“we’re doing our part to - jackson emc · our goal of upgrading all 200,000 meters we serve in...

weathering the storm : Annual Report 2009

“We’re doing our part to

help turn around the economy

in the communities we serve.”

ur challenge this year has been

weathering storms on a wide

variety of fronts. Whether it was the

heavy weather of recession, which drove

down membership and sale of electrici-

ty; or the gathering cloud of proposed

new energy legislation, which threatens

to skyrocket power bills; or the real sort

created by Mother Nature, which may

have been the quickest and easiest of all

to handle.

Through it all, Jackson EMC’s sen-

ior management, its board of directors

and its employees steered a steady

course with the determination they

have always had - providing our mem-

bers with the best service possible and

ensuring them reliable electricity at a

reasonable price.

the perfect economic storm

Like those we serve, we’ve felt the

recession’s sting. Beginning in 2008,

we watched as the rapid residential and

commercial growth our region has

experienced over the past decade slow

to a standstill. Used to welcoming

several thousand new members each

year to our cooperative, we experienced

for the first time in our 70 year history

a net loss of members. It was a ripple

effect from business closings, vacated

apartments, idle speculative housing

and home foreclosures. Since our

members own the cooperative and

share its cost, a shrinking customer

base meant costs were shared by fewer.

At the same time, kilowatt hour sales

declined. While power consumption in

homes remained level, commercial and

industrial use dropped significantly as

major customers closed their doors and

others cut shifts or operating hours,

or simply responded to a drop in

customer traffic. A reduction in the

amount of kilowatt hours sold meant

less revenue coming in to meet operating

costs that are not shrinking, including

the rising cost of power generation.

Compounding the economy’s

impact were the costs of distribution

system repairs from a March snowstorm

that cut off power to nearly every

member in Madison County and an

April windstorm that left some 30,000

members in Jackson and Gwinnett

counties powerless. Snowstorm with-

standing, Northeast Georgia enjoyed a

mild winter. And this summer’s cooler

weather has not created the peak use

we normally experience.

The impact to the cooperative has

been what you might call a perfect eco-

nomic storm.

Beginning last fall with budgeting

for 2009, we’ve taken prudent steps to

tighten our belt. We’ve reduced our

expenses by instituting a hiring freeze,

eliminating most travel, finding ways

to do business smarter and cutting

expenses in every area of the cooperative.

Like the businesses and households we

serve, we’re closely cutting back spending,

eliminating all but essential activities

and making every dollar count.

We know our members are in the

same boat. Some of them have felt the

economy’s impact through layoffs and

foreclosures. I’m sure all have felt the

resulting uncertainty. Knowing that

they’re closely watching their own

budgets, we’re proud to provide them

with a variety of tools - energy audits,

online programs, efficiency tips, services

and products - that they can use to make

wise energy choices for their home.

annual report 2009 [ 1 ]

a message from ourpresident/ceo

jackson emc annual report 2009

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[ 2 ] annual report 2009

On the business front, we have sig-

nificantly increased the number of

commercial energy audits we conduct,

helping several large customers retrofit

their lighting to achieve substantial

savings. We’re also providing manufac-

turers with infrared scans of large

electric motors, a costly service if they

had to purchase it.

In addition, we’re doing our part

to help turn around the economy in

the communities we serve. By working

shoulder-to-shoulder with state agen-

cies, technical colleges, Chambers of

Commerce and economic development

organizations, we’re helping keep exist-

ing businesses and plants open, as well

as attract new industry and jobs to the

area by ensuring Northeast Georgia has

an attractive business climate.

legislating a new reality

While we’re doing everything in our

power to be more efficient and cost-

effective, Congress is headed in the

opposite direction. The House has

already passed and the Senate is con-

sidering the American Clean Energy &

Security Act of 2009 (ACES), sweeping

energy legislation that will impose stan-

dards for renewable power generation

and drastically limit carbon emissions,

not just by utilities, but all manufacturers.

Under the guise of improving the

environment and promoting renewable

energy, ACES has proposed standards

that there is no existing technology to

support and devised a scheme of penal-

ties for not meeting those standards

that amount to a blatant tax on

Americans.

Our ability to meet the future

demand for electricity at a cost our

members can afford is seriously threat-

ened by ACES. In my 40 years of

electric industry experience, there has

never been a more ill-conceived piece

of energy legislation - one that our

members and consumers throughout

the country will pay dearly for many

years into the future if it is passed

unchanged by the Senate.

This proposed new energy legisla-

tion could literally create a new reality

in American life. At a time when we

need lower prices and more jobs to

bolster the economy, ACES would

drastically increase electric rates. Those

prices would turn what has been

considered a basic service into a luxury

for many consumers, drive up prices

for manufactured goods and send

more jobs overseas to countries that

refuse to implement the same air quality

standards.

Even though our growth has

temporarily slowed, we must continue to

plan for the future, for a time when the

recession will give way to growth. The

only way we can ensure our members

will have reliable, economically priced

power is to maintain a balanced portfolio

of generation resources. What the

situation calls for is a balance in our

role as good stewards of your money

and the environment. While we are

proud to be a founding member of

Green Power EMC, we must continue

to seek out a variety of generation

resources to satisfy energy demands

and provide for the ever-increasing

energy needs of the not-too-distant

future.

We have been, through our

statewide and national organizations,

fighting to ensure that any energy

legislation passed will be fair to our

members and keep the power they

depend upon affordable. And we’ve

been gratified to see other organiza-

tions, like the Georgia Chamber of

Commerce, join in opposition to this

legislation.


getting on with business

When the weather is stormy, it’s easy

to get distracted from the business at

hand. But since our lines were first

powered 70 years ago, without devia-

tion, our focus has been on serving our

members. It’s what gets us up in the

morning - and sometimes keeps us up

at night.

Even in the face of tough challenges,

this past year will be memorable to

everyone at Jackson EMC because of

the recognition given to us by our

members.

Thanks to members’ response to a

first-ever survey of mid-sized utility

customers, our cooperative was ranked

highest in customer satisfaction among

midsize utilities in the South, as well as

all utilities nationwide, in the presti-

gious 2008 J.D. Power and Associates

Electric Utility Residential Customer

Satisfaction Study.

Later in the year, we received word

that members in Gwinnett County had,

for the second year running, voted

Jackson EMC one of Gwinnett Magazine’s

best companies for customer service.

Our Jackson EMC family is honored

and humbled by this acclaim. As we

have in the past, we will always work to

provide the best possible service.

