Powering Our Communities Since 1936

2012 Annual Report Gibson Electric Membership Corporation 速

Your Touchstone Energy Cooperative 速

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Turning the gears of progress eventy-six years ago, rural Northwest

dertaking is to power our commu-

Tennessee had a critical need for elec-

nities and empower our members

S

to improve the quality of their lives.

trical infrastructure. It’s possible that

We know that working together en-

members of your family put the gears into motion that formed the electric coopera-

ables us to accomplish big and

tive that is now Gibson Electric Member-

meaningful things. In this an-

ship Corporation. Those smart and hard-

nual report, we will highlight

working pioneers knew the coopera-

some of the things that we

tive’s not-for-profit business model of

have accomplished both

member ownership and member

within our cooperative

control offered the power to

and within our Northwest

better their communities. They

Tennessee communities.

were right. Together, we —

During 2012, Gibson

Gibson EMC’s members —

EMC’s board of trustees

have met that need.

and employees implemented a number of pro-

In 2013, your electric cooperative provides power for more than 35,000 members in eight Northwest Tennessee counties. But our work is far from finished. Gibson EMC’s board of trustees and its employees are relentlessly working to keep your

grams and incorporated

Gibson Electric Membership Corporation powers communities in parts of eight North- several new technologies to west Tennessee counties. e locations of better serve you. In keeping Gibson EMC offices are highlighted. with our broader purpose,

electricity affordable and reliable, to help you use energy

we also devoted time and resources to support our existing

as efficiently as possible, and to make your business experi-

industry, recruit new jobs to our area and otherwise en-

ence with us easier and more convenient. Our broader un-

hance the quality of life in our communities.

At left, Gibson EMC lineworkers replace poles broken by high winds. On the cover: First Class Lineworker Trent Cary restores service to members during an outage. 3 3

Using innovation and technology w In partnership with TVA, Gibson EMC launched a demand control pilot program called USave. We call

larity in 2012. This alternative to traditional billing en-

the program USave

ables members to closely monitor their

because it helps

energy use on a daily basis and eliminates

members save en-

the need to pay a deposit when signing up

ergy dollars; it

for new service. Daily usage can be

helps hold down

checked by e-mail and Gibson EMC’s Auto-

energy costs for the

mated Phone System; and low account bal-

entire membership;

ance alerts can be received via text and

and it helps protect

automated phone messages. PAY-Go mem-

our environment.

bers also can obtain daily balance informa-

Participants are provided new tools (including a free, state-of-the-art, remote-controlled,

Tony Jones, owner of Jones Telecommunications, is a USave participant. He likes the convenience of a programmable thermostat, he says, and the ability to remotely control his business’ thermostat with his smartphone app.

programmable thermostat with free professional installation — a $250 value — and a smart phone/tablet

tion via text, and payments can be made using cash, check, Check by Phone or debit and credit cards. Members tell us they like PAY-Go because it helps them use energy more efficiently.

w We also enhanced our Meter Data Management

app) for managing their energy use. USave is a win-

and Automated Metering infrastructure. Gibson EMC is

win for the participant and for Gibson EMC’s entire

among the first in the country to use this meter specific

membership because it helps all of us to more effec-

data for system improvement planning; this application

tively manage energy costs by shaving peak demand. w Gibson EMC enhanced its Automated Customer Service System. Now you can easily make payments,

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w Pay-As-You-Go (PAY-Go) gained even more popu-

will allow us to enhance system reliability and allocate our system improvement dollars more efficiently and effectively. These integrated systems enable us to provide members with information about daily energy usage

check your account information and update your con-

and historical usage. With this current and detailed in-

tact information by telephone or through our website

formation, members can more easily identify energy ef-

(gibsonemc.com).

ficiency problems and improve energy efficiency.

