weare PROVIDERS PARTNERS RELIABLE YOUR SRE Annual Report

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1 weare A TEAM LEADERS SAFE PROVIDERS PARTNERS RELIABLE YOUR SRE Annual Report 2017

2 weare TEAMMATES Team: A group of people with different skills and different tasks who work together on a common project, service or goal, with a meshing of functions and mutual support. Vision. Cooperation. Spirit. Dedication. Teamwork. As we look back at 80 years of service to our communities, we are reminded of what it took to get here. Communities came together and worked as a team to light our rural countryside. That same cooperation and love of community are still alive today, and we consider it a privilege to serve you. Southern Rivers Energy is your locally owned and operated electric membership cooperative, and our roots are grounded in service, community and education. We not only provide power for your homes and businesses but we also work with community leaders to support economic growth and development and partner with local schools to provide grants and scholarships for teachers and students. We are successful only when our consumers are satisfied and our communities are thriving. We strive for excellence in every service we provide and welcome your feedback on how we re doing. It s the partnership with our consumers and our communities, coupled with the hard work and dedication of our employees, that have made us successful for 80 years. We are a team. We are your Southern Rivers Energy. Board Chairman John Dumas President/CEO Michael McMillan Board Treasurer Millie Alexander 18B southernriversenergy.com GEORGIA MAGAZINE

3 Randy Winkles Safety Coordinator Safety has always been a priority at SRE but now, with the newly created position of Safety Coordinator, our increased focus on the subject will ensure a high level of commitment to safety across all departments. We are dedicated to sending our employees home safely to their families and to looking out for the well-being of our communities. Rob Hall Engineering Services Supervisor Whether we are building new services or making repairs during outages, the quality of our work is vital to ensure safe, reliable service for you. We have begun using drones to help with routine equipment inspections that allow us to identify needed repairs or replacements before they become problems. We value your trust in us to provide quality service, and we are proud to be your trusted energy partner. Erin Cook Director of Marketing and Member Services Supporting the communities we serve is definitely a team effort, and it s something everyone at SRE takes pride in doing. Our jobs go beyond the light switch. We are volunteers, supporters of civic groups and partners in education. We are your source for power and information. Jason Parrish IT Supervisor Technology is constantly changing and advancing. Staying current is vital for efficiency inside and outside the office. This year, we implemented several new systems to streamline operations and field communications, in addition to upgrading our cybersecurity systems to provide better protection for sensitive account information. We are always looking out for you. Over the past 80 years we ve grown not only in size and scope but also in the way we deliver service to you. We serve a diverse membership, so we provide a variety of communication, payment and billing options to fit each consumer s needs. We have worked hard to stay grounded in our original mission to provide safe, reliable electricity at the most affordable cost possible. But we also are committed to staying informed of the latest trends and implementing new processes to make your life easier. Our community outreach efforts are making a lasting, positive impact, and we are not only proud to serve you but also to partner with you in these endeavors. Steve Caison Chief Operating Officer In order to provide the best possible service for our consumers, we have to maximize efficiency. One of the ways we are working on this is through an increased effort on training to take full advantage of all our current information systems. Analyzing all our available data will help us minimize costs and benefit both our consumers and our cooperative. We are working for you. 18C Southern Rivers Energy Annual Report GEORGIA MAGAZINE

4 weare PROVIDERS Southern Rivers Energy is much more than just electricity, but the service we provide is at the heart of who we are and what we do. We consistently utilize the latest technology to make system improvements that will support demand and increase reliability. You can rest assured our team of engineers, servicemen and lineworkers are dedicated to making sure we maintain the quality of your electric service. [Numbers correspond to the map below.] Design work is underway for a new substation and connecting feeders in the Rocky Mount area in Meriwether County. The substation will support the growth near Coweta County and provide backup between it and the Gay substation so that either can pick up the load should one lose service. The substation is scheduled to come online in December We are nearing completion of a tie between the North Zebulon and Griffin No. 9 substations that will allow us to switch feeds for the Pike County Middle and High schools, the Pike County Industrial Park and surrounding areas. Being able to transfer feeds between substations will isolate faults and minimize the number of consumers affected by power outages. We are working on the voltage conversion of the Milner substation, which will support growth in that area of our territory. This conversion will double the voltage on the lines and cut the current in half, which will extend the useful life of the existing wire. Once all the substations are converted to the same primary voltage, they can be tied together more easily providing more options for managing outages. A third-party contractor, TRC, is performing the Joint-Use National Electrical Safety Code (NESC) safety inspection making corrections to all pole-attachment violations. Following a formal process to inspect for and correct NESC violations by SRE and other pole users, like cable and telephone companies, ensures that our system is safer for members, the traveling public and all lineworkers BY THE NUMBERS: Shane Wilson Mapping Tech MORE THAN 1,100 WORK ORDERS CREATED APPROXIMATELY 390 NEW SERVICES INSTALLED KWH SOLD: 315,047,071 MORE THAN 230 MILES OF LINE, 5,147 POLES, 167 PIECES OF PAD-MOUNTED EQUIPMENT AND 2,040 METER BASES INSPECTED SRE Territory SRE Office 18D southernriversenergy.com GEORGIA MAGAZINE