A part of maintaining that service

is continuing to improve efficiency and

reduce costs, which helps us keep

electric rates affordable. This year we’ve

accomplished that by implementing

some important new programs, including

automated metering technology.

Following a test-launch in January,

we began a two-year rollout of our

Advanced Metering Infrastructure

(AMI) program. We currently have

more than 15,000 Smart Meters in

service and are adding an average of

6,000 per month, a rate that will meet

our goal of upgrading all 200,000

meters we serve in three years.

These Smart Meters are already

saving time and money. Remote meter

reading allows us to resolve billing

questions quickly and easily with one

phone call, and obtain accurate readings

from meters that are difficult to access

in person. In the event of an outage,

Smart Meters notify us that power has

been restored, eliminating the time our

employees previously spent contacting

individual customers to verify power

restoration. We’re conserving important

resources, too, by reducing the number

of vehicles on the road manually reading

meters, and by retraining meter reading

personnel to install Smart Meters.

waiting for the weather to clear

Like good sailors, we have to rig for

rough weather and keep an eye on the

horizon for clearer skies. Real estate

experts report that home sales are

beginning a slow climb, which could

result in membership gains for us, even

though we expect those gains will be

modest for some time. Signs of a turn-

around have been seen in some businesses

sectors, but signals are mixed on

whether foreclosures and layoffs have

bottomed out. I’m sure you join me in

hoping that small signs of economic

recovery are really the beginning of

smoother sailing. In the meantime,

Jackson EMC will continue steadily on

its course of providing the services our

members need and looking out for

their best interests.

Randall Pugh

President/CEO

“We’re proud to provide our members with a

variety of tools — energy audits, online

programs, efficiency tips, services and

products — that they can use to make wise

energy choices for their home”


offering shelter to our members

he stronger the economic winds blow, the more important

Jackson EMC’s support becomes to both our residential and

commercial/industrial members. During a time when the future holds

such uncertainty, when paychecks are held close and budgets are closely

scrutinized, the wise use of energy resources becomes a more serious issue.

We have been fighting to ensure thatany energy legislation passed will be fair

to our members and keep the powerthey depend upon affordable.

T

“”


Ann Pierce, Amy Bryan and Tiffany Tolder are part of the Residential Services and Marketing Group that helpedJackson EMC receive the U.S. Environmental Protection Agency's 2009 ENERGY STAR® Leadership in HousingAward for promoting energy-efficient construction and environmental protection.


As individuals and families look for ways to economize and

stretch their income, they can get a helping hand from their

electric cooperative through a wide variety of Right Choice™

services and products they can take advantage of to use

electricity more efficiently.

“If our members want information on an energy

efficiency-related topic from a source they can trust, they can

simply open their monthly Jemco News newsletter for the latest

tips or go to the cooperative’s www.jacksonemc.com website

to look up “Smart Connections” topics from air conditioning

to zoning,” says Residential Marketing Director Amy Bryan.

And the cooperative is building a library of “how to”

information, from caulking to insulating attic access doors.

A selection of online Home Analyzer tools allow

members to use their own account information to get a

customized look at their energy use, check the energy used

by their appliances, compare the energy use of different

types of television sets, calculate their savings from switching

out incandescent light bulbs for compact fluorescents and

figuring annual savings on updating heating and cooling

systems. All are available at a keystroke whenever our

members want to use them.

“Energy audits are extremely valuable tools in improving

home energy efficiency, and Jackson EMC offers a number

of choices to its residential members, structured to fit their

needs,” Bryan notes. For those who prefer to do their own

audit, a do-it-yourself kit with a step-by-step checklist and

DVD or videotape guide will enable them to examine their

home and identify potential problems.

good news for the household budget

Members want information

on an energy efficiency-related

topic from a source they can

trust.

“

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For the less adventurous, the cooperative will send a staff

member who has the expertise to conduct a free walk-

through audit of the home and report efficiency problems.

And for those who have difficulty pinpointing comfort or

energy use issues, the Right Choice™ Home Performance

with ENERGY STAR® audit can use computer technology

and sophisticated tests to conduct a scientific analysis of the

home, giving the homeowner a prioritized list of recommen-

dations for improvement.

In 2008, the Home Performance audit was partnered

with Home Analyzer technology and new reporting software,

adding the customer’s billing history to the analysis.

“Online test results that the homeowner can access at any

time, coupled with a PowerPoint presentation to simply

explanation of test results and explain home performance

concepts, have enhanced communication,” says Bryan.

Instant email capabilities between the Home Performance

technicians and contractor network companies provide a

better information flow to the contractors who must produce

accurate energy improvement bids for work recommended

by the audit.

If a member is interested in an energy efficient new

home, the cooperative has partnered with area builders to

produce highly energy efficient Right Choice™ homes, one

of the best new home products provided by utilities in the

country. Designed for the most efficient energy use from the

planning stage to completion, these homes are constructed by

participating builders and contractors to standards that are

verified through high tech testing and third party evaluations.

Right Choice™ homeowners are guaranteed energy saving


Right Choice homeowners are guaranteed

energy savings and comfort, in addition to

thousands of dollars in operating and

maintenance savings over the life of

the home.

and comfort, in addition to thousands of dollars in operating

and maintenance savings over the life of the home.

In 2009, Right Choice™ standards were partnered with

those of the national ENERGY STAR® program, providing

additional confidence for homebuyers who know and trust

the ENERGY STAR® brand. As a result, Jackson EMC

received the U.S. Environmental Protection Agency’s 2009

ENERGY STAR® Leadership in Housing Award for promoting

energy-efficient construction and environmental protection.

An ENERGY STAR® partner since 2005, the cooperative

joins more than 15,000 public and private organizations

that are improving energy efficiency through their products

and services. “From using ENERGY STAR® standards in our

new and existing home products, to educating members on

the value of purchasing ENERGY STAR® qualified

appliances and lighting, Jackson EMC is helping to promote

energy efficient living,” Bryan explains.

The cooperative also began providing its members with

a way to obtain some of the energy they need from the sun,

through a Right Choice™ Sun Power Solar Program that

provides support and rebates to members who install

electricity-generating photovoltaic (PV) systems or

ENERGY STAR® qualified solar thermal water heating systems

in their homes. This program can reduce peak load and adds

to the cooperative's renewable generation resources.

All of these products and services are backed up by the

experience and expertise of the cooperative staff, providing

support residential members can count on to see them

through tough times.