At right, Gibson EMC and TVA officials join Gibson County High School officials, as well as local and Tennessee political officials, for a solar dedication at the high school.

to deliver superior service … w Gibson EMC partnered with TVA to provide the In-Home

w Local solar projects gained momentum in 2012. Gibson

Energy Evaluation program to help residential members with

EMC was proud to partner with the Gibson County Special

energy efficiency. At a member’s request, a Gibson EMC

School District and TVA in coordinating a 19.7-kilowatt solar

evaluator assesses a home’s energy efficiency and makes

installation at Gibson County High School. The installation is

recommendations for improvements. Members who make the

supplying clean, renewable energy to Tennessee Valley con-

recommended improvements using a certified Weatheriza-

sumers as part of TVA’s Green Power Switch program. It also

tion Quality Contractor are eligible for reimbursement of 50

helps educate the high school students about renewable

percent of installation costs (up to a maximum reimbursement

solar energy production. In Medina, a group of students from

of $500), plus a waiver of the $75 evaluation fee. Since this

Tennessee Technology Center’s green technology program

program was first offered in 2009, we’ve performed more

had the opportunity to assist with another solar installation.

than 300 energy evaluations and our members have re-

Like the solar panels at Gibson County High School, this in-

ceived more than $100,000 in reimbursements for energy ef-

stallation also is supplying renewable energy to TVA con-

ficiency improvements to their homes.

sumers through the Green Power Switch program.

Continued …

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Using innovation… w Gibson EMC members are benefitting from another Gibson EMC/TVA project — the study of an ExtendedRange Electric Vehicle in a rural setting. This study will help us understand how a plug-in electric vehicle is typically driven and charged, and how it performs in rural Northwest Tennessee. Moreover, the study will help TVA and cooperatives to better understand the potential impacts plug-in electric vehicles have on electric utilities, and by extension, our membership. w EnergyRight® Solutions for Business and Industry, offered jointly with TVA, benefitted many of Gibson EMC’s commercial and industrial members by providing incentives for energy-efficient upgrades to lighting, HVAC, motors and kitchen equipment. Favorable returns on investment and long-term energy savings are important to our local businesses as they work to improve their bottom lines. EnergyRight Solutions is one of many programs offered to our valued commercial and industrial customers. w Substantial improvements were made to Gibson EMC’s physical electric system during the past year. One of the more significant improvements included the completion of a project within the Trenton substation, which will increase service reliability to members in the Trenton and Kenton areas. During 2012 and 2013, we also will spend about $3 million on the Bells, Tiptonville and Maury City substations to provide system redundancy and, therefore, enhanced reliability in all of these areas.

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At right, Gibson EMC employees install equipment at the Tiptonville Substation that will protect the new power transformer, which will be installed later this summer.

w As mentioned earlier, keeping rates af-

w Because we value you, we systematically

fordable is a top priority for Gibson EMC.

survey our residential members and our com-

Although TVA’s 2011 rate changes shifted

mercial and industrial members. This was the

much more pricing risk to Gibson EMC and

year to survey our C&I members. They gave

our membership, we are pleased to report

us an American National Standards Institute

that because of our Automated Metering Infra-

score of 87, four points higher than the scores

structure, our Meter Data Management Sys-

of other Touchstone Energy cooperatives

tem and our rate structure (which rewarded

across the nation and 11 points higher than

those who could avoid Gibson EMC’s system

those of other U.S. energy utilities. We sin-

peaks), our large commercial and industrial

cerely appreciate the feedback our C&I mem-

customers have saved more than $3 million

bers provided and will use it as a guide for

since its inception.

serving you better going forward.

w This past year our cooperative was

w Besides an interactive website, Gibson

awarded reaccreditation in the Rural Electric

EMC also has a Facebook page and a Twitter

Safety Achievement Program, a distinction en-

account. We are using these social media

joyed by only 13 electric cooperatives in Ten-

platforms because they allow us to communi-

nessee. Gibson EMC has been accredited

cate with you in real time. Now you can visit

since 1993, and must undergo a rigorous

our Facebook page and sign up to follow us

evaluation every three years to help assure

on Twitter to receive the most up-to-date infor-

that we maintain the highest safety standards

mation about outages, program offerings and

possible. On a

much more. Of

related note,

course, we en-

we’re proud to

courage you to

report that our

use our website,

Troy customer

too. It’s a great

service center

source of informa-

employees com-

tion, and it

pleted 2012

provides a con-

without a lost-

venient way to

time accident.

pay your bill.