5 Balance Sheet ASSETS Dec. 31, 2017 Utility Plant Less Depreciation $ 59,572,014 Cash in Bank 453,796 Temporary Investments 7,005,610 Investment-associated Organizations 4,611,204 Accounts Receivable 2,443,913 Materials and Supplies 245,028 Other Assets 8,437,793 Dec. 31, 2016 $ 57,525, ,497 8,427,551 4,502,414 2,248, ,672 8,650,448 Bibb Coweta Crawford Lamar Meriwether Total Property Taxes Paid Per County in 2017: $736,783 $95 $27,127 $58,319 $109,165 $341,785 TOTAL ASSETS $ 82,769,358 $ 82,031,747 Monroe Pike $42,065 $128,380 LIABILITIES AND EQUITIES RUS Loan Obligations NRUCFC Loan Obligations FFB Loan Obligations Membership Fees and Deposits Patronage Capital Margins Other Liabilities TOTAL LIABILITIES & EQUITIES $ 13,925,698 1,590,893 19,619,816 1,029,671 30,528,269 3,356,802 12,718,209 $ 82,769,358 $ 15,329,290 1,708,013 20,231,929 1,033,889 27,852,804 3,016,015 12,859,807 $ 82,031,747 Spalding Upson $20,915 $8,932 Sales Tax In addition to paying property taxes throughout our service territory, we also collect sales tax. In 2017, we collected a total of $2,728,737 in county taxes and a total of $1,402,352 in state taxes. OPERATING STATISTICS Cost of Purchased Power Operations and Maintenance Depreciation and Amortization Interest and Other Deductions Consumer Accounts Expense Consumer Assistance Expense $ 22,964,976 5,612,266 2,664,453 1,805,767 1,043, ,545 Administration and General Expense Operating Margins 4,162, ,263 TOTAL ELECTRIC REVENUE Non-operating Margins Interest $ 39,648, ,738 Other Capital Credit and Patronage Capital TOTAL REVENUE $ 174,011 40,685,444 $ 22,667,736 5,206,224 2,552,198 1,816, , ,567 4,020,067 2,482,397 $ 40,153, , ,594 $ 41,005,876 Southern Rivers Energy paid a total of $189,449 in sales tax on items used by the cooperative. Debt Management In a cooperative business model, everyone using the service must carry their own weight. Since we are not-for-profit, there is no way to offset costs. If someone doesn t pay for the services provided, it affects everyone. In 2014 we started the Pay Your Way prepay billing program, which allows consumers to pay for electricity before they use it. There are no deposits or late fees and it provides a way for us to recover delinquent fees through a debt-management program without having to disconnect service. Since 2014, we have put $36, into debt management and have recovered $33, as of 05/31/18. This is just one more way we are looking out for you and keeping your cooperative financially sound. 18E Southern Rivers Energy Annual Report GEORGIA MAGAZINE

6 EIGHTY YEARS OF FAITHFUL SERVICE May 11, 1935: President Franklin D. Roosevelt signed Executive Order 7037, which created the Rural Electrification Administration (REA). Aug. 11, 1938: Lamar EMC s system was energized and dedicated by President Roosevelt Lamar EMC grew from 144 miles of line to 772 and now served 3,331 meters In 1949, the REA was Domestic microwave authorized to make loans ovens first became for telephone improvements. practical in the 1960s Lamar EMC was among three Georgia cooperatives honored for outstanding safety records By the early 1970s, about 98 percent of all farms in the United States had electric service. In 1974, Georgia s EMCs joined together to start a power supply company: Oglethorpe Electric Membership Corp. (OEMC), later known as Oglethorpe Power Corp. (OPC). ENERGY EFFICIENCY It seems counterintuitive to help consumers use less of your product, but that is what energy efficiency is all about! Part of our job is to educate consumers on how to use electricity wisely and control their costs. It s not about making a profit; it s about providing quality service. SAFETY We take safety education seriously and our employees receive regular training to guard against accidents. We also stress the importance of electrical safety with our consumers and communities through newsletter articles, ads and web and social media posts. Electricity can be extremely dangerous without the proper equipment and education. POWER SUPPLY PORTFOLIO SRE receives power from a diverse mix of resources. This helps ensure that we are not heavily affected by extreme price fluctuations by any one resource. weare RELIABLE 54% 2% 1% Power Supply for SRE We are adding more solar to our power supply mix, helping to reduce the need for energy produced by traditional sources. A diverse power supply portfolio helps keep rates stable. 28% 15% Nuclear Coal Gas Hydro Renewables 18F southernriversenergy.com GEORGIA MAGAZINE