{“

”


Jackson EMC engineer Mark Zoller (left) and Commercial & Industrial Director, Lee Chapman (right),worked with Larry Buice of Athens Stonecasting to help the manufacturer of garden ornamentsreduce monthly power consumption.


With the economy shrinking revenues and putting even more

emphasis on cost reduction, companies are cutting shifts,

reducing hours of operation and looking for every savings.

Members with commercial and manufacturing operations

can also turn to their cooperative as a partner in making

their business more efficient and economical.

Commercial/industrial members can access the

www.jacksonemc.com website any time they like for information

on how to develop an energy management plan, common

problems found by energy audits and other valuable

information.

Like residential members, commercial/industrial

members can get an expert analysis of their energy use and

recommendations for improvement from the cooperative at

no charge. Audits may be arranged by commercial/industrial

marketing representatives, through direct contact with

members, and requested by the cooperative’s Contact Center,

as a result of bill inquiries, but all are handled by Jackson

EMC engineer Mark Zoller.

“The fact that we're seeing more members - in both large

and small commercial operations - request audits is a good

indicator of the economy’s impact,” comments Zoller.

Frequently, part of the energy audit includes changing

misconceptions about efficiency. “Audit results provide

customers with a clear picture of their energy consumption and

efficiency, giving them information they can use to improve,”

he explains. “But at the end of the process the commercial

member must decide if they’re willing to invest in improvements

that will have a long-term, rather than short-term, payback.”

Opportunities for improvement always involve two areas:

optimizing equipment and conserving energy. Making better

use of equipment can involve improvements such as

installing energy efficient lighting or using chillers and

refrigeration more efficiently. Conservation recommendations

usually focus on better control of energy resources through

the use of timers and motion sensors to keep from lighting,

heating or cooling space while it’s unoccupied.

“Lighting retrofits are popular energy efficiency programs

since they're ‘low hanging fruit’ for the member,” says Zoller.

With state and Federal tax incentives, lighting retrofits can be

relatively inexpensive, quick and easy to implement, as well

as produce an immediate cost savings. Jackson EMC is

frequently called in as a third-party expert to analyze retrofit

recommendations and verify projected cost savings.

a bright spot on the bottom line


Energy audit recommendations can also include lighting

recommendations, as it did for Athens Stonecasting, the

southeast’s largest manufacturer of garden ornaments, where

the recommended use of natural light significantly reduced

the company’s power consumption for lighting.

“In this economy, no-cost services are more attractive to

businesses than ever,” says Commercial & Industrial

Marketing Director Lee Chapman. “In addition to energy

audits, the cooperative can also provide our members with

infrared scans of electrical panels and large electric motors to

detect the hot spots that indicate equipment is coming to the

end of its lifecycle; demand-side management assistance and

recommendations; review of new construction, expansion or

renovation designs for energy efficiency; and assistance with

internal power quality issues.”

But the cooperative is always looking for new and different

ways it can support the businesses it serves. A unique opportu-

nity to both promote energy efficiency and add value to the

relationships with business members presented itself this year.

“Adding value to the association with Jackson EMC is an

important part of what we do for our members, and an

excellent example is the Lunch and Learn sessions that we’ve

partnered with our Residential Marketing group to present

to the employees of key account customers, selected

non-manufacturing members, municipal groups, community

service organizations and Chambers of Commerce,” explains

Gwinnett District Commercial & Industrial Marketing

Representative Todd Evans.

“Since the beginning of the Lunch and Learns, we’ve

reached more than 1,000 individuals through the program,”

notes Director of Residential Marketing Amy Bryan, providing

them with information and recommendations about smart

energy use and Jackson EMC’s residential programs and

services, squeezed into a lunch hour, with key recommenda-

tions they can take home and act on immediately.

“I really didn't know how popular Lunch and Learns

were until I began offering them to my key accounts. When I

told them we could do this for them, they jumped on it,”

Evans comments. “Energy efficiency is a very timely issue.

The sessions allow our member companies to offer their

employees a unique benefit.”

One of the Lunch and Learns Evans arranged was with

Sage Software, a company already known for being green and

demonstrating a commitment to the environment, where the

energy efficiency message was especially appreciated.

The takeaway for the cooperative is a stronger relationship

with its key accounts, a result of higher visibility and added

value. “Any time you have the opportunity to do something

like this for your customers, it continues to reinforce your

image as a person who helps them, rather than just the guy

they call when they have a problem. It takes our working

relationship to another level.”

On a variety of fronts, these services are just a part of the

partnership role the cooperative plays in helping our business

members survive and succeed in uncertain times.


Todd Evans, Commercial & Industrial Marketing Representative meets with Rachel Blankenship of Gwinnett-based Sage Software, a company that has benefitted from a focus on energy-efficiency.


Since our lines were first lines were powered 70 years ago, without deviation, our focus has been on serving our members.“

”helping our communities navigate

s the recession forces businesses to scale back operations, reduce

their workforce or even close their doors, the ripple effect can be

felt throughout the community. As area county and city governments try to

navigate the hazardous waters of this economy, Jackson EMC continues to

invest its resources in the ongoing work of local government, Chambers

of Commerce and Economic Development Councils to ensure existing

business and industry can prosper and that the area remains attractive to

new business and industry. That role is more critical now than ever.

A


As a member of the Greater Hall Chamber of Commerce executive board, Commercial & Industrial Marketing Representative, David Lee has served on the Vision 2030 committee as a way to help guide the area towards attracting business and industry.


Sr. Commercial & Industrial Representative Randy Dellinger helps Gwinnett County move in the right direction by serving as vice chairman of the Chamber's Economic Development Committee.


“When we have major customers close their doors, it

doesn’t just hurt the cooperative,” says Commercial &

Industrial Marketing Director Lee Chapman, “it hurts the

community in many ways. There’s the impact to the tax

base, which hurts revenue; the impact to other business in

the area when employees lose their jobs and stop spending;

and the indirect impact from time and money the business

used to put into the community by sponsoring Little League

teams, Relay for Life.”

A member of the Greater Hall Chamber of Commerce

board of directors and executive board, Gainesville District

Commercial & Industrial Marketing Representative David

Lee serves with other District employees to support

Chamber activities that work to ensure the success of existing

business and attract quality business and industry to the

area through its Vision 2030 visioning project. “A project

like Vision 2030 brings together all aspects of the community

to ensure that we have not just the infrastructure, but the

quality of life that makes companies feel good about bringing

their employees to this community and makes them want

to stay once they’re here,” Lee notes.

Companies already doing business in the area look to the

Chamber for support in workforce and skills development.

