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MINUTES SOUTHSIDE ELECTRIC COOPERATIVE

MEETING OF THE BOARD OF DIRECTORS NOVEMBER 21, 2019 @ 1:30 P.M.

HEADQUARTERS BOARD ROOM PRESENT: Frank W. Bacon (Chair) Earl C. Currin, Jr. (Vice Chair) Paul S. Bennett (Secretary) Charles J. Friedl (Treasurer) Brenda H. Johnson

Clive C. Pettis, Sr. Sarah W. Sanders William T. White Frank F. Rennie (General Counsel) Carlis Dansberger (Minute Taker)

STAFF: Bradley V. Furr, VP of Operations George A. Felts, VP of Engineering

Jason Loehr, VP of Finance & Corporate Services Jean H. Morris, VP of Human Resources Ronald O. White, VP of Member & Public Relations GUEST: Scott Diggs, Line Technician Supervisor

Jacob McCann, Director of HR Monty Montsinger, PE, Pike Engineering

Dr. Frank Bacon presided, and Ron White gave the invocation.

PREVIOUS MINUTES On motion made and seconded:

The Minutes of the October 17, 2019 Board Meeting are approved. MOTION CARRIED

ODEC REPORT The ODEC report was given by Earl Currin.

PRESIDENT/CEO’S REPORT 1. The SEC Financial and Statistical report for October 2019 was reviewed and is

attached to and made a part of the Minutes. 2. The Board was provided information regarding cybersecurity events during the

month of October 2019. 3. The Institute of Electrical & Electronics Engineers (IEEE) outage data and safety

report for October 2019 were reviewed in detail:

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IEEE Outage Data a. System Average Interruption Duration Index (SAIDI) and System Average

Interruption Frequency Index (SAIFI) were below historical values for the month.

b. Customer Average Interruption Duration Index (CAIDI) was below historical value for the month.

c. There were no power supply outages during the month. d. Dominion Power (DE) had one momentary supply outage during the

month at Evergreen substation due to an unidentified cause. e. There was one Major Event day in October on the 31st. f. Weather remained calm throughout October with limited impact on the

system. Safety Report

a. There were no lost-time injuries in October. b. As of October 31st, employees have worked 518 days without a lost time

injury. 4. Operations Update:

a. New service activity was down slightly for overhead construction but up for underground construction for the month.

b. Outage activity (minutes) with major event days removed were in line with historical data:

Central – 116 Eastern – 53 Northern – 43 Western – 88

c. October outage causes were affected primarily by isolated thunderstorms producing damaging winds and lightning:

Trees 52% or 157 outages; YTD 1,665 outages Unknown 10% or 31 outages; YTD 267 outages Fault/Failure 9% or 28 outages; YTD 324 outages Animals 7% or 22 outages; YTD 226 outages Weather 6% or 17 outages; YTD 624 outages Maintenance/Planned 5% or 16 outages; YTD 106 outages Decay/Age 5% or 15 outages; YTD 97 outages Public 4% or 12 outages; YTD 178 outages Power Supply 1% or 2 outages; YTD 9 outages Other <0.1% or 0 outages; YTD 5 outages

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d. Tree related outages from 2014 through October year-to-date with Major Event Days:

2014 = 870 outages 2015 = 1,066 outages 2016 = 1,025 outages 2017 = 1,029 outages 2018 = 2,314 outages 2019 = 1,665 outages

e. Outages by District: Central 29% (116 outages affecting 4,847 members) Eastern 42% (53 outages affecting 5,409 members) Northern 39% (43 outages affecting 3,796 members) Western 22% (88 outages affecting 2,503 members)

f. October SAIDI switching savings: Realized 48.4 minutes (51%) Saved by automation (SCADA) switching 45.4 minutes (48%) Saved by manual switching 1.0 minutes (1%)

g. One major event occurred on October 31st: Damage was experienced beginning at 7 p.m. on the 31st All outages were restored by 3:50 p.m. on November 1st At the height of the storm there were 5,526 meters out and a total

89 system outages Most of the outages were restored by November 1st at 9 a.m.

h. SAIDI per District: Central 5.61 minutes in October; YTD 81.0 minutes Eastern 0.58 minutes in October; YTD 47.4 minutes Northern 2.16 minutes in October; YTD 23.1 minutes Western 1.67 minutes in October; YTD 93.8 minutes

i. SAIFI per District: Central 0.045 events in October; YTD 0.68 events Eastern 0.005 events in October; YTD 0.39 events Northern 0.039 events in October; YTD 0.32 events Western 0.024 events in October; YTD 0.69 events

j. CAIDI per District: Central 126 minutes in October Eastern 120 minutes in October Northern 57 minutes in October Western 69 minutes in October

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k. Fleet service orders completed YTD: Month Service Orders (SO) Average Cost/SO

January 81 $543 February 77 $527 March 83 $423 April 74 $492 May 79 $280 June 60 $723 July 64 $604 August 106 $329 September 62 $263 October 82 $411

l. Average vehicle downtime in days: January = 2.32 February = 2.12 March = 4.02 April = 2.82 May = 3.02 June = 4.29 July = 2.81 August = 3.21 September = 3.20 October = 2.72

m. Annual fleet expense: 2016 = $828,101 2017 = $977,127 2018 = $887,166 2019 = $955,669

5. Scott Diggs gave a detailed report on his trip to Bolivia as part of the group of linemen who participated through NRECA International.

6. Jeff Edwards, George Felts and Jason Loehr met with Evan Fineman and two others from the Governor’s office along with Andrew Vehorn and Brian Mosier from the VMDAEC on November 15th to present information regarding the Cooperative’s position on Broadband.

7. SEC’s rate case is moving through the process with an effective date of January 1, 2020.

8. All SEC employees and supervisors recently completed anti-harassment training.

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NEW BUSINESS 1. The Long Range Plan (LRP) for 2020 – 2039 and corresponding resolution were

reviewed: a. A tool that is used in the Cooperative’s mission to provide the

membership with safe, reliable and affordable electric service b. Identifies the most economical combination of system improvement

projects that will provide SEC with a transmission and distribution system capable of serving the projected 2034 peak system loading levels and to meeting the reliability and financial goals of the Cooperative

c. Existing 2018 peak was 345,487 kW d. Projected to have a medium growth scenario; 4,000 kW per year or

1.19% average growth rate e. Substation improvement projects identified over the life of the plan:

Reams Powhatan Amelia Gill Center Star Fine Creek

f. Actions required to maintain minimum standards for adequate voltage, thermal loading, service reliability, single contingency capability and equipment capacity.

g. System improvements: Improve voltage levels Maintain adequate thermal capacity Balance phase loads Line-loss reduction Improve reliability Load transfer capability for single contingency Remove distribution line voltage regulators

h. Step 1 Improvements: Radio system - $1.5 million Large distribution line improvements:

- Drakes Branch – 12 to 25 kV conversion $3.7 million - Hooper – 12 to 25 kV conversion $4.9 million - Main line 336 ACSR upgrades:

o Reams (3 miles) $495,000 o Moran (2.6 miles) dual circuit & (4.8 miles) single

circuit $1.4 million o Center Star (2.3 miles) $379,500

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o Wellville (0.9 miles) dual circuit and (3.7 miles) single circuit $813,000

- GIS field inventory $2.1 million Large substation improvements:

- Substation high side modifications: o Drakes Branch, Gary, Moran, Hooper, Nutbush, Fort

Pickett, Danieltown & Brunswick – $430,000 - Powhatan additional 15MVA transformer $1.4 million - Powhatan feeder regulation $360,000 - Reams feeder regulation $225,000 - Fort Pickett feeder regulation $500,000

i. Step 2 Improvements: Main line 336 ACSR upgrades:

- Danieltown (1.2 miles) dual circuit and (1.5 miles) single circuit $517,500

Main line 1000 MCM underground upgrades: - Powhatan (1.7 miles) $850,000

10 to 30 projects: - Center Star and Brunswick $640,000

Large substation improvements: - Substation high side modifications

o Gladys & Victoria $120,000 - Reams additional 20MVA transformer $750,000 - Danieltown upgrade voltage regulators $105,000 - Center Star upgrade transformer to 15 MVA $650,000 - Brunswick upgrade voltage regulators $90,000

j. Step 3 Improvements: Large distribution line improvements:

- Main line 336 ACSR upgrades: o Gary (4.2 miles) $693,000 o Nutbush (2.2 miles) $363,000 o Danieltown (2 miles) $450,500 o Lake Chesdin (3.5 miles) $577,500

- Main line 1000 MCM underground upgrades o Lake Chesdin (8.3 miles) $4.2 million o Alternate is a new substation

- Copper replacement $13.7 million Large substation improvements:

- Lone Gum feeder regulation $375,000 - Amelia additional 15 MVA transformer $1.4 million

General FundCash in Banks 10,214,631.23

General Funds Invested CFC - CTC's 2,115,131.78 CFC - Patronage Capital 2,949,022.91 Federated Insurance Corporation 461,679.00 TEC Trading Incorporated 622,500.00 Town of Hurt 1,000.00

Notes and Accounts Receivable Electric Consumer 6,785,484.56 Other Accounts Receivable 6,510,786.88

29,660,236.36 Material and Supplies in Stock 1,831,688.71

Construction Work in Progress to be Paid from Construction Funds 0.00

TOTAL 31,491,925.07

Construction Funds Available First Citizens Bank 0.00

CFC RUS & FFB COBANK

Balance Available for Advance 28,000,000.00

Gross Obligations 54,078,822.51 146,411,252.37 13,892,479.28 0.00

Interest Paid This Year 1,983,447.14 3,074,455.01 505,573.01 0.00

NOTES STATISTICS

STATEMENT OF GENERAL FUNDS AND OTHER ASSETSNovember 30,2019

CFC, COBANK & FIRST CITIZENS BANK

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Comparative Operating Statistics

584 696 312,243 2,092 1711,901 1,850 1653,706 3,947 3,947

176 45 356,561 57,008 57,008

8,290 8,335 8,335

Meters Installed - New Services

2014 2015 2016 2017 2018 2019January 28 45 49 38 52 83February 25 37 33 50 52 48March 27 44 53 59 41 66April 42 47 44 62 52 55May 41 54 37 59 52 72June 58 46 67 69 54 42July 50 60 53 57 67 79August 76 72 69 57 72 68September 45 53 43 46 50 62October 54 53 62 61 47 90November 48 41 70 52 45 31December 56 45 39 44 32Total 550 597 619 654 616 696

Southside Electric CooperativeFor the Month Ending November 2019

New Services ConnectedMeters RemovedMeters Reinstalled

Y-T-D 2019

Services Idle, Excluding SeasonalNumber of Services RetiredTotal Consumers Receiving ServiceTotal Miles Energized

Y-T-D 2018

November 2019

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SOUTHSIDE ELECTRIC COOPERATIVE Revision: 100216

General LedgerFinancial And Operating Report Electric Distribution

Page: 110:06:54 am12/12/2019

Item Last Year This Year

----------------------------------Year - To - Date -------------------------------

Budget Current------------- Period - To - Date -----------------

Budget

INCOME STATEMENT FOR NOV 2019

109,564,355.02 113,888,199.05 112,280,125.18 10,945,801.14 10,255,517.24 1. Operating Revenue and Patronage Capital0.00 0.00 0.00 0.00 0.00 2. Power Production Expense

61,894,864.45 68,878,403.37 68,769,454.19 6,479,880.58 6,171,934.84 3. Cost of Purchased Power60,174.65 41,193.77 44,735.00 0.00 4,065.00 4. Transmission Expense

0.00 0.00 0.00 0.00 0.00 5. Regional Market Expense3,308,742.88 3,913,767.52 4,210,290.75 369,029.22 380,770.25 6. Distribution Expense - Operation

11,500,246.23 9,755,631.03 10,307,019.13 740,317.00 1,026,711.85 7. Distribution Expense - Maintenance2,030,005.68 2,185,893.74 2,199,501.43 198,520.04 193,030.53 8. Customer Accounts Expense2,425,982.91 2,662,939.91 2,564,060.50 255,157.35 231,212.20 9. Customer Service and Informational Expense

