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t r o p e R l a u n n 2011 A A supplement to Carolina Country

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Executive Message

y t i c i r t c e El e u l a V t a e r AG

At Union Power, we are committed to keeping electric bills as affordable as possible while providing you with the safe, reliable power you’ve come to depend on. This year, we’ve managed to hold down our controllable costs, and rates have remained steady. We’ve also renewed our focus on helping you keep your controllable costs down by providing energysaving resources to help you manage your energy use.

Money Back to You: The Cooperative Difference Because Union Power is a not-for-profit utility, we focus on service rather than profit. Any profit from kilowatt-hours sold is reinvested in the operational needs of the Cooperative or returned to members as member dividends. Although we serve a membership of more than 66,000, you are not just a number to us. You are a member, and Union Power annually refunds member dividends when the financial condition of the Cooperative permits. These dividends are issued in the form of a check to members with 20 or more years of service. Members who currently have less than 20 years of service will see a credit on their electric bill if they were signed up for and received electric service by the end of December 2010. The financial health of the Cooperative is strong, and this year, we are retiring $3.7 million worth of member dividends. This represents your ownership in the Cooperative and sets us apart from investor-owned utilities.

System Upgrades and Maintenance As growth in the economy has slowed, we’ve taken a step back to review our processes with a focus on upgrading and maintaining our system. This includes inspections and upgrading of existing substations and equipment and the continuation of advanced metering infrastructure (AMI) implementation. These improvements to our system will continue to deliver value to you for years to come. Three projects are either planned or underway that will enhance reliability and provide capacity for future load growth. In Stanly County, construction is underway on a new substation to replace the sixty-year-old Lambert Substation. A transmission line upgrade has recently been completed on the 44,000-volt, 7-mile line between the Lambert Substation, located near the Ridgecrest community, and the St. Martin Substation, located in southern Stanly County. In western Union County, preliminary engineering is in progress and construction will begin soon on a new substation and transmission line in the Waxhaw area. While improving capacity for future growth, this project will also support the growth that has already taken place in that area over the past few years. In addition, maintenance to our existing system helps prevent small issues from becoming potential problems. The Cooperative maintains more than 5,500 total miles of line in five counties. Our personnel are working to change out poles and transformers as needed, and our tree-trimming crews continue to ensure that our rights-of-way are clear. Since January, more than 500 poles have been replaced and more than 230 miles of overhead line cleared, decreasing the number of tree-related outages.

Union Power Cooperative

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B. L

President, B. Starnes oard of Dire ctors

rrin Tony E. Hneeral Manager

VP, Ge Executive

AMI’s remote communication technology provides faster outage analysis and response. In areas where AMI has already been implemented, meters are read remotely. Our personnel no longer need to visit each meter, and this reduces operating costs. AMI’s near real-time meter reads help us provide you with improved customer service and better assistance managing your energy. We’ve replaced more than 1/3 of our residential meters with the new advanced meters and updated over half of our 22 substations with equipment that communicates with these meters. Implementation is complete in most areas of Rowan, Stanly and Cabarrus Counties. Full implementation is scheduled to be completed within two years.

Keeping Pace with Technology We embrace new technologies that add value to you. We are proud to be one of the few cooperatives in the nation that offers a mobile website, a condensed version of our website. Typing our web address into your phone’s browser gives you instant access to information that includes how to report an outage, payment, news, and our outage map. This map displays the location of any current outages in our service area by county, gives the total number of outages, the total number of members affected, and the number of members whose power has been restored. It updates automatically every minute, so you can be sure you’re getting the most current information. The outage map can also be viewed on our website, www.union-power.com.

Commitment to Community A core cooperative principle is concern for the communities we serve. Annual programs such as our Bright Ideas educational grant program and college scholarships for high school seniors demonstrate our commitment to teachers and students throughout our service area. The Bright Ideas program awards grants to support innovative teaching initiatives not covered by traditional school funding. Since 1994, Union Power has awarded nearly $230,000 to 249 such teaching projects. In the 2010-2011 school year, we awarded $21,400. The Cooperative also gave college scholarships totaling $3,000 to area high school seniors. Through Union Power’s Hearts for Hospice campaign, employees contributed to Hospice of Union and Stanly Counties. They have raised more than $71,000 in the past two years through annual fundraising and generous payroll deductions. This willingness to invest in the communities we serve demonstrates the unique compassion and dedication of our employees. As we have for 72 years, we’re striving to provide you with exceptional value in every way, and we’re proud to be part of your daily lives, servicing your homes and businesses with safe and reliable power.

2011 Annual Report

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Union Power Cooperative

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Board Members

President B. L. Starnes Vice President Richard L. Simpson Secretary/Treasurer Jan Haigler Assistant Secretary/ Treasurer Dent H. Turner, Jr.