“We work with them to get them connected to the right

resources, such as Lanier Tech and its Quick Start Training

Program, or the Center of Innovation and Manufacturing, or

the Manufacturing Development Center,” Lee explains.

Fellow employee Benny Bagwell, District Engineering &

Operations Coordinator, chairs the Chamber’s Economic

Development Council, which works both with businesses

looking to expand their current operations and new business

looking to move to the county. The focus on economic

development, through the Chamber’s HALLmark initiative, will

grow the job base and continue diversifying the local economy.

Lee says that by investing in and working with the

Chamber, Jackson EMC is helping itself and the community.

“Like other businesses, we have a lot at stake in our commu-

nity’s success, and we have a long history of serving through

the Chamber.”

In Gwinnett County, that Chamber connection has

helped the cooperative be a catalyst and force in the

community. Another example of a long-standing investment

in area Chambers of Commerce, the partnership that has

culminated in Jackson EMC’s involvement with Partnership

Gwinnett, a two-and-a half-year-old economic development effort

that to date has resulted in the relocation or expansion of 110

companies and brought more than 6,000 jobs to the county.


Jefferson District Commercial & Industrial Marketing Representative Scott Martin, stands at one of the industries built within theValentine Farms Industrial Park — a project he shepherded as chairman of the Jackson County Industrial Development Authority.


Joe Hicks is one of several Jackson EMC employees serving on both Barrow County’sChamber, as well as the county’s Economic Development Council, providing

resources to help develop job opportunities for the community.


“At the beginning, Jackson EMC was part of the

discussion that led to this initiative,” notes Gwinnett

District Commercial & Industrial Marketing Representative

Randy Dellinger, currently serving on the executive board of

Partnership Gwinnett and vice chairman of the Chamber’s

Economic Development Committee. “Through the initiative,

we have identified very specific industries that we want to use

our limited funds and manpower to actively recruit. Those

efforts have lead to major triumphs like the relocation of the

NCR headquarters to Gwinnett, creating jobs and adding to

the county’s tax base.”

Dellinger also serves as an information source for the

Chamber’s Business Development Managers, helping them

analyze the needs of new businesses and the resources they’ll

require. And he helps the Chamber by working with incoming

businesses to find existing office or manufacturing space that

will meet their needs.

“I am a cheerleader for the Chamber, and it’s because I

believe in the product,” emphasizes Dellinger. “When

Gwinnett County is successful, Jackson EMC is successful.”

Nowhere is the cooperative’s involvement in the county’s suc-

cess more direct than in Jackson County, where Jefferson

District Commercial & Industrial Marketing Representative

Scott Martin chaired the Chamber’s Economic Development

Committee for eight years and has served as chairman of the

Jackson County Industrial Development Authority for 10 years.

“I grew up here, live here, am raising my family here and

have an interest in the county’s future,” Martin explains.

Heading the IDA involves advertising and promoting

Jackson County, as well as meeting with prospects. “We’ve

worked hard to get Jackson County on the map,” he says,

pointing to the increase from 2 to 15 industrial parks and

the entry of two national developers into local projects.

Along the way, an Economic Development Council was

formed to bring together key players to ensure projects’ success.

“We’ve worked hand-in-hand to promote the county with state

officials, economic development professionals, and prospect

companies that are considering an investment here,” Martin says.

He points to a diverse industrial base that includes man-

ufacturing, distribution and commercial retail as the fruits of

that successful partnership, a strategy that has helped the

county weather the economic downturn.

“An excellent example of what we’ve accomplished is the

Valentine Farms Industrial Park, which formerly was a cattle

farm. The most innovative thing we’ve done is to sponsor

long-term bonds with the County Commission that have

built roads like Valentine Farms Industrial Parkway that are

paying for themselves. The road paved the way for the five

industries and seven buildings built along that road, totaling

a $130 million investment that’s adding revenue to the county’s

tax base and jobs to the economy, all in just four years and

with room to grow.”


As communities grow and develop, the support they

need from Jackson EMC changes. In response to those

changing needs, Jackson EMC has made an additional

investment in human capital in Barrow County by repurposing

the Chamber support provided by Gwinnett District

Commercial & Industrial Marketing Representative Joe Hicks.

“Our Jefferson District Manager, Don Stewart, has been

active with the Chamber here for a long time,” notes Hicks,

“but the county has been growing and we felt we needed to

take the opportunity to make an additional contribution to

its success.”

By working as a resource for the Chamber’s Community

Economic Development Council, Jackson EMC helped

Barrow County Economic Development Director Linda

Moore put together a workshop for 35 key community

leaders, with Georgia EMC Economic Development

Consultant Niki Knox and UGA Department of Agriculture

and Applied Economics Professor Jeffrey Dorfman presenting

ideas on how the community could effectively present itself

to companies looking to relocate.

The cooperative has also established a strong partnership

with the Barrow County School System, the strength of

which is vital to attracting new business and industry.

It actively supports the school system in recruiting and

retaining high quality teachers.

“Our involvement is just good business,” says Hicks. “It’s

good for area businesses in general and our key accounts in

particular to see us active in the community through the

Chamber and see us working to support the county’s success.

While bringing in new business is important, the cooper-

ative is working in some nontraditional ways to help support

local economies. It has provided additional expertise to help

the Barrow County Economic Development Council with its

rebranding effort and website redesign, supported the devel-

opment of a new website for the Lumpkin County Economic

Development Authority and helped the Banks County

Chamber of Commerce create its first economic development

brochure.


FINANCIALS

REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors

Jackson Electric Membership Corporation

We have audited the accompanying balance sheets of Jackson Electric Membership Corporation as of May 31,

2009 and 2008 and the related statements of revenue and patronage capital and cash flows for the years then

ended. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to

express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of

America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the

Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement. An audit includes

consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s

internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining,

on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting

principles used and significant estimates made by management, as well as evaluating the overall financial statement

presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial

position of Jackson Electric Membership Corporation as of May 31, 2009 and 2008, and the results of its operations

and cash flows for the years then ended in conformity with accounting principles generally accepted in the United

States of America.

In accordance with Government Auditing Standards, we have also issued our report dated August 13, 2009 on

our consideration of Jackson Electric Membership Corporation’s internal control over financial reporting and on our tests

of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The

purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance

and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on

compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards

and should be considered in assessing the result of our audits.

