Tri-CountyEMC

2007 ANNUAL REPORT

Converted 8,600 meters to the new TWACS automated meter reading system

Completed a new apparatus and meter shop at the headquarters in Gray

Completed a new truck storage and equipment building in Eatonton

Began work on an addition to the Eatonton District Offi ce

Recorded a new system peak demand in August of 96 MW

Worked safely with no lost time accidents since November 7, 2005

Generated 112,078,148 kWh in Green Power EMC sales since 2001

Reached $500,000 in Operation Roundup contri-butions in March of 2007

Received the 2007 Award of Excellence for the cooperative’s Web site

Introduced the convenience of automated credit card drafts

A year of challenge and change for Tri-County EMC saw growth, progress, and achievement, including these signifi cant highlights in the last twelve months:

“The only real constant is change.”

This phrase has taken on new meaning for Tri-County EMC’s members, board, and employees. For the past several months we have talked about a new “Challenge of Change” in our monthly newsletter. While our co-operative business model has and will remain constant,new challenges dictate that we must all change the waywe think about this tool called electricity.

Georgia has enjoyed an abundant supply of inexpen-sive, reliable electric power for more than twenty years. Our economy has fl ourished in this abundance. But rapidly growing energy needs and new environmentalemphases mean our industry must now concurrentlygrow generation assets with new construction while learning to use energy effi ciency as a “new” fuel.

There are some who contend that we don’t need new generating plants to meet growing demand. But to think that conservation alone will provide kWhs for the future is unrealistic. We can meet our future needs,while protecting our environment and our economy,by balancing new clean-coal technology, cost-effectivenuclear units, natural gas generation, innovative renew-able generation using materials available to us, and conservation to help manage load growth.

Tri-County EMC is constantly changing. New offi ce space and a new truck bay in Eatonton, a new appara-tus shop in Gray, the TWACS metering system, new electronic customer service options via the internet,and new energy effi ciency services and products are all examples of changes put in place to better meet your needs.

We work every day to embrace the latest ideas andtechnology to insure that we fulfi ll our mission of “pro-viding exceptional energy related services exceedingeach customer’s expectations while actively seeking toprovide innovative products and services.” To meet our goals in this “Challenge of Change”, we need you tojoin us in better utilizing electricity, the greatest energy of all.

Executive Message

(left to right) CEO C. Hill Bentley and Board of Directors

Chairman Tom Thompson, Jr. visit the site of the Eatonton Offi ce addition

“While our cooperative

business model has and will

remain constant, new challenges dictate that we

must all change the way we think

about this tool called electricity.”

The Tri-County EMC Board of Directors shown here inside thenewly completed Apparatus Shop in Gray. Putnam

County

JonesCounty

BaldwinCounty

BibbCounty

TwiggsCounty

WilkinsonCounty

JasperCounty

MorganCounty

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The cooperative’s board includes (L-R):Secretary Treasurer Tommy Noles �, Marion Nelson �, Sammy Hall �, Vice Chairman Brenda P. Green �, Mike Rainey �, Chester Mercer �, Chairman Tom Thompson, Jr. �, Dan Greene �, and Rev. Charlie Richardson �.

If 2007 were to be reduced to one issue, it would be simple—fi nd future capacity. Even in a year with record-setting summer heat, Tri-County and all of

Georgia’s cooperatives were easily able to meet the capacity demands of our customers. But a look into the future tells a different story. With high growth rates of new homes and the average monthly usage for exist-ing homes continuing to increase, Tri-County’s capac-ity needs steadily climb. In August, the cooperative’s system reached 96 MW, a three percent increase over the previous peak from 2005. Current projections show that Georgia’s electric cooperatives must nearly double exist-ing generation capacity by 2020. To meet those needs, Georgia will have to enter what would likely be the larg-est push for electrical construction in the state’s history.

