CALL TO ORDER MARIETTA, GEORGIA 30060 1000 EMC …...The Energy Portfolio Committee will make recommendations to the Board regarding this ... Director Malcolm Swanson, Chairman of

MINUTES OF REGULAR BO%RD OF DIRECTORS MEETING OFCOBB ELECTRIC MEMBERSHIP CORPORATION

1000 EMC PARKWAYMARIETTA, GEORGIA 30060

July 26, 2016

CALL TO ORDER

Chairman Bryan Boyd called the meeting of the Cobb Electric Membership Corporation(hereinafter ‘Cobb EMC”) Board of Directors to order at approximately 4:00 p.m. The meetingwas held in the Board Room of the Administrative Building.

INVOCATION AND PLEDGE

Rudy Underwood gave the invocation and led the pledge.

IN ATTENDANCE

The following members of the Board of Directors were present:

Bryan BoydTripper SharpDavid McClellanDavid TennantEd CrowellKelly BodnerMalcolm SwansonEric B. BroadwellRudy Underwood

Others in attendance were:

Chip NelsonDavid JohnsonRobert SteeleTim SosebeeKevan EspyJamey HulseyKristi KnightMeredith ZonsiusJenny CarrollPerla De La RosaAngie Jones

Minutes of Regular Board of Directors Meeting Page 2 of 7Cobb Electric Membership CorporationJuly 26, 2016

Tim JarrellBob SchoonoverMatthew TumlinRon YounkerKevin Moore, General CounselMatthew O’Donnell. Member GuestMark Hackett, Member GuestJackson Hartman, Member Guest

APPROVAL OF AGENDA

Director Kelly Bodner made a motion to approve the agenda, seconded by Director EricBroadwell. The motion carried unanimously.

S4FETY MESSAGE

Matthew Tumlin, Senior Infrastructure Technician delivered the Safety Message on theimportance of home air conditioning filters. Mr. Tumlin recommended changing air filters oftenwith quality filters, proven to trap particles such as pollen, dust, pet dander, and bacteria to avoidillness and stay healthy. In addition to keeping air clean, Mr. Tumlin stated quality air filters canreduce costly repairs on the unit and help save on energy bills.

APPROVAL Of PREVIOUS MINUTES

Director David Tennant seconded a motion made by Director David McClellan toapprove the minutes from the June 28, 2016 Board of Directors Meