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CONNECTIONSinging River Electric Power Association2010 Annual Report

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POWERLINES

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Construction foreman James Daughtery and lineman Justin Eure (left) work with construction

foreman James Dickerson and lineman Kris Goss to construct power lines near the St. Martin sub-

station. On the Cover: Power lines on Tucker Road in west Jackson County.

Dear members,

Singing River Electric’s power lines carry more than electricity. They carry a better quality of life, dreams of our mem-bers and the means for economic growth. Your cooperative has assisted community colleges, rural hospitals and localbusinesses in receiving zero-interest loans. We have also partnered with state and local economic development agenciesto create jobs in our communities. Economic growth in our service area remains slow; however, our communities remain abright spot of progress in the state.

In addition to working to create jobs last year, Singing River Electric implemented several technological improve-ments. A customer service software conversion enabled us to adopt an Outage Management System and InteractiveVoice Response (IVR) automated phone system that work together to improve customer service and shorten outageresponse times. The IVR system also offers many convenient billing and payment services over the phone.

In 2010, Singing River Electric took the opportunity during the economic downturn to reinvest in our infrastructure.Our crews constructed one new substation and completed major upgrades to four more. The expansion of one substa-tion, construction of two new substations and upgrades to several power lines are currently taking place. These effortswill allow Singing River Electric to be prepared when the economy turns around to handle growth for many years.

CEO Messageto members

General manager and CEO Lee Hedegaard presents a Guatemalan family with an electric meter shortly before they received electricity in their home for the first time.

Singing River Electric Power AssociationGeneral Manager and Chief Executive Officer

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RELIABLESERVICE

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Singing River Electric crews work to restore power in Wayne County after a snow storm in

February 2010. Wayne, Perry and Greene counties received between 2-5” of snow. Singing River

Electric crews restored power to about 75 homes and businesses due to the storm.

Cooperative overview

Formed in 1938, Singing River Electric Power Association is an electric distribution cooperative serving residential,retail and commercial members in Jackson, George, Greene, Perry, Wayne, Stone and Harrison counties in Mississippi, aswell as Mobile and Washington counties in Alabama.

The second largest electric co-op in Mississippi, Singing River Electric currently provides electric service to 70,512meters and is the 44th largest of more than 854 electric co-ops in the nation.

The cooperative’s mission is to provide safe and reliable electric service at the lowest possible cost while promotingenergy efficiency and enhancing the lives of the members and communities we serve.

The goal of low-cost service is achieved by working with South Mississippi Electric Power Association, our generationand transmission cooperative, to purchase a diversified generation fuel mix of coal, natural gas, nuclear and hydropower.Mixing fuel sources helps absorb the impact of a rise in cost of one particular resource alone.

However, electricity is a good value all by itself. For example, over the past 10 years, gasoline has shot up 10.9 percenton average every single year, according to the U.S. Bureau of Labor Statistics. A loaf of white bread has increased 4.2 per-cent annually, and a dozen eggs 6.5 percent per year.

In comparison, electricity has increased just 3.6 percent a year in the past decade for Singing River Electric members.This is below the national average. When you consider how reliable electricity is, the value goes up even more.

Years in business: 72Areas served: Jackson, George, Greene, Perry, Stone, Wayne andHarrison counties in Mississippi; Mobile and Washington coun-ties in AlabamaProvided electric service to:70,512 meters (44th largest cooperative in nation)88% residential meters12% commercial and industrial metersKilowatt-hours sold in 2010:1.5 billionMiles of line maintained:6,984Employees:188Wholesale power provider:South Mississippi ElectricHattiesburg, Mississippi

Wholesale power resources:Coal - 48.3%Natural Gas - 33.6%Nuclear - 8.9%Hydro - 2.9%Economy purchases - 6.3%

Singing River Electric Power AssociationCooperative facts

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EFFICIENCY

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Member services representative and certified energy manager Nick DeAngelo (right) discusses the

value of compact fluorescent light (CFL) bulbs with Singing River Electric member Glenn Freeman.

The CFL brochure and more are available for download at www.singingriver.com.

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Helping members manage energy use

Changing electric usage behaviors can result in lower monthly electric bills. Singing River Electric employees made aspecial effort to share this knowledge and partner with members in 2010 by providing tools, tips and opportunities fordecreasing power consumption.