In the past twelve months, Tri-County EMC announced the intention to participate in the construction of two new nuclear units at Plant Vogtle in Waynesboro, Georgia. But Tri-County’s share of these two new facilities will add less than ten percent of the new capacity needed by 2020. The cooperative’s staff continues to analyze other oppor-tunities, including new coal generation plants. However, it appears that new fossil fueled power plants will have considerable hurdles for permitting. But there are other options than building new capacity to meet these future needs. Tri-County has always supported energy effi ciency programs and provided educational in-formation to help our members get the most for their en-ergy dollar. Through Green Power EMC, the cooperative has been a leader in delivering Georgia’s fi rst renewable energy. A new portfolio of energy programs will be intro-duced in 2008, including a new energy audit program and

an emphasis on well sealed and insulated homes, energy effi cient lighting, and perhaps a direct load control pro-gram. “A new emphasis on effi ciency programs will help our members control their own energy usage while reduc-ing our system’s peak demand,” says Vice President of Energy Services Greg Mullis. “Effi ciency and conserva-tion start at home. By fi nding capacity for future growth without building anything, we can reduce operating costs to serve our members now and in the future.”

Central to Tri-County’s new push for energy effi ciency will be a theme of asking members to take the initiative in fi nding energy savings. As a customer-owned busi-ness, the success of the cooperative depends greatly on how we work as a team to address future growth. From on-site assistance to Web-based information and tools, Tri-County will work to make achieving effi ciency easier. “Our members have a vested interest in their electric cooperative,” comments CEO C. Hill Bentley. “All of us can fi nd energy savings in our home. Even in small amounts, the collective savings can make a real impact on future energy costs.” For example, by replacing just one standard 75W incandescent bulb in every home on Tri-County EMC’s system with a 20W compact fl uorescent lamp, the cooperative’s demand would be reduced by one megawatt, about one percent of the EMC’s total capacity.

While system growth has posed ongoing challenges, new programs implemented over the past few years have begun to bear great results. Most notable is an automated meter-reading system, TWACS (Two-Way Automated Communication System). The retrofi tting of 8,600 meters serving customers in northern Baldwin County and southeastern Putnam County will be completed in 2007.

Year In Review

This system offers power-line carrier based meter-reading and a host of other benefi ts, including outage identifi cation and restoration and theft of service detection. Thousands more meters will be retrofi tted in 2008 as this program is rolled out system wide.

New Tri-County EMC facilities will also mean better service to coop-erative members. A new Apparatus Shop was completed in Gray during the summer of 2007. The new facil-ity will provide a workspace for cooperative personnel to perform service and maintenance work on line apparatus, such as reclosers and regulators. The building also houses a new modern meter shop, where EMC staff will test and program the dozens of types of meters used on the Tri-County distribution system. In August, Tri-County broke ground on an addition to the Eatonton customer service facility. This ad-dition will increase available space for customer service and engineer-ing staff while adding a redundant control center to be utilized in the event of a catastrophic event at the headquarters control center in Gray as well as for system wide storm situations.

Finding better ways to service the cooperative’s members is a constant goal for Tri-County’s staff. As more people turn to the Internet for conducting business and gathering information, Tri-County continues to enhance our award winning Web site. The number of members pay-ing electric bills online continues to increase. In 2008, Tri-County will introduce a new e-bill program, eliminating the need for printed bills and providing electronic notifi cation that bills are available on-line the day they are generated.

Our Senior Staff: (left to right) Steve McClendon, VP/COO;

Beverly Smith, Administrative Assistant; Greg Mullis, VP of Energy Services; and Dawn Haskins, VP/CFO.

Year In Review

Baldwin County Citizen Advocacy $1,500Baldwin County 4-H 980Boy Scouts of America, Pack 32 1,000Boys and Girls Club of Jones County 800Boy Scout Troop 310 2,000Central Baptist Church* 2,875Central Georgia American Red Cross 2,000Changing Stations Ministry* 2,800City of Gray Volunteer Fire Department 2,500Community Health Foundation* 2,578Compassionate Care Clinic, Inc. 1,800Eatonton/Putnam Arts Foundation, Inc. 2,500Exchange Club of Jones County* 3,795Ferst Foundation for Childhood Literacy 1,000Georgia College & State University 2,500Georgia College & State University GIVE Center 2,800Habitat for Humanity of Putnam County* 3,000Hope Missions* 2,500Jasper County High School FCCLA* 1,000

Jones Area Council on Relief, Inc. (JACOR) 2,500Jones County Bicentennial Steering Committee 1,000Jones County 4-H 1,500Jones County 4-H SAFE Shotgun Team 600Jones County Fire/Rescue Station #5 550Make-A-Wish Foundation of Georgia* 5,000Maranatha Outreach, Inc. 3,000Maynard Baptist Church* 5,000Milledgeville First UMC River of Life 2,500New Damascus Baptist Church* 4,000Oconee Valley American Red Cross 2,100Operation Roundup Foundation Scholarships (8)* 4,000Putnam County Bicentennial Committee 1,000Putnam County Family Violence Task Force, Inc. 1,000Putnam County 4-H Club 2,500Total: $76,178

* denotes application on behalf of an individual(s).