7 In his 1938 speech at Summers Field in Barnesville, President Roosevelt said the dedication of Lamar EMC was a symbol of the progress we are making and we are not going to stop. His words ring true when recounting the accomplishments not only of this cooperative but also of cooperatives across the nation. We are a network of 838 co-ops, serving more than 42 million consumers in 47 states and we will continue using innovation and concern for community to improve our service to you and quality of life for our communities. Photos Courtesy of NRECA and Southern Rivers Energy 1979 The REA began requiring an active energy conservation program for all future applications for distribution loans Lamar EMC began selling energy-efficient lightbulbs at its headquarters Cooperatives, including Lamar EMC, provided local radio and television stations energy efficiency information informing members of critical hours involving electrical use through Watt Wiser bulletins By the 50th anniversary of Lamar EMC, they served more than 9,000 meters and powered 1,750 miles of line in nine counties Lamar EMC moved to its new headquarters in Barnesville Jan. 1, 2005: Lamar EMC changed its name to Southern Rivers Energy Southern Rivers Energy began offering scholarships and Bright Ideas teacher grants, funded by ORU Operation Round Up (ORU) was introduced, allowing 2018 members to help others by rounding their utility bill to Southern Rivers Energy serves 19,074 meters an even amount. along 2,780 miles of line. Total ORU Community Investment to Date: $229,258 Schools and education $526,275 Community outreach and development $343,930 Emergency, health and safety 18G Southern Rivers Energy Annual Report Operation Round Up Southern Rivers Energy adopted Operation Round Up (ORU) in 2005, giving consumers the opportunity to support local charities and individuals in need by paying an even amount on their power bill each month. This innovative program is the definition of neighbors helping neighbors, and though your donations are small, the rewards are exponential. Since the first grant was awarded in 2006, our communities have received more than $1.1 million in donations thanks to your generosity! In addition to community grants funded by ORU, scholarships and teacher grants are also supported through the SRE Trust Scholarship and Bright Ideas programs. Since 2007, the SRE Trust has funded $326,000 in scholarships for local students and grants for teachers. GEORGIA MAGAZINE

8 Official Notice of Annual Meeting of Members T he Annual Meeting of Members of Southern Rivers Energy will be held behind the cooperative office on Hwy. 341 S in Barnesville on Saturday, Aug. 25, 2018, to take action on the following: 1. Reports of officers, directors and committees; 2. The election of three directors of the cooperative; 3. A proposed bylaw amendment; 4. Other business that may come before the meeting or any adjournment thereof. Aug. 25, 2018 Health Fair Members will vote on a proposed bylaw amendment that if adopted, will update Article III, Section 3.02, pertaining to director eligibility which currently reads: No person shall be eligible to become or remain a director who is not eighteen (18) years of age or older. The proposed amendment would change that statement to read: No person shall be eligible to become or remain a director who is not competent to legally enter into a contract in the state of Georgia. The Nominating Committee, appointed under the provisions contained in the bylaws of the cooperative, has nominated the following to serve as directors of the cooperative for a period of three years: Samuel W. Snider John H. Pope Nedam E. Walker Jr. Registration begins promptly at 8:30 a.m., followed by the business meeting at 10 a.m. This is your opportunity to exercise your right as a member of Southern Rivers Energy. We look forward to seeing you there. Dated this 25th day of July, Harry N. Park, Secretary southernriversenergy.com Upson Regional Medical Center is bringing their extensive health fair, complete with staff knowledgeable about health and nutrition. Information Booths You can also learn more about home energy efficiency, the Co-op Connections and Operation Round Up programs and more. Cooperative Update Our brief business meeting will consist of a welcome from Board Chairman John Dumas and a report from President/CEO Michael McMillan. Breakfast There were no nominations made by petition as provided for in the bylaws of the cooperative. 18H Annual Meeting Highlights Enjoy sausage hot off the grill or some fresh fruit. Gifts and Prizes Members, please bring your personalized registration card and door-prize ticket from the front of the magazine for quick and easy registration. Those who bring their registration cards will receive a special gift. Only registered members are eligible for the doorprize drawing. Grand Prize $500 CASH! Operation Round Up members active in 2017 will be entered in a separate drawing for a flatscreen TV as our way of saying Thank You for your generosity. GEORGIA MAGAZINE