In 10 years, the cooperative has grown 40 percent. We continue to add new technology and programs to better serve our customers.

I remember a time when car phones were kept in a leather case and fit under the seat, the majority of computers sat on desks rather than laps, video games were played with friends in the same room and movie rentals were available in VHS only. When I tell my grandchildren these "tall tales," they find it hard to believe I'm speaking of the '90s not 1890s but 1990s. A lot has changed in the last decade.

Randall Pugh, President/CEO

Today, people carry their cell phones in their pockets or even attach them to their ears, nearly 40 percent of households use laptops, young people in America can play video games with their friends in Asia and movie rentals are available on DVD, MP3 or downloaded off the Internet. Oh, and we now speak of the Internet the way we spoke of encyclopedias — anything you need to know, look it up at the touch of a mouse. Many things have changed to make life easier for society today, and the same is true for your cooperative. We're still delivering reliable, affordable power and customer service remains a top priority; however, we've had some changes along the way.

Growth

Jackson EMC is one of the largest EMCs in the country, serving nearly 196,000 meters. In 1996, we only served 118,000 meters — that's a 78,000-meter difference in only 10 years. This year alone, we've strung an additional 536 miles of energized wire, upgraded 42 miles of existing wire and increased the number of substations that bring power into local neighborhoods to 70. To accommodate our growth and ensure reliable service, new substations were built in East Hall, Gwinnett and West Barrow. We now have a total of 12,669 miles of energized wire.

In 10 years, the cooperative has grown 40 percent, and for the first time in our history, this summer's peak summer demand reached one gigawatt — that's member demand for more than one billion watts of power at one time.

In the electric utility business, we can't wait to see how growth will impact our cooperative; we have to be proactive to ensure we have the resources to serve our growing communities. One area of focus is outages. It's a word none of us like to hear, and usually, thanks to Mother Nature, outages are often beyond our control. However, what we can control is our training and ability to quickly restore power when outages occur.

We've built redundancy into our distribution network by linking substations. When outages or storms come, supervisors will be responsible for restoring specific areas throughout our service territory, field service representatives will scout damage in their smaller trucks and report back and office personnel will continue training for handling outage calls. We were hit with an unexpected ice storm last year, and from that our staff learned some valuable lessons and immediately began these plans to ensure we are more than prepared for the next storm.

New Corporate Office

Having shared office space with Jefferson District for many years, Corporate offices will now have a space of their own. Both district and corporate shared the current building since 1992, and, at that time, we handled the needs of 98,099 members with 343 employees throughout our districts. Today, we have 444 employees, 229 of whom work from Jefferson to serve our 196,000 meters. We simply outgrew our current space. Construction finished in late August, and our tentative plan is to be completely moved in this month. Located next door to the district office, the new building will provide more training and meeting room space in addition to much needed office space.

Comprehensive Emergency Restoration Plan

Next month, our expanded Emergency Restoration Plan will be put to the test with an exercise to be sure it benefits how we continue to deliver service to you. The plan identifies a step-by-step process to respond to and recover from a crisis. There are two main sections in the plan, system restoration and business continuity. Each section has a set of processes that each employee must be familiar with. Preparations for natural disasters like tornadoes and floods, as well as terrorism or chemical spills are addressed in the plan. The cooperative should be prepared to carry on with business in the midst of a disaster, so things such as bill generation, customer account services, etc. will continue.

Technology
Outage Management System

Our new state-of-the-art Outage Management System will work with our other systems to make outage identification faster and more accurate than our old system. Installed in August, the system interfaces with the GIS mapping technology and Supervisory Control and Data Acquisition (SCADA) system already in place. With the capability to automatically map outages based on customer calls, outages will be recorded for everyone affected in a neighborhood once we receive the first call.

Broadband Over Power Lines (BPL)

BPL technology is one of the newer ways of providing high-speed Internet access. We're evaluating this technology to see if it's technically and economically feasible to send broadband data over our power lines. This would allow communities not served by other high-speed access like telephone and cable companies to have high-speed Internet service. The pilot program will last through the first of next year, after which we'll evaluate our results.

Right Choice™

Using the latest technology guaranteeing new homes are comfortable and energy-efficient, the Right Choice™ program meets Georgia's strict energy and building code requirements. A series of inspections and tests are conducted throughout construction. A one-year comfort warranty guarantees temperatures in each room stays within three degrees of the thermostat setting. Right Choice homeowners are also covered by a three-year energy warranty, which guarantees that the energy used to heat and cool the home will be below a specified amount each year. We're so sure that buying a Right Choice home is the right choice; we even offer our lowest residential electric rate.

EMC Security™

Offering home safety and the latest in technology, EMC Security is a one-stop shop for security and home theater systems, central vacuum systems and more. The advanced technology wiring allows members to customize their home technology needs. Services can be bundled or separated, and you have the convenience of paying your monthly security service on your bill. As technology becomes more advanced, we are confident in our security company whose products and services are designed to meet your needs.

Taking Care of the Environment Green Power

Jackson EMC members are supporting clean, renewable energy resources when they support Green Power EMC. Replacing the equivalent amount of traditional power in the electric system, each 150-kilowatt block of green energy becomes part of the total power mix. Members pay an additional $4.50 a month for each block of green energy.

Now, Green Power may have found a unique solution to two challenges facing Northeast Georgians — getting more environmentally friendly energy and disposing of poultry wastes. Green Power EMC's poultry litter-to-energy process will turn chicken litter into an odorless ash that's granulated and added to the soil to provide nutrients. Another benefit is that a chicken litter power plant has lower emissions than typical power plants. In addition to chicken litter, Green Power is also exploring wind generation. A 196-foot assessment tower in Northwest Georgia is gathering data to help us determine if wind generation is a possibility for Green Power.

Sun Power for Schools

Green Power made great strides this year, introducing our territory's first Sun Power for Schools program at Mill Creek High School in north Gwinnett County. Jackson EMC sponsored the installation of photovoltaic and metering equipment, which lets students study solar-power generation.

Members Together Make a Difference: Operation Round Up®

A month shy of its one year anniversary, Operation Round Up® (ORU) was introduced last October as a way to put our cooperative principles to work in our communities. Members who participate have their bills rounded up to the next dollar amount, and the spare change is put into the Jackson EMC Foundation. Over 90 percent of our members are participating, and together they have contributed nearly $700,000 to benefit 53 area organizations and 16 individuals. As members, you are to be commended for the wonderful difference you're making in your communities and other members' lives. Just a few cents a month quickly adds up when combined with everyone else.

Times May Change

At Jackson EMC, our goal is to keep improving our service to you, and finding new and better ways to meet your needs. Time brought about many changes over the last decade, and we've proudly offered a variety of services and products as your needs changed. We don't know what the next 10 years will bring, but we're confident we'll be here with the power to meet your needs as the changes come.

Randall Pugh
President/CEO

Jackson Electric Membership Corp. Balance Sheets

Statements of Revenue and Patronage Capital