Shoals EMC Right-of-Way Worker 5.

8 OUR ANNUAL MEETING We d like to invite you to our Annual Meeting on July 23 at the Georgia International Horse Park in Conyers. We look forward to gathering with you members of the co-op community to catch up and to enjoy some good fellowship. This event is not only a chance to visit with members of our co-op community, it s also a great opportunity for members to learn about programs offered by Snapping Shoals and meet your co-op staff. It s also an opportunity for you to enjoy some great music from the Omega Quartet and to win prizes, including a TV, DVD player, microwave oven and this year s grand prize, a 2005 Chevrolet Colorado, that is being retired from the Snapping Shoals fleet. Also, the oldest married couple in attendance will win a $100 credit on their power bill, and the oldest member in attendance will win a $50 credit on his or her power bill. You must be a Snapping Shoals EMC registered member and be present to win a prize in the drawing. Registration will start at 8:30 a.m. and end promptly at 11:15 a.m. Members will not be allowed to register after 11:15 a.m. The business session will begin at 11:30 a.m. Gees Mill Road Costley Mill Road Handicap Entrance ONLY Mane Street Grand Prix Blvd. CENTENNIAL OLYMPIC PARKWAY Main Entrance EXIT Rodeo Drive Registration & Handicap Drop-off Area Walkway to Arena EXIT Handicap Parking Georgia International Horse Park 1996 Centennial Olympic Parkway Conyers, GA Handicap Parking Handicap Parking Mane Street DIRECTIONS Take Exit 82 off Interstate 20 in Conyers. Travel North approximately 4 miles. Turn right onto Centennial Olympic Parkway. The main entrance to the park is 2 miles ahead on the right. Charles C. Walker Arena Site of Member Meeting and Events 6.

9 FINANCIALS Snapping Shoals EMC Annual Report An external audit is conducted annually. The following pages contain exerpts from the 2014 audit report. 7.

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11 FINANCIALS Consolidated Statement of Operations Operating Revenues 9.

12 FINANCIALS Consolidated Balance Sheets Assets 10.

13 FINANCIALS Consolidated Balance Sheets Members Equity & Liabilities 11.

14 FACTS AND FIGURES For Year End 2014 General Expenses Maintenance & Operations Depreciation of Utility Plant Interest Members Margins 3% 2% 8% 9% 5% 73% Wholesale Power Cost How Your Co-op Dollar Is Used 4,578 6, , Total Miles of Energized Lines on the Snapping Shoals EMC System On average, we serve 15.3 members per mile of line. 94,790 1,256 1,346 64, , Average Monthly Kilowatt Hours Consumed by Snapping Shoals Residential Members In 2013, the average annual electricity consumption for a U.S. residential utility customer was 10, 908 kilowatt hours (kwh), an average of 909 kwh per month.* Total Number of Electric Meters on the Snapping Shoals EMC System 94% of our electric meters are residential. Commercial and industrial make up the remaining 6%. 12. * Source: EIA.Gov study