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Delivering on our commitment to w In Fall 2012, Gibson EMC hosted a member ap-

w Gibson EMC made a $5,000 charitable donation

preciation event at our local customer service centers.

to the Tiptonville Main Street Association, which along

These informal gatherings provided Gibson EMC board

with a $5,000 CoBank “Sharing Success� Grant, will

members and employees an opportunity to thank mem-

provide the match needed for a $50,000 federal grant

bers for their business and support, while it gave mem-

application. When funded, the grant will launch Phase 1

bers the opportunity to learn about our new programs

of a $100,000+ project to provide the historic Strand

and services.

Theatre, owned by the Main Street Association, with sound, lighting, camera, computer and projection equipment; broadband connectivity; stage curtains; and support services. These improvements will allow the multi-purposed theater to provide educational, meeting/presentation and distance learning/teleconference opportunities; and to offer a needed venue for cultural and entertainment events.

Pictured, left to right, are Tiptonville Main Street Board Members Fran Hearn and David Perkins, Gibson EMC President and CEO Dan Rodamaker, Gibson EMC Vice President of Economic Development Emily Sullivan, Main Street Executive Director Marcia Perkins Mills, Main Street Board Member Daisy Parks and Tiptonville Mayor Danny Cook. 8

In conclusion … hether adding new technology, services or programs; strengthen-

W

ing our physical electric system; or supporting our communities,

our focus is always on you, our member-owner. Working cooperatively, Gibson EMC’s members, our board of trustees and our employees have generated powerful progress for our Northwest Tennessee communities. Together, we will continue turning the gears of progress in

community…

w This year we also were pleased to help Advan-

tage Manufacturing of Friendship with a muchneeded expansion by loaning the employee-owned plastics plant $1 million at zero interest. This was made possible by a USDA Rural Economic Development Loan that was first made to Gibson EMC and then passed through to Advantage Manufacturing. This expansion will help to bring more jobs to Crockett County. We also funded a $287,572 Rural Economic Development Loan to Obion and Weakley counties for runway improvements to Everett-Stewart Regional Airport near Union City. w Gibson EMC continued to provide support through the commitment of time and other resources to the Port of Cates Landing and the adjoining Intermodal Regional Industrial Park projects. This year, we also built electrical infrastructure leading into the Port.

2013 and beyond.

Pictured, at top left, Advantage Manufacturing Inc. President Wanda Rea accepts a resolution from USDA Rural Development State Director Bobby Goode in recognition of 19 years of job creation and retention in Crockett County. Pictured, from left, are Casey Burnett, Gary Reasons, Craig Fitzhugh, Harriet Cannon, Blake Swaggart, Goode, Matt Varino, Rea, Jennifer Weems, Tony Bargery, Mack Goode, Scott Golden, Bob McCurdy, Larry Hicks, Bob Fein, Rana Buchanan, Joan Mouser, Dan Beasley, Emily Sullivan, Dan Rodamaker and Barry Smith. Although not unique to 2012, your cooperative continued its long-standing tradition of supporting our schools and communities with youth leadership, scholarship, safety and adult leadership programs. Pictured, below, at the FDR Memorial are local students we sponsored on the 2012 Washington Youth Tour. ey earned the trip by writing winning short stories. ey are, left to right, Erin Noel, Dantavius Swift, Sara Tittle, Zach Cole, Morgan Walker and Alison Jenkins. 9

The Financial Statement Gibson Electric Membership Corporation is an electric cooperative owned by its members. Its service area includes parts of Crockett, Dyer, Gibson, Lake, Madison, Obion, Haywood and Lauderdale counties.