McNAIR, McLEMORE, MIDDLEBROOKS & CO., LLP

AUGUST 13, 2009


BALANCE SHEETSMay 31

ASSETS 2009 2008Utility Plant

Electric Plant in Service-At Cost $735,241,270 $ 688,256,565Construction Work in Progress 12,685,825 23,542,241

Gross Utility Plant 747,927,095 711,798,806Accumulated Provision for Depreciation (178,557,003) (163,071,655)

569,370,092 548,727,151

Other Property and InvestmentsInvestments in Associated Organizations 90,576,680 83,560,534Restricted Funds 40,000,000 40,200,000

130,576,680 123,760,534Current Assets

Cash and Cash Equivalents 70,127,150 17,421,675Accounts Receivable (Net of Accumulated Provision forUncollectibles of $1,343,812 in 2009 and $1,454,318 in 2008) 22,480,972 23,228,579Materials and Supplies 12,300,504 13,474,370Other 3,239,279 3,667,512

108,147,905 57,792,136

Deferred Debits 3,947,807 3,202,390

Total Assets $812,042,484 $ 733,482,211

EQUITIES AND LIABILITIES 2009 2008Equities

Membership Fees $ 2,603,050 $ 2,503,170Patronage Capital 255,085,059 241,740,952Other 603,842 555,761

258,291,951 244,799,883

Long-Term Debt 435,791,970 367,280,007

Other Long-Term LiabilitiesAccumulated Provision for Postretirement Benefits -Noncurrent 16,499,274 13,498,525

Current LiabilitiesLong-Term Debt-Current Portion 9,984,000 9,121,000Accumulated Provision for Postretirement Benefits -

Current Portion 805,625 915,083Accounts Payable 27,089,571 27,247,894Consumers’ Deposits 6,670,402 6,789,869Other 10,588,917 10,486,788

55,138,515 54,560,634

Deferred Credits 46,320,774 53,343,162

Total Equities and Liabilities $812,042,484 $733,482,211

The accompanying notes are an integral part of these balance sheets.


STATEMENTS OF REVENUE AND PATRONAGE CAPITALFor the years ended May 31

2009 2008Operating Revenues $448,378,582 $429,765,646

Operating ExpensesCost of Power 338,118,910 315,393,597Distribution Operations 10,868,501 11,307,960Distribution Maintenance 14,244,379 14,209,586Consumer Accounts 14,191,824 15,315,878Customer Information and Sales 7,183,716 8,705,344Administrative and General 10,124,720 10,440,682Depreciation 24,225,424 22,691,197

418,957,474 398,064,244

Operating Margins Before Interest Expense 29,421,108 31,701,402

Interest Expense 21,600,382 19,895,020

Operating Margins After Interest Expense 7,820,726 11,806,382

Nonoperating Margins 5,787,659 5,489,131

Generation and Transmission Cooperative Capital Credits 4,009,095 3,775,930

Other Capital Credits and Patronage Capital Allocations 446,860 542,965

Net Margins 18,064,340 21,614,408

Patronage Capital-Beginning 241,740,952 224,609,827

Retirement of Patronage Capital (4,470,233) (4,483,283)

Patronage Capital-Ending $255,085,059 $241,740,952

The accompanying notes are an integral part of these statements.


STATEMENTS OF CASH FLOWSFor the years ended May 31

2009 2008Cash Flows from Operating Activities

Net Margins $18,064,340 $ 21,614,408Adjustments to Reconcile Net Margins to Net Cash

Provided by Operating ActivitiesDepreciation and Amortization 25,590,332 23,871,658Patronage Capital from Associated Organizations (4,457,385) (4,318,895)Deferred Revenue (10,665,362) (10,533,468)Postretirement Benefits 2,891,291 (11,169,551)Loss on Sale of Utility Plant (192,432) (26,658)Change In

Accounts Receivable 747,607 3,596,817Other Current Assets 428,233 (64,823)Accounts Payable (158,323) (1,509,437)Other Current Liabilities 102,129 (1,071,528)

32,350,430 35,533,991

Cash Flows from Investing ActivitiesExtension and Replacement of Plant (48,326,862) (56,137,126)Return of Equity from Associated Organization 356,443 552,072NRUCFC Member Capital Securities (3,000,000) -Plant Removal Costs (2,444,328) (1,460,772)Material Salvage 4,730,349 3,272,184Deferred Debits (745,417) (1,028,612)Materials and Supplies 1,173,866 (667,422)

(48,255,949) (55,469,676)Cash Flows from Financing Activities

Advances from Long-Term Debt 62,000,000 34,324,000Membership Fees 99,880 112,555Principal Repayment of Long-Term Debt (11,469,081) (9,787,431)Retirement of Patronage Capital (4,720,233) (4,483,283)Investment in Capital Term Certificates 84,796 67,307Deferred Credits 3,642,974 1,138,552Consumers Deposits (119,467) (123,906)Other Equities 48,081 27,043Restricted Funds 200,000 23,681,952Advance Payments on Long-Term Debt Unapplied 18,844,044 (16,860,310)

68,610,994 28,096,479

Net Increase in Cash and Cash Equivalents 52,705,475 8,160,794

Cash and Cash Equivalents-Beginning 17,421,675 9,260,881

Cash and Cash Equivalents-Ending $ 70,127,150 $ 17,421,675

The accompanying notes are an integral part of these statements.


NOTES TO FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Accounting policies of the Corporation reflect practices appropriatein the electric utility industry. The following describes the moresignificant of those policies.

Nature of OperationsJackson Electric Membership Corporation is a not-for-profit corpo-ration organized to provide electric service to its members. TheCorporation operates as a cooperative whereby all monies in excessof cost of providing electric service are capital, at the moment ofreceipt, and are credited to each member’s capital account.

Use of EstimatesThe preparation of financial statements in conformity with generallyaccepted accounting principles requires management to makeestimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilitiesat the date of the financial statements. Estimates also affect thereported amounts of revenues and expenses during the reportingperiod. Actual results could differ from those estimates.

Long-Lived AssetsThe Corporation evaluates long-lived assets for impairment whenevents or changes in circumstances indicate that the carrying valueof such assets may not be recoverable. The determination ofwhether an impairment has occurred is based on either a specificregulatory disallowance or an estimate of undiscounted future cashflows attributable to the assets, as compared with the carryingvalue of the assets. If an impairment has occurred, the amount ofthe impairment recognized is determined by estimating the fairvalue of the assets and recording a provision for loss if the carryingvalue is greater than the fair value. For assets identified as held forsale, the carrying value is compared to the estimated fair value lessthe cost to sell in order to determine if an impairment provision isrequired. Until the assets are disposed of, their estimated fair valueis reevaluated when circumstances or events change.