Standing from left to right: Lee Roy Kirk, Jr., District I Dent H. Turner, Jr., District I Jim T. Hartsell, District VI Neil W. Hasty, District IV Juanita Poplin, District I Rufus N. Reid, District VI Richard L. Simpson, District II B. L. Starnes, District III Seated from left to right: Vann W. Hilton, District II Carole P. Jones, District IV Jan Haigler, District V

2011 Annual Report

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Union Power Cooperative

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Service Territories Union County Largest service area 3,481 miles of energized line and 44,072 meters

Stanly County Second largest service area 1,000 miles of energized line and 8,454 meters

Cabarrus County Third largest service area 571 miles of energized line and 6,714 meters

Mecklenburg County 344 miles of energized line and 5,859 meters

Rowan R owan County Counnty 155 m miles iles ooff eenergized nerrgized lline ine and 1,0 1,065 065 meters

Rowan Cabarrus

Mecklenburg

Stanly

Union

2011 Annua Annual Report

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Highlights

Union Power Cooperative

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2010 Annual ghlights i H g n i t e e M s s e Busin read proof r Jan Haigler re u as re T / ry notified Secreta h member was c ea ng ti ta s e date of mailing 22, 2010 of th r be m te ep S by mail on Meeting. e 2010 Annual th f o e m ti d an

nced that Griffin annou y bb o B ey rn tto proxy. Cooperative A represented by r o t en es pr were 845 members R. Wilson, tors William ec ir D g, in id r ffin pres Jones With Mr. Gri on, and Carole ps im S . L d ar Rich ar terms. for three-ye were elected ing Principles” ing Our Guid iv L “ ed tl ti en nion Power A short video oduced by U pr as w o de vi The scussing was shown. Cooperative di e th f o es employe operate, with and featured by which we s le ip c in pr g y Process. the guidin rative’s Safet pe o o C e th n a is o emphas or prizes. r $2,500 in do fo ed nc u no n rs an Winne rned by Meeting adjou rnes. ent B. L. Sta Board Presid

2011 Annual Report

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Leading the Way and wnturn, we know that families During this drastic economic do gh choices as monthly bills tou ke ma to d ce for ing be are s businesse e or leaner for groceries and gasolin ng eti dg bu it’s er eth wh in come ment. Since electricity is a cutting funds for jobs and equip value , we strive to provide the best necessary part of everyday life manage your energy and you lp he to nt wa We y. ne mo r for you aving changes that add up. empower you to make money-s

Leading the Way in Online Services Lana Curlee, Director - District office

You can click your way to energy savings on our website, www.union-power.com. Whether you only have 10 minutes or an hour, we have the energy-saving tools for you! Billing Insights puts you in control. Perform an in-depth analysis of your home’s energy use based on your personal account data. All you have to do is enter your account number and input information about your home, then run scenarios to see possible savings. Ever wonder why your energy costs differ from month to month? Our HomeEnergyCalculator provides useful details about your estimated usage, seasonal factors, and cost-saving recommendations. Preview cost-savings actions or investments that would fit your budget. This online energy audit is free and takes less than 10 minutes to complete. In addition to these tools, we offer other Energy Calculators and a Home Energy Library if you’re interested in learning more about specific topics.

your y and seal uate m o n o c e e q Weather th ventilation plus ade and d o ng wallet – go quals reduced heati e e. n m o o ti h r la insu r you fo ts s o c g coolin

This year we added a mobile version of our website, a real-time outage map, and TogetherWeSave.com. You can now access Union Power wherever you are by typing our web address into your smart phone’s browser. You can view our outage map from your mobile phone or on our website. You can also link to TogetherWeSave.com for even more tips and resources on energy efficiency. Options include videos, interactive applications, and an energy savings forum to encourage you to make small changes that add up to big savings.

Union Power Cooperative

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y t i c i r t c Ele t Value A Grea

Gary Biles, Customer Service Representative

Leading the Way in Value-Added Services Union Services, a Union Power subsidiary, offers HVAC and electrical services, heating and air conditioning sales, installation, repair, and maintenance. Is your heat pump on its last leg? Qualifying members can finance up to $7,500 toward the purchase of a new heat pump, and the payments can be conveniently added to your monthly electric bill. Union Services’ licensed electricians can do everything from changing out a breaker to completely wiring a new home. The Cooperative also offers an affordable electrical water heater maintenance program for your home. For only $3.99 a month, you can have peace of mind and coverage up to a maximum of $200 per calendar year for service and repair of problems with electric water heater elements, thermostats, breakers, and existing wiring, wall, and outlet switches.

tat to cheap Set your thermos the winter and ° in between 68° to 70 e in the summer. ng ra ° the 78° to 80

Jamie Taylor, Union Power also offers free in-home energy audits. Our energy specialists can provide a walk through inspection of your home, and with thermal imaging can take detailed pictures of where you may be gaining or losing heat. This free service includes a comprehensive report that shows steps you can take to save energy.

Underground Cable Installer IV

Managing your energy safely is important, too. Lightning is the most common culprit of powerful surges that can damage your sensitive electronic equipment, but accidents involving power lines or animals coming into contact with power line equipment can also cause voltage surges. It makes sense to protect your electronics with PowerGuard® Electrical Surge Protection. Financing is available for our members. Do you qualify for our all-electric rate? Is all energy required for water heating, cooking, clothes drying, and environmental space conditioning supplied electrically? Is electric heat installed and used as the primary or main source of heat, supplying the majority of your residence’s heating requirements on an ongoing basis? If your home meets all these conditions, call to inquire about the all-electric rate.

Spend a few minutes, save a lot – change your air filters regularly and hav e your HVAC system checked annually.

2011 Annual Report

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Misty McClellan, Engineering & Operations Customer Support Specialist, at Piedmont Flooring in Marshville.

Help your ENE RGY STA – get the mos R appliances shine t using efficient out of them by settings that ca n help save you money.

Leading the Way in Energy Efficiency At Union Power, we make every effort to be environmentally responsible, invest in renewable resources, and comply with state energy laws. The North Carolina Renewables Mandate requires that by 2018, electric co-ops must ensure that 10% of the energy sold is generated from renewable energy sources or energy efficiency programs. As a member of GreenCo Solutions, Inc., a not-for-profit organization formed in 2008 by 23 of the state’s electric cooperatives, we participate in joint wind and solar renewable energy projects. We are exploring ways these resources might best be harnessed to serve the electrical needs of our membership. During the past two years, we have mailed complimentary CFLs (compact fluorescent light bulbs) to our membership, encouraging you to replace incandescent bulbs with these energy-saving alternatives. In 2011, we mailed 110,000 bulbs to residential members, along with energy and cost-savings information. Many of our members are already reducing their energy use with CFLs. Making this one simple change in your home saves energy and money. We take pride in educating the next generation about energy efficiency. In our partnership with the Union County 4-H, we have outfitted a number of members’ homes with CFLs and energy efficiency kits containing water heater wraps, pipe wraps, low flow showerheads, and sink aerators. It’s the little changes that add up - estimated savings should average $45 per month, per home. Union Power is pleased to provide 4-H youth with this hands-on learning experience. Nearly every facet of our lives depends on electricity, and we know every penny counts. Our goal is to help you manage your energy and make small changes in usage behavior that can add up to big savings. We’re empowering you, because you are the most important part of our cooperative.

Union Power Cooperative

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GOOD HABITS START YOUNG.

2011 Annual Report

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Financial Info

as of December 31, 2010

WHAT WE OWN Assets: Original Cost of Our System We Estimate it Has Depreciated Net Value of Our Property Cash and Investment Reserves: Cash on Hand and in Bank Members Owe Us for Electric Bills Materials and Supplies on Hand Other Investments for Reserves Other Property and Prepaid Expenses Total Assets

$270,818,899 60,054,257 $210,764,642 11,769,258 9,982,197 1,622,295 313,260 509 $234,452,161

WHAT WE OWE Liabilities: Long-term Debt Notes Payable We Owe for Power, Material, & Supplies We Hold Consumer Deposits and Payments Total We Owe Membership Fees and Other Capital Patronage Capital Net Worth (Total Ownership in Co-op) Total Liabilities and Net Worth

$107,958,438 7,256,444 14,089,271 14,442,112 $143,746,265 0 90,705,896 $90,705,896 $234,452,161

WHERE THE MONEY CAME FROM Revenues: Sale of Electric Energy Non-Operating Income Total Revenue

$135,506,084 2,156,806 $137,662,890

HOW THE MONEY WAS USED Expenses: Wholesale Power Cost Operating Expenses Depreciation Expenses Taxes Interest Total Expense Net Margins

$87,179,327 21,192,951 8,477,930 4,353,306 6,216,912 $127,420,426 $10,242,464

Union Power Cooperative

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STATISTICAL HIGHLIGHTS 1990

2000

2010

Average Meters Billed

27,134

43,176

65,581

Total kWh Purchased

440,114,718

774,780,659

1,341,140.433

Monthly kWh Use per Residential Member

1,167

1,223

1,400

Miles of Distribution Line

3,400

4,571

5,525

Members per Mile of Line

8

10

12

12%

30%

45%

$39,110,220

$94,240,577

$210,764,642

$1,441

$2,183

$3,214

Total Assets

$47,915,374

$110,764,969

$234,452,161

Wholesale Power Costs

$21,591,000

$33,017,000

$87,179,000

$798,332

$1,508,110

$2,765,424

82

100

118

% of Distribution System that is Underground Net Investment in Plant Net Plant Investment per Member

Right-of-Way Maintenance Number of Employees

HOW YOUR DOLLAR IS SPENT

6¢ Cost of Power

64¢

Cost to Operate

14¢

Net Margins

Depreciation Cost

Cost of Borrowing Money

Taxes

14¢ 64¢

2011 Annual Report

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Monroe Corporate Office 1525 Rocky River Rd. North Monroe, NC 28110 Phone: (704) 289-3145 or (800) 922-6840 Fax: (704) 296-0408

Oakboro Office 474 S. Main Street Oakboro, NC 28129 Phone: (704) 485-3335 Fax: (704) 485-4725

union-power.com

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2011-10_UPC_AR  

2011 Annual Report A supplement to Carolina Country

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