500,213.55 469,369.27 482,219.87 39,681.06 43,838.1710. Sales Expense5,131,051.77 5,172,929.73 5,264,220.24 464,591.33 435,260.2711. Administrative and General Expense

86,851,282.12 93,080,128.34 93,841,501.11 8,547,176.58 8,486,823.1112. Total Operation & Maintenance Expense (2 thru 11)

10,756,390.80 10,722,574.78 10,836,679.37 981,922.49 985,152.6713. Depreciation & Amortization Expense1,611,533.00 1,559,481.00 1,559,481.00 141,771.00 141,771.0014. Tax Expense - Property & Gross Receipts

0.00 0.00 0.00 0.00 0.0015. Tax Expense - Other6,143,141.59 6,696,383.16 6,703,995.87 610,691.38 609,454.1716. Interest on Long-Term Debt

0.00 0.00 0.00 0.00 0.0017. Interest Charged to Construction - Credit21,830.07 40,068.37 24,750.00 3,692.02 2,250.0018. Interest Expense - Other74,592.67 1,062,127.95 98,750.00 146,421.49 36,250.0019. Other Deductions

105,458,770.25 113,160,763.60 113,065,157.35 10,431,674.96 10,261,700.9520. Total Cost of Electric Service (12 thru 19)

4,105,584.77 727,435.45 -785,032.17 514,126.18 -6,183.7121. Patronage Capital & Operating Margins (1 minus 20)117,007.57 123,501.31 115,225.00 10,566.17 10,475.0022. Non Operating Margins - Interest

0.00 0.00 0.00 0.00 0.0023. Allowance for Funds Used During Construction0.00 0.00 0.00 0.00 0.0024. Income (Loss) from Equity Investments

-70,201.44 -6,011.94 -10,083.26 1,463.70 -916.6625. Non Operating Margins - Other660,000.00 649,240.63 641,666.63 58,333.33 58,333.3326. Generation and Transmission Capital Credits669,664.82 597,958.27 600,000.00 0.00 0.0027. Other Capital Credits and Patronage Dividends

0.00 0.00 0.00 0.00 0.0028. Extraordinary Items5,482,055.72 2,092,123.72 561,776.20 584,489.38 61,707.9629. Patronage Capital or Margins (21 thru 28)

5,482,055.72 2,092,123.72 561,776.20 584,489.38 61,707.96Operating - Margin0.00 0.00 0.00 0.00 0.00Non Operating - Margin1.67 1.11Times Interest Earned Ratio - Operating1.89 1.31Times Interest Earned Ratio - Net1.68 1.13Times Interest Earned Ratio - Modified

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General LedgerFinancial And Operating Report Electric Distribution

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Revision: 100216SOUTHSIDE ELECTRIC COOPERATIVE