Accounting standards require the present value of the ultimate costfor an asset’s future retirement be recorded in the period in whichthe liability is incurred. The cost should be capitalized as part of therelated long-lived asset and depreciated over the asset’s useful life.The Corporation has no legal retirement obligations related to itsdistribution facilities; therefore, a liability for the removal of theseassets will not be recorded. Management believes the actual cost of removal, even though not a legal obligation, will be recoveredthrough rates over the life of the distribution assets.

Utility PlantUtility plant is capitalized at cost less related contributions in aid of construction. In general, utility plant is capitalized at the time itbecomes part of an operating unit and has been energized.

Depreciation and MaintenanceDepreciation of capitalized cost is provided using straight-line rates. When property subject to depreciation is retired or otherwisedisposed of in the normal course of business, its capitalized costand its cost of removal less salvage are charged to the accumulatedprovision for depreciation.

Provision has been made for depreciation of distribution plant atstraight-line rates ranging from 2.3 to 6.7 percent per annum.Depreciation of general plant is provided on a straight-line basisover the estimated useful lives of the various assets. The ratesrange from 3.0 to 14.0 percent per annum.

The costs of maintenance, repairs and replacements of minor itemsof property are charged to maintenance expense accounts.

Accounts ReceivableAn allowance is made for doubtful accounts based on experienceand other circumstances which may affect the ability of consumersto meet their obligations. Accounts considered uncollectible arecharged against the allowance. Receivables are reported on the balance sheets net of such accumulated allowance.

Materials and SuppliesMaterials and supplies are stated at lower of cost or market. Costis determined substantially by the moving average method ofinventory valuation.

Patronage Capital and MarginsJackson Electric Membership Corporation operates under thecooperative form of organization. As provided in the bylaws, anyexcess of revenues over expenses from operations is treated asadvances of capital by the patrons and credited to each of themon an individual basis. Under provisions of the longterm debtagreements, until the total equities and margins equal or exceed30 percent of the total assets of the Corporation, the return topatrons of capital contributed by them is limited. Total equitiesapproximated 32 and 33 percent of total assets as of May 31,2009 and 2008, respectively.

Operating Revenues and Patronage CapitalOperating revenues which include patronage capital are billedmonthly to consumers. Electricity which had been used bymembers of the Corporation but had not been billed to themembers was not recorded. This unbilled electric revenue totaledapproximately $17,276,000 and $17,349,000 for 2009 and2008, respectively.

Cost of Purchased PowerCost of power is expensed as consumed.



(1) Summary of Significant Accounting Policies (Continued)

Generation and Transmission Cooperative Capital CreditsGeneration and transmission cooperative capital credits representthe annual capital furnished generation and transmission coopera-tives through payment of power bills. The capital is recorded in thecalendar year provided, even though notification of the capitalallocation is not received until later.

Cash EquivalentsFor purposes of the statements of cash flows, cash equivalentsinclude time deposits, certificates of deposit and all highly liquiddebt instruments with original maturities of three months or less.

Fair Value of Financial InstrumentsFinancial instruments include cash and cash equivalents, restrictedfunds, other investments and longterm debt. Investments inassociated organizations are not considered a financial instrumentbecause they represent nontransferable interest in associatedorganizations.

The carrying value of cash and cash equivalents, restricted funds andother investments approximates fair value because of the shortmaturity of those instruments. It is not practicable to estimate thefair value of long-term debt; additional information pertinent to itsvalue is provided in the footnote for long-term debt.

Income TaxesThe Corporation has obtained exemption from federal and stateincome taxes under Section 501(c)(12) of the Internal RevenueCode which provides, in part, that the Corporation derive at least85 percent of its annual gross income from members. TheCorporation files an information return with the Internal RevenueService each year and has always met this requirement. In addition,the Corporation is subject to income taxes on its net unrelatedbusiness income.

New Accounting PronouncementsIn September 2006, the Financial Accounting Standards Board(FASB) issued Statement of Financial Accounting Standards (SFAS)No. 158, Employers’ Accounting for Defined Benefit Pension andOther Postretirement Plans – an amendment of FASB StatementsNo. 87, 88, 106, and 132(R). SFAS No. 158 requires an employerthat sponsors a defined benefit postretirement plan to report thecurrent economic status (the overfunded or underfunded status)of the plan in its balance sheet, to measure the plan assets andplan obligations as of the balance sheet date, and to includeenhanced disclosures about the plan. The Corporation was requiredto adopt the recognition and disclosure provisions of SFAS No. 158for the fiscal year ended May 31, 2008 and will be required toadopt the measurement date provision for the fiscal year endingMay 31, 2009.

(2) Utility PlantListed below are the major classes of the electric utility plant as ofMay 31:

2009 2008

Distribution Plant $641,775,247 $601,153,368Generation Plant 12,652,143 12,652,143General Plant 80,813,880 74,451,054

Electric Plant in Service 735,241,270 688,256,565Construction Work In Progress 12,685,825 23,542,241

$747,927,095 $711,798,806

(3) Investments in Associated Organizations 2009 2008National Rural Utilities Cooperative Finance Corporation

Capital Term Certificates $ 3,467,470 $ 3,552,266Member Capital Securities 3,000,000 –Capital Credits 1,443,636 1,476,428

Oglethorpe Power CorporationCapital Credits 59,500,529 57,354,958

Georgia Systems Operations Corporation

Capital Credits 21,980 20,509CoBank

Stock 426,691 426,691Georgia Transmission Corporation

Contributed Capital 5,166,245 5,166,245Capital Credits 12,153,286 10,610,549

GRESCO Utility Supply, Inc.Capital Credits 2,166,928 2,042,819

Smarr EMCContributed Capital 617,420 617,420Capital Credits 2,593,742 2,274,426

Green Power EMCContributed Capital 12,400 12,400

The National Rural Telecommunications Cooperative

Capital Credits 5,213 4,683Memberships in Associated Organizations 1,130 1,130Other 10 10

$ 90,576,680 $ 83,560,534

(4) Deferred DebitsDeferred debits are comprised of the following as of May 31:

2009 2008Software $ 163,317 $ 355,317Prior Service Cost-Pension 1,401,600 1,632,000Resource Planning 2,209,355 1,199,030Other 173,535 16,043

$ 3,947,807 $ 3,202,390



(5) Patronage Capital2009 2008

Assignable $ (1,952,471) $ (3,217,859)Assigned 330,943,502 314,144,550

328,991,031 310,926,691Retired (73,905,972) (69,185,739)

$255,085,059 $241,740,952

(6) Other Equities2009 2008

Capital Gains and Losses $ 534 $ 534Retired Capital Credits-Gain 324,414 322,862Donated Capital 278,894 232,365

$ 603,842 $ 555,761

(7) Long-Term DebtLong-term debt consists primarily of mortgage notes payable tothe United States of America acting through the Rural UtilitiesService (RUS) and the National Rural Utilities Cooperative FinanceCorporation (NRUCFC). The notes are secured by a mortgage agree-ment among the Corporation, RUS, NRUCFC and FFB. Substantiallyall the assets of the Corporation are pledged as security for long-term debt of the Corporation. The notes generally have 35-yearmaturity periods and are payable on an installment basis.