Revenue

Electric Plant................................ $132,429,133 Depreciation ............................... $(55,531,977) Net Plant ..................................... $76,897,156 Reserve & Cash Fund .....................$16,694,820 Current & Accrued Assets ............... $11,934,722 Deferred Debits .................................. $164,363

Gibson EMC received Residential $81,924,494 in revMembers: 60¢ enues in the fiscal Commercial & year that ended DeIndustrial cember 31, 2012. Members: 37¢ Our revenues came Miscellaneous from several sources: Income: 3¢ residential members, industrial members, commercial members and miscellaneous income, such as outdoor, street and athletic lighting.

Total Assets ......................... $105,691,061

Liabilities Current & Accrued Liabilities ........... $9,293,254 Deferred Credits ..................................$631,048 Membership Investment ..................... $250,396 Long-Term Debt ............................. $26,099,850 Earnings Reinvested In System Assets... $69,416,513

Total Liabilities ................... $105,691,061

Revenue & Expense Statement Operating Revenue ....................... $81,924,494 Purchased Power Expense .............. $61,464,028 Operation Expense ......................... $7,494,104 Maintenance Expense ..................... $3,849,434 Depreciation Expense ...................... $4,485,523 Tax Expense ................................... $1,164,000 Net Margin from Operation ...... $3,467,405 Non-Operating Income .................... $2,269,411 Interest Expense .............................. $1,597,195 Net Margin.................................. $4,139,621

Capital Investment 10

2012 Revenue (Per $1)

Assets

After meeting expenses, the net margin of $4,139,621 was used to reinvest in your electric system.

Expenses

2012 Expenses (Per $1)

Purchased Power Gibson EMC buys from TVA: 77¢ power from the Tennessee Valley AuConstruction, thority. In the fiscal Maintenance & Administration year that ended DeExpenses: 23¢ cember 31, 2012, we spent about 77% of our electric sales revenue to pay our TVA power bill. The other 23% was used for operations, depreciation, maintenance, interest and taxes and capital investment.

Auditor’s Statement: Gibson EMC’s books are audited annually by the firm of Alexander, ompson, Arnold, PLLC, Certified Public Accountants, Union City, Tenn. Copies of the audit report are on file at Gibson EMC’s Corporate Office, 1207 S. College St., Trenton, Tenn., 38382.

Gibson EMC Board of Trustees, President and CEO, and Attorney

Steve Sanders, Vice Chairman District 1

Keith Heglar, Assist. Secretary-Treasurer District 2

Bob McCurdy District 8

Tony Bargery District 3

Larry Hicks District 4

Keith Forrester District 10

Richard Skiles District 9

Mack Goode, Chairman District 5

Joan Mouser District 6

Don Leathers, Dan Rodamaker, Secretary-Treasurer President and CEO District 11

Rana Buchanan District 7

Jim Ryal, Attorney

Statistical Information

2010

2011

2012

Ad Valorem Taxes

Number of Meters

34,735

34,696

34,674

Member Equity

$60,670,044

$65,276,892

$69,416,513

Long-Term Debt

$26,377,341

$27,176,029

$26,099,850

Each year Gibson EMC pays ad valorem taxes to the towns and counties in which the cooperative has facilities or infrastructure. The amount of taxes paid is based on the assessed value of the infrastructure, including buildings, substations, transformers, poles and lines. The 2012 ad valorem taxes paid to counties were‌

Interest Paid Total Kilowatt-Hours Sold Average Monthly Residential Kilowatt-Hour Consumption Number of Full-Time Employees Meters per Mile Miles of Line Investment per Meter Taxes Paid Wholesale Power Cost as % of Electric Sales Revenue

$1,754,572

$1,755,817

1,597,195

892,516,771

838,267,504

802,820,120

1,534

1,430

1,325

85

85

85

12.2

12.2

12.2

2,844

2,844

2,851

$3,546

$3,692

$3,686

$1,090,730

$1,106,079

$1,164,000

77%

77%

77%

Crockett ..................................................$226,170.06 Dyer .........................................................$29,791.00 Gibson ....................................................$486,020.88 Haywood ....................................................$1,246.22 Lake .........................................................$93,306.00 Lauderdale ......................................................$36.00 Madison ...................................................$31,043.00 Obion .....................................................$288,821.73 TOTAL.........................................$1,156,434.89

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