Member services representatives promoted energy-efficient tips in the Today in Mississippi publication on topics suchas HVAC maintenance, appliance use, thermostats, energy calculators and heat pumps. They also spoke to communitygroups, worked with home builders to certify 233 Comfort Advantage homes and performed over 800 free energy auditsfor residential and commercial businesses.

Singing River Electric’s trained and certified energy managers completed in-depth audits for several school districtsincluding George County and Ocean Springs. Issues were identified, solutions and improvements were suggested andboth districts are now seeing savings due to smart usage and planning.

Residential customers received similar invaluable instruction on how little changes can add up to big savings withthe Together We Save campaign. Ads, articles, brochures and a website (www.togetherwesave.com) focused on encourag-ing changes in electric usage habits. Changes were as simple as replacing an incandescent bulb with a CFL bulb andinstalling a programmable thermostat.

In addition, Singing River Electric continued to keep its members informed about issues including federal tax andappliance rebate incentives available in 2010. The programs were available to local residents who were making qualifiedhome improvements and appliance purchases within specified months of the year.

Singing River Electric’s website(www.singingriver.com) is an onlinetool accessible to members all thetime, day and night. From this web-site, a member can find energy-effi-ciency tips, e-mail questions to amember services representative,download a new brochure, make apayment on a bill and stay up-to-

date with the latest happenings at Singing River Electric. Having allthese capabilities online along with the energy saving information ofwww.togetherwesave.com, members have the power to take controlof their energy goals. In addition, the Residential Energy Calculatorallows members to take a virtual walk through their home and identi-fy energy savings measures personal to their lifestyle that can add upto big savings.

Website and Energy CalculatorsEmpowering members with tools to manage energy usage

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TECHNOLOGY

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Dispatchers (l to r) Bruce Ward and Jessie Ludgood respond to an outage alert due to severe

weather. The Outage Management System shortens outage response times by collecting outage

information while dispatchers work behind the scenes to dispatch crews.

Providing added convenience and reliability through technology

Through the Interactive Voice Response (IVR) automated phone system, members can inquire about their account,pay their bill and report power outages easier and faster than before. Introduced in July 2010, callers use their telephonekeypad and Singing River Electric account number to hear their current balance and details of their last payment.Payments made through IVR and online through Singing River Electric's website make up 25 percent of all paymentsreceived. IVR's purpose is to make a member's phone experience more productive and efficient and provide another wayto conduct business.

A new Outage Management System (OMS) is connected to IVR and together they shorten outage response time bycollecting power outage information and calling back members to confirm power restoration. This allows Singing RiverElectric dispatchers to work behind the scenes and dispatch crews to additional locations if necessary. An important OMSfeature is the ability to predict how extensive an outage is based on the number and location of calls. By determiningwhether a tap, circuit or substation is affected, dispatchers can decide how much help is needed.

In April 2010, Singing River Electric installed new customer service software, along with the IVR and OMS systems.This software allowed the customer service function of the business to be integrated with the accounting, engineeringand AMR functions.

Singing River Electric's AutomatedMeter Reading (AMR) projectreached completion in 2010 withmeters installed capable of sendingand receiving information, substa-tions equipped with the necessaryhardware and meter readingsdelivered through the power linesto generate member’s electric bills.

The use of this new technology improves efficiency and accuracy ofreadings and provides data to help Singing River Electric's memberservices representatives track a member's energy use and suggestspecific ways to change electricity usage habits and reduce electricitycosts. AMR is one function of the Advanced Metering Infrastructuresystem (AMI) installed. Singing River Electric will continue implement-ing other features of the AMI system to further improve efficiency ofservices provided to members.

Automated Meter ReadingImplemented fully across the service territory in 2010

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EXPERIENCEDEMPLOYEES

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Substation technician Kennith Mallette and lineman Steven Smith work on the McLain substa-

tion. Singing River Electric employees plan and build their own substations. This process gives

employees specialized knowledge of the construction and operation of the substations.

Power lines of all kinds receivedattention in 2010. Singing RiverElectric crews replaced sections ofcopper wire with aluminum wire inareas of George, Greene and Perrycounties. While copper is a goodconductor of electricity, the reliabil-ity of the copper lines due to theirage was a concern and replacing it

meant improved service for members. Singing River Electric employ-ees and contract crews replaced and improved underground facilitiesin Gautier's College Park subdivision and Ocean Springs' HeronBayou subdivision. Line upgrades to improve voltage and increasecapacity occurred in Wade, Escatawpa and Moss Point.