In 2001, Tri-County EMC introduced Operation Roundup by asking our members, “How will you help.” In March of 2007, Operation Roundup reached $500,000 in contributions, an emphatic answer to our call for help. With the average participating customer voluntarily contributing just fi fty cents per month, reaching the half-million mark in six years seems impossible, but clearly demonstrates the power of the cooperative principles at work.

One hundred percent of the Operation Roundup funds benefi t organiza-tions and individuals here in Tri-County EMC’s service territory. And these funds touch lives. “I’m just so grateful to be in this new home,” says Rose Martin. In 2007, Operation Roundup helped to fund the construction of her new Habitat for Humanity home in Eatonton.

The following organizations received funds from the Tri-County EMC Foundation since September 2006.

Operation Roundup

Dennis Eubanks, Construction Committee Chairman, Habitat for Humanity of Putnam County; homeowner Rose Martin; daughter Tara Martin; and

Erlene Kirwen, President, Habitat for Humanity of Putnam County.

Tri-County EMC is audited by the independent accounting fi rm of McNair, McLemore, Middlebrooks & Co., LLP. A complete fi nancial statement may be obtained by calling Tri-County EMC at (478) 986-8108 or 1-866-254-8100, ext. 8108.

Statement of Operations (for the year ended April 30)

Operating Revenue and Capital $34,275,584 $31,488,077 Operating Expense Cost of Power Purchased 22,600,462 21,068,138 Operating the Electric System 5,634,407 5,160,719 Depreciation 2,365,676 1,982,652 Interest on Loans 2,500,759 2,342,232 Total Cost of Electric Service 33,101,304 30,553,741 Patronage Capital and Operating Margins 1,174,280 934,336 Non-Operating Margins 6,798 28,068 G&T Capital Credits 331,543 331,656 Other Capital Credits 147,154 139,636 Total Patronage Capital or Margins $1,659,775 $1,433,696

2006 2005

1960 $7.60

1970 $11.78

1980 $41.43

1990 $72.28

2000 $91.05

2005 $107.87

2006 $118.52

1960 319

1970 576

1980 755

1990 873

2000 1,121

2005 1,225

2006 1,229

2.391960

2.311970

5.551980

8.211990

8.122000

8.812005

9.642006

Residential Cost Per kWh (cents)

Average Monthly Residential kWh Usage

Average Monthly Residential Bill

Financial Summary

Balance Sheet (as of April 30) Assets Total Utility Plant $79,597,098 $73,107,297Less Depreciation 13,067,306 11,921,349Net Utility Plant Book Value 66,529,792 61,185,948 Investments in Associated Organizations 8,560,420 8,195,587 Cash and Reserves 556,124 451,058 Owed to EMC on Account and Notes 1,825,775 2,115,985 Material in Inventory 501,569 427,936 Expenses Paid in Advance 33,184 27,963 Deferred Debits and Other Assets 370,163 432,276 Total Assets $78,377,027 $72,836,753 Equities and Liabilities Consumer Deposits $860,520 $796,840 Membership, Patronage Capital, Other Equities 25,089,520 23,466,843 Long-term Debt 45,097,518 41,404,796 Notes and Accounts Payable 6,279,569 6,191,766 Other Current and Accrued Liabilities 857,142 792,472 Non-current Liabilities 192,758 184,036 Total Equities and Liabilities $78,377,027 $72,836,753

200520061960 3.50

1970 4.50

1980 5.60

1990 7.00

2000 7.84

2005 8.08

2006 7.98

1960 3,055

1970 4,783

1980 8,090

1990 12,580

2000 17,185

2005 19,695

2006 20,049

OperatingCosts

MarginsPowerCosts

13.74%

15.16%

7.79%

Interest &Depreciation

63.31%

Meters Per MileOf Line

Total Number of Accounts

Where Your EnergyDollar Goes

P.O. Box 487Gray, GA 310321.866.254.8100478.986.8100www.tri-countyemc.com

Tri-County ElectricMembership Corporation