This YearLast Year Variance

BALANCE SHEET FOR NOV 2019

ASSETS AND OTHER DEBITS 1. Total Utility Plant in Service 370,166,377.68 5,712,880.65364,453,497.03 2. Construction Work in Progress 5,669,854.80 -1,390,935.247,060,790.04 3. Total Utility Plant (1 + 2) 375,836,232.48 4,321,945.41371,514,287.07 4. Accum. Provision for Depreciation and Amort. 126,578,302.09 8,478,565.89118,099,736.20 5. Net Utility Plant (3 - 4) 249,257,930.39 -4,156,620.48253,414,550.87 6. Non-Utility Property (Net) 20,241.26 -3,801.3424,042.60 7. Invest. in Subsidiary Companies 0.00 0.000.00 8. Invest. in Assoc. Org. - Patronage Capital 49,658,787.93 1,341,040.5348,317,747.40 9. Invest. in Assoc. Org. - Other - General Funds 2,577,810.78 -980.072,578,790.85 10. Invest. in Assoc. Org. - Other - Nongeneral Funds 0.00 0.000.00 11. Invest. in Economic Development Projects 0.00 0.000.00 12. Other Investments 705,107.85 7,920.26697,187.59 13. Special Funds 0.00 0.000.00 14. Total Other Property & Investments (6 thru 13) 52,961,947.82 1,344,179.3851,617,768.44 15. Cash - General Funds 10,214,631.23 2,142,284.018,072,347.22 16. Cash - Construction Funds - Trustee 0.00 0.000.00 17. Special Deposits 0.00 0.000.00 18. Temporary Investments 0.00 0.000.00 19. Notes Receivable (Net) 26,654.97 -7,509.3034,164.27 20. Accounts Receivable - Sales of Energy (Net) 6,785,484.56 395,160.126,390,324.44 21. Accounts Receivable - Other (Net) 6,510,786.88 2,578,895.763,931,891.12 22. Renewable Energy Credits 0.00 0.000.00 23. Material and Supplies - Electric & Other 1,831,688.71 -370,900.342,202,589.05 24. Prepayments 448,980.97 27,392.93421,588.04 25. Other Current and Accrued Assets 7,066,248.50 -344,999.817,411,248.31 26. Total Current and Accrued Assets (15 thru 25) 32,884,475.82 4,420,323.3728,464,152.45 27. Regulatory Assets 0.00 0.000.00 28. Other Deferred Debits 2,727,636.09 -856,317.833,583,953.92 29. Total Assets and Other Debits (5 + 14 + 26 thru 28) 337,831,990.12 751,564.44337,080,425.68

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General LedgerFinancial And Operating Report Electric Distribution

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Revision: 100216SOUTHSIDE ELECTRIC COOPERATIVE

This YearLast Year Variance

BALANCE SHEET FOR NOV 2019

LIABILITIES AND OTHER CREDITS 30. Memberships 234,695.00 1,360.00233,335.00 31. Patronage Capital 102,821,278.60 2,946,042.7999,875,235.81 32. Operating Margins - Prior Years 0.00 0.000.00 33. Operating Margins - Current Year 2,092,123.72 -3,389,932.005,482,055.72 34. Non-Operating Margins 0.00 0.000.00 35. Other Margins and Equities 2,071,064.98 630,286.211,440,778.77 36. Total Margins & Equities (30 thru 35) 107,219,162.30 187,757.00107,031,405.30 37. Long-Term Debt - RUS (Net) 0.00 0.000.00 38. Long-Term Debt - FFB - RUS Guaranteed 142,686,215.37 16,360,608.40126,325,606.97 39. Long-Term Debt - Other - RUS Guaranteed 0.00 0.000.00 40. Long-Term Debt - Other (Net) 62,614,114.79 -6,211,271.0768,825,385.86 41. Long-Term Debt - RUS Econ. Devel. (Net) 0.00 0.000.00 42. Payments - Unapplied 0.00 0.000.00 43. Total Long-Term Debt (37 thru 41 - 42) 205,300,330.16 10,149,337.33195,150,992.83 44. Obligations Under Capital Leases - Noncurrent 0.00 0.000.00 45. Accumulated Operating Provisions 28,356.79 -5,324.6533,681.44 46. Total Other Noncurrent Liabilities (44 + 45) 28,356.79 -5,324.6533,681.44 47. Notes Payable 0.00 -9,500,000.009,500,000.00 48. Accounts Payable 8,048,034.98 -688,647.988,736,682.96 49. Consumers Deposits 2,287,211.77 93,096.282,194,115.49 50. Current Maturities Long-Term Debt 9,082,224.00 831,044.008,251,180.00 51. Current Maturities Long-Term Debt - Econ. Devel. 0.00 0.000.00 52. Current Maturities Capital Leases 0.00 0.000.00 53. Other Current and Accrued Liabilities 5,521,936.67 -264,260.405,786,197.07 54. Total Current & Accrued Liabilities (47 thru 53) 24,939,407.42 -9,528,768.1034,468,175.52 55. Regulatory Liabilities 0.00 0.000.00 56. Other Deferred Credits 344,733.45 -51,437.14396,170.59 57. Total Liab. & Other Credits (36+43+46+54 thru 56) 337,831,990.12 751,564.44337,080,425.68