Power Line MaintenanceImproving lines that bring power to Singing River Electric members

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Building facilities to provide reliable service

While the economy was sluggish and building and home construction were slow, Singing River Electric crews per-formed maintenance on power lines and substations as well as new substation construction. The work fulfilled goals ofthe cooperative’s long-range planning and placed Singing River Electric in a good position to handle the current andfuture electric needs of members as the economy begins to improve.

In 2010, crews built Tucker Road substation in west Jackson County as well as completed upgrades to St. Martin,Hamill Farm, Benndale and Agricola substations in Jackson and George counties. These upgrades were made to meetincreased residential and commercial growth in the areas.

In 2011, Singing River Electric plans to continue these improvements by expanding a substation in Vancleave andbeginning the planning and construction process for two more substations: Sunplex in Ocean Springs and Baria Road inthe Hurley community. These improvements are also needed to meet the needs of current or proposed residential andcommercial development.

Construction of new substations at new locations can take up to four years to complete including siting, permittingand construction of transmission lines and the substation itself. Singing River Electric is one of very few electric coopera-tives or utilities in the state and region to plan and build its own substations. This process gives the employees special-ized knowledge of the construction and operation of substations and gives members the economic advantage of costsavings.

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ELECTRICSAFETY

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Safety coordinator Jason Havard speaks to George County Middle School students during Farm

Safety Day Camp. The program is designed to teach safety applications in areas such as electrical,

lawn mower, chemical, ATV, tractor, first aid and tobacco.

Jessica Brouckaert of OceanSprings High School, Stephen Bennof Moss Point High School, andTaylor Lowe of ResurrectionCatholic High School were selectedto represent Singing River Electricat a leadership workshop inJackson, Miss, in March 2010, aswell as a week-long tour of

Washington D.C. in June 2010. These three students were nominatedby their schools and were chosen to attend both events after partici-pating in an interview process. All candidates were required to have aminimum 3.0 grade point average, be involved in extracurricularactivities and have a parent or legal guardian who is a Singing RiverElectric member.

Youth Leadership WorkshopHelping local youth build leadership skills

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Keeping employees and members safe

Working with power lines on a daily basis keeps electric safety at the forefront of Singing River Electric employees'minds. Safety rules are reinforced year round through monthly meetings. Daily checks of personal protective equipment,like rubber gloves and tools used to work on energized lines, ensure the effectiveness of the equipment as does theannual dielectric testing of all trucks, buckets and hot sticks. In 2010, Singing River Electric issued new flame retardantuniforms that provide an even greater level of protection.

In response to the Gulf of Mexico oil spill, employees attended hazardous material training designed for utility line-men who may have to restore power along the oil-stained coast and marshes in the event of a major storm or hurricane.Singing River Electric continues to evolve its safety training to stay on top of any challenges an employee couldencounter while working.

Educating members on electric safety is a priority for Singing River Electric as shown by the presentation of SafetyCity to 10,000 students and adults teaching them to stay away from power lines. This message was reinforced throughSinging River Electric's safety campaign with other Mississippi electric utilities encouraging people to Stay Away and StayAlive through newspaper, radio and television ads. Safety was the focus in May 2010 during Electric Safety Month withtips appearing in Today in Mississippi and during hurricane season with generator safety.

Presenting Safety City in local schools and community events is just one way Singing River Electric supports educa-tion. Employees introduce electric utility job opportunities at career days. Thousands of dollars in scholarships are donat-ed each year to high school seniors through Explosion of Excellence in Jackson and George counties and more.

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GOOD NEIGHBOR

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Linemen from Guatemala work with villagers and oxen to transport power poles to the desired

location to build the lines and bring electric power to villages. The terrain is extremely rocky and

full of inclines which makes it too difficult to use a bucket truck to do the work.

Giving back to community

Concern for Community is one of the seven cooperative principles. Cooperatives serve their members most effective-ly and strengthen the cooperative movement by working together through local, national, regional and internationalstructures.

The partnership with National Rural Electric Cooperative Association (NRECA) International brought several linemenand engineers to Jalapa, Guatemala, last year. The trip was funded and coordinated by NRECA International Foundation.This experience was unique in that the Singing River Electric crew was joined by a five-man crew from East MississippiElectric Power Association (EMEPA) based in Meridian. Also, this trip was planned with enough lead time to allow SingingRiver Electric and EMEPA to solicit donations from across the state and nation. A container was sent ahead of the crewwith 30,000 pounds of materials totaling $80,000 in donations. In addition, two line trucks were donated and arrived inGuatemala ahead of the crew.

“These donations made a world of difference in what we were able to accomplish during this trip,” said Singing RiverElectric general manager and CEO Lee Hedegaard.

The crews traveled out on Sunday, Oct. 17, and returned on Saturday, Oct. 30. They worked alongside linemen fromthe Municipal of Jalapa. Singing River Electric crews also instructed the Jalapa crews in safe work practices, line construc-tion and how to use the new trucks before leaving to return home.

Singing River Electric supports localcommunities through theNeighbors Helping Neighbors com-munity grant program. Thesegrants were created in December2000 and since then have awardednearly $140,000 in communitydonations. These funds have pur-chased car seats, school books,

solar panels for a car, accelerated math programs, graphing calcula-tors, laptops and printers, and much more. Applicants must have anon-profit status and submit information about their project. Theitems purchased must help as many adults or children as possibleand cannot be disposable or intangible items. These requirementsensure the grant’s investment in the community for years to come.

Neighbors Helping NeighborsCommunity Grant Program

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Management

Lee Hedegaard, General Manager and CEO

Mike Smith, Assistant Manager/Director of Engineering

Dianne Davis, Executive Assistant

Sarah Sue Bray, Manager of Office Services

Jeff Catlett, Engineer

Tom Davis, System Engineer

Lorri Freeman, Manager of Communications

Brian Hughey, Engineer

Tammy Hultz, Manager of Accounting and Finance

David Miller, Manager of Information Technology

Ace Necaise, Gautier District Manager

Annette Riley, Manager of Human Resources

Buck Williams, Manager of Risk Management and

Right of Way

Board of Directors

District 1Ralph Hicks, PresidentFarmer, Timber Producer and Cattleman

District 3Ronald “Bo” Hall, Vice-PresidentDental Laboratory Technician

District 3Kristal Sisson, SecretaryEducator

District 1Cary Williams, TreasurerCPA / Financial Planner

District 2Roy GrafeRetired Mechanical Engineer

The Cooperative Difference - Singing River Electric Power Association is a not-for-profit, member-owned elec-tric cooperative. As a cooperative, we operate by the seven cooperative principles: Voluntary and OpenMembership, Democratic Member Control, Members’ Economic Participation, Autonomy and Independence,Education Training and Information, Cooperation Among Cooperatives and Concern for Community.

District 2Travis Baxter, SMEPA Board RepresentativeRetired Shipyard Supervisor

District 2G.A. “Don” ParnellRetired Justice Court Judge

District 3Frank ElyRetired Mississippi Highway Patrol and

Mississippi Legislator

Board Consultants:Mark Maples, Board AttorneyMaples Attorney at Law

Terry Mitchell, CPAJackson Thornton & Co.

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Service Area

Singing River Electric Power Association provides electric service to members in Jackson,George, Greene, Perry, Wayne, Stone and Harrison counties in Mississippi as well as Mobileand Washington counties in Alabama. The cooperative provides electric service to 70,512meters and 97 percent of the landmass in Jackson, George and Greene counties.

Affiliates

South Mississippi Electric Power Association is a generating and transmission cooperative based in Hattiesburg. SouthMississippi Electric provides generation service to over 411,000 meters through its 11 member distribution systems,including Singing River Electric Power Association.

Electric Power Association of Mississippi represents 26 electric power associations in the state. The statewide tradeorganization assists cooperatives with issues involving safety, employee training, communications (including Today inMississippi), and legislative matters, as well as coordinates the annual Youth Leadership Program and assistance for coop-eratives during natural disasters.

National Rural Electric Cooperative Association is a national service organization which assists cooperatives in devel-oping policy positions on national issues and offers group insurance, retirement benefits, management training, confer-ences and safety training.

Touchstone Energy is a national alliance of 680 local, consumer-owned electric cooperatives providing high standards ofservice. Touchstone Energy cooperatives deliver energy to more than 30 million customers in 46 states every day.Touchstone Energy cooperatives serve their members with integrity, innovation, accountability and a long-standing com-mitment to communities.