Holder of Note Interest Rate 2009 2008

RUS 4.46% to 5.75% $268,766,708 $275,340,425NRUCFC 4.40% to 6.90% 127,992,793 132,888,157RUS Cushion-of-Credit 5.00% (12,983,531) (31,827,575)FFB 2.998% 62,000,000

445,775,970 376,401,007Maturities Due Within One Year (9,984,000) (9,121,000)

$435,791,970 $367,280,007

Principal maturities of long-term debt approximate $9,984,000for each of the ensuing five years.

The Corporation has $104,204,000 in unadvanced loan funds oncommitment from FFB. The availability of the unds is contingenton the Corporation’s compliance with one or more preconditionsset forth in the mortgage agreement.

The Corporation has a $50,000,000 line-of-credit at 4.25 percentwith NRUCFC which had no outstanding balance as of May 31,2009 and 2008. The Corporation also has a $50,000,000 line-ofcredit at 3.72 percent with CoBank which had no outstandingbalance as of May 31, 2009 and 2008.

Interest payments totaled $21,316,684 and $19,907,417 for theyears ended May 31, 2009 and 2008, respectively.

The Corporation has made unapplied advance payments to the RUSCushion-of-Credit program. Under this program the Corporationmay make voluntary deposits into a special cushion-of-creditaccount. The cushion-of-credit account balance accrues interest tothe Corporation at a rate of 5 percent per annum. The use of thecushion-of-credit account is restricted to funding the future debtservice payments that the Corporation is obligated to pay againstits outstanding indebtedness to RUS.

(8) Deferred CreditsDeferred credits are comprised of the following as of May 31:

2009 2008Unclaimed Retired Capital Credits $ 4,133,832 $ 3,820,403Power Cost Revenue Deferral 38,857,397 49,522,759Benefits Clearing Account 3,329,545 –

$ 46,320,774 $53,343,162

The power cost revenue deferral represents revenues which arebeing recognized to reduce the impact of power cost on theCorporation’s rate structure.

Plan transactions were as follows:2009 2008

Beginning Balance $49,522,759 $ 60,056,227Returned to Revenue (10,665,362) (10,533,468)

Ending Balance $ 38,857,397 $ 49,522,759

The revenue deferrals detailed above are in compliance with SFASNo. 71 and have been approved by the Rural Utilities Service.

The board of directors of Jackson Electric Membership Corporationspecified the deferred funds be deposited in special accountsuntil such time as a like amount is subsequently amortized intorevenue. Accordingly, the funds have been set aside as restrictedfunds and RUS cushion-of-credit for the years ended May 31,2009 and 2008.



(9) Retiree BenefitsPension Plan (Defined Benefit)Pension benefits for substantially all employees of the Corporationare provided through participation in the National Rural ElectricCooperative Association (NRECA) Retirement and Security Program,a defined benefit plan qualified under Section 401 and tax exemptunder 501 (a) of the Internal Revenue Code. The Corporationmakes annual contributions to the program equal to the amountsrecorded for the pension expense. Total pension cost of$3,736,667 and $3,294,671 was charged to operations for theyears ended May 31, 2009 and 2008, respectively. In this multi-employer plan, which is available to all member cooperatives ofNRECA, the accumulated benefits and plan assets are not determinedor allocated separately by individual employer.

Defined Contribution PlanThe Corporation also provides additional employee benefits to substantially all employees through the NRECA sponsored definedcontribution Savings Plan (401-k). In this defined contributionplan, the Corporation’s contributory portion of costs of this plantotaled $647,235 and $638,539 for the years ended May 31,2009 and 2008, respectively.

Postretirement Healthcare BenefitsThe Corporation provides medical benefits and life insurance toqualified retirees and directors. The Corporation had previouslyadopted SFAS No. 106, Employers’ Accounting for PostretirementBenefits Other than Pensions. This standard requires cooperatives torecognize the estimated future cost of providing healthcare andany other postretirement benefits on an accrual basis.

The Corporation also adopted the recognition provisions of SFASNo. 158, Employers’ Accounting for Defined Benefit Pension andOther Postretirement Plans-An Amendment of FASB StatementsNo. 87, 88, 106 and 132(R), as of May 31, 2008, which requiresthat the funded status of defined benefit pension and otherpostretirement plans be fully recognized in the balance sheets.

The status of the Corporation’s postretirement healthcare plan as ofMay 31 is detailed as follows:

2009 2008Accumulated Postretirement $ 36,218,524 $36,667,680Benefit ObligationFair Value of Assets (18,913,625) (22,254,072)

Funded Status $17,304,899 $14,413,608

Employer Contributions $1,145,885 $5,712,739Plan Participant Contributions – –Benefits Paid $1,319,611 $1,140,508

Amounts recognized in the balance sheets consisted of:

2009 2008Noncurrent Liabilities $ 16,499,274 $13,498,525Current Liabilities 805,625 915,083

$17,304,899 $14,413,608

Other changes in benefit obligations recognized in patronage capital are as follows:

Service Cost $2,044,850 $2,184,504Interest Cost 2,195,366 2,015,496Actuarial (Gain) Loss (3,329,545) 12,483,801

910,671 16,683,801Loss on Plan Assets 3,345,824 138,082

Total Recognized in Net PeriodicCost and Patronage Capital $4,256,495 $16,821,883

The following table shows key assumptions used for the measurement of obligations for the plan.

May 31Description 2009 2008 2007Discount Rate 6.00% 6.00% 6.00%

Long-term Rate of Return 8.50% 8.50% 8.50%

Medical Trend RateMedicare Ineligible

Initial 8.50% 8.90% 9.20%Ultimate 5.50% 5.50% 5.50%Fiscal Year Reached 2017 2017 2017

Medicare EligibleInitial 8.00% 10.00% 10.50%Ultimate 5.50% 5.50% 5.50%Fiscal Year Reached 2017 2017 2017

Dental Trend RateInitial 6.00% 7.00% 7.33%Ultimate 5.00% 5.00% 5.00%Fiscal Year Reached 2014 2014 2014

Utilizing SFAS No. 71, the Corporation recognizes any gain or lossand prior service cost on a current basis.



The following benefits are expected to be paid:Year Amount2010 $ 805,6252011 862,4822012 888,1402013 998,9242014 1,107,5562015-2019 6,980,358

The following table sets forth the weighted-average asset allocationsof the Corporation’s postretirement medical benefits at May 31,2009 and 2008 by asset category.

MoneyMarket

Year Funds Bonds Equities Totals2009 3.6% 51.4% 45.0% 100.00%2008 1.3% 42.4% 56.3% 100.00%

The Corporation employees a total-return investment approachwhereby a mix of equities and fixed income investments is usedto maximize the long-term return of plan assets for a prudentlevel of risk. Risk tolerance is established through careful consider-ation of plan liabilities, plan funded status and corporate financialcondition. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews andannual liability measurements.

The Corporation estimates that it will make a voluntary contributionof approximately $1,320,000 to its postretirement medical plan in2010.

(10) Nonoperating MarginsNonoperating margins are comprised of the following as of May 31:

2009 2008Interest and Dividend Income $ 4,598,578 $ 4,177,958Gain on Sale of Property (Net) 206,951 74,133Equity Gain of Cooperative

Choice, LLC 982,189 1,236,826Other (59) 214

$ 5,787,659 $ 5,489,131

(11) Concentration of Credit RiskFinancial instruments that potentially subject the Corporation toconcentrations of credit risk consist principally of cash and cashequivalents, restricted funds and consumer accounts receivable.The Corporation maintains its cash balances in financial institutions;cash balances throughout the year periodically exceed federallyinsured deposit limits of $250,000.

At May 31, 2009, commercial paper in the amount of $14,500,000was held by the Corporation. The amount is not secured or otherwise subject to federally insured deposit liability coverage.Concentrations of credit risk with respect to consumer accounts

receivable are limited due to the large number of customers comprising the Corporation’s customer base.

(12) CommitmentsThe Corporation has a wholesale power contract with OglethorpePower Corporation (OPC) through 2050. Under the terms of thecontract, the Corporation is responsible for 11.62 percent of OPC’sfixed costs. The Corporation’s portion of these costs, which totaledapproximately $61,575,000 for the year ended May 31, 2009, are expected to be at the same level for future years.

The Corporation entered into a power purchase agreement withSmarr EMC for a facility known as the Smarr Energy Facility.Under the terms of the agreement, the Corporation is responsiblefor 9.0310 percent of the Smarr Energy Facility fixed costs. Inaddition, the Corporation has agreed to guarantee 7.4735 percentof the indebtedness of Smarr EMC related to the Sewell CreekFacility. The total indebtedness for the facility as of December 31,2008 was approximately $90,397,000.

The Corporation entered into power purchase agreements datedNovember 1, 2001, related to the Chattahoochee Energy Facilityand the Talbot Energy Facility. These facilities are owned by OPC,and under the terms of the agreements, the Corporation is respon-sible for 10.4453 percent of the Chattahoochee Energy Facilityfixed costs and 2.9633 percent of the Talbot Energy Facility fixedcosts. The Corporation’s portion of these fixed costs, which totaledapproximately $3,627,000 for the Chattahoochee Energy Facilityand $682,000 for the Talbot Energy Facility for the year endedMay 31, 2009, are expected to be at the same level for futureyears. The agreements are in effect through December 31, 2025.

Effective February 20, 2001, the Corporation entered into a powersupply and energy call agreement. The agreement commenced onOctober 1, 2001 and will continue through December 31, 2015.Under the terms of the agreement, the Corporation is required tomaintain a modified debt service coverage ratio of greater than orequal to 1.25. In the event this condition is not met, theCorporation will be required to provide the supplier with acceptablecredit support in an amount equal to $65 million. Once the condition is again met by the Corporation, the remaining amountof credit support will be returned. Also under the terms of theagreement, the supplier will supply 100 percent of all reserverequirements for load obligations.

Under current law, the Corporation has the ability to recover thesecosts from its members; however, any change to existing lawscould adversely affect the ability to recover these costs.

(13) LitigationThe Corporation is involved in litigation arising in the ordinary courseof business. After consultation with legal counsel, managementestimates that these matters will be resolved without materialadverse effect on the Corporation’s future financial position orresults from operations.

Otis Jones, ChairmanGwinnett County

Chuck Steele, Vice ChairmanBarrow County

Rodney Chandler, Secretary-TreasurerMadison County

Bill CarpenterJackson County

Charles GorhamJackson County

Balfour HunnicuttClarke County

Ray JonesHall County

John MitchellBanks County

Lynn PriceGwinnett County

Randal Pugh, President/CEO

board of directors

Statement of NondiscriminationJackson EMC is the recipient of Federal financial assistance from the Rural Utilities Service, an

agency of the U.S. Department of Agriculture, and is subject to the provisions of Title VI and

Title VII, of the Civil Rights Act of 1964, as amended, Civil Rights Act of 1991, Section 503

and 504 of the Rehabilitation Act of 1973, as amended, The Americans with Disabilities Act

of 1991 and the rules and regulations of the U.S. Department of Agriculture and the U.S.

Department of Labor, OFCCP, which provide that no person in the United States on the basis

of race, color, national origin, age or handicap shall be excluded from participation in, admission

or access to, denied the benefits of, or otherwise subjected to discrimination under any of this

organization’s programs or activities.

The person responsible for coordinating this organization’s nondiscrimination compliance efforts

is William P. Ormsby, Manager, Corporate Administration. Any individual, or specific class of

individuals, who feels that this organization has subjected them to discrimination may obtain

further information about the statutes and regulations listed above and/or file a written

complaint with this organization; or the Secretary, U.S. Department of Agriculture, Washington,

D.C. 20250; or the Administrator, Rural Electrification Administration, Washington, D.C. 20250,

and the Director, U.S. Department of Labor, Office of Federal Contract Compliance Programs,

Washington, D.C. 20250. Complaints must be filed within 180 days after the alleged

discrimination. Confidentiality will be maintained to the extent possible.

P.O. Box 38Jefferson, Georgia 30549

www.jacksonemc.com

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