1.320.83Current Assets To Current Liabilities to 1 to 131.75 31.74 % %Margins and Equities To Total Assets

54.6252.53 %Long-Term Debt To Total Utility Plant %

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Statements of Cash Flows 

Southside Electric Cooperative

Period ended Period ended

November 30, 2019 November 30, 2018

Cash flows from operating activities

     Electric revenue received 118,634,728$             113,087,513$            

     Power supply paid (69,382,343)                (64,235,326)               

     Operating expenses paid (29,329,272)                (24,723,509)                 

     Interest received 123,501                       117,008                      

     Interest paid (5,603,543)                   (5,268,972)                  

Cash flows provided by operating activities 14,902,733                  18,976,714                 

Cash flows from investing activities

     Investment in electric plant,net (6,604,742)                   (9,013,624)                  

     Installment loans issued (1,452,564)                   (1,189,349)                  

     Proceeds from retirement of CTC's 19,642                          18,383                         

Cash flows used in investing activities (8,037,664)                   (10,184,590)

Cash flows from financing activities

     Payments on lines of credit ‐                                (12,000,000)               

     Proceeds from long term debt ‐                                12,900,000                 

     Principal payments on long term debt (6,937,886)                   (6,953,929)                  

     Capital credits paid to members, net (1,039,767)                   (1,011,846)                  

     Proceeds from capital credits  331,032                       1,983,248                   

     Deposits collected from customers 84,643                          1,424                           

     Net change in memberships 1,460                            845                              

Cash flows (used) provided by financing activities (7,560,518)                   (5,080,258)

Net change in cash (695,449)                      3,711,866

Cash at December 31, 2018 and 2017 10,910,081                  4,360,481                   

Cash at November 30, 2019 and 2018 10,214,632$               8,072,347$                 

No. Receiving Service

a.

No. Minimum Bills d.

Avg. No. Receiving Service

e.

kWh Sold Cumulative

f.

Amount Cumulative

g.1. Residential Sales (excl seas.) 54,592 19 54,409 692,571,328 95,381,8122. Residential Sales Seasonal3. Irrigation Sales4. Comm. & Ind 1000 KVA or Less 1,980 9 1,967 53,003,874 6,559,3215. Comm. & Ind Over 1000 KVA 17 0 17 70,229,998 5,622,1796. Public St. & Highway Lighting7. Other Sales to Public Authority 419 1 405 50,027,581 5,281,3128. Sales for Resale - REA Borr.9. Sales for Resale - Other

10.

(1 thru 9) 57,008 29 56,798 865,832,781 112,844,62411. Other Electric Revenue xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 1,043,57512. Total (10 + 11) xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 113,888,199

THIS MONTH a.

THIS MONTH a.

YEAR-TO-DATE b.

1. Net kWh Generated . . . . . . . . 164,289 2,295,2272. kWh Purchased . . . . . . . . . . . 87,600,5663. Interchange kWh - Net . . . . . . 4. Total kWh (1 thru 3) . . . . . . . . 87,600,566 26.49 4.35

212,224 270,718January 2019

YEAR-TO-DATETHIS MONTH

688,019

4,387,905

615,760

907,566,464

865,832,781 10. Month When Maximum Demand Occurred . . .

6. Office Use . . . . . . . . . . . . . . .7. Total unaccounted For

(4 less 5 & 6), . . . . . . . . . . 23,209,045

ITEM ITEM

8. Percent System Loss (7/4)x100 . .

YEAR-TO-DATE b.

5. Total kWh - Sold . . . . . . . . . . . . 64,227,2329. Maximum Demand (kW) . . . .

907,566,464

64,227,232

548,428

PART D. CONSUMER SALES AND REVENUE DATA

5,354,249

9,008,685

xxxxxxxxxxxx

10,860,89384,909

10,945,801xxxxxxxxxxxx

PART D. CONSUMER SALES AND REVENUE DATA November 2019

CLASS OF SERVICEkWh Sold

b.Amount

c.

39,438,456

50,023,181

4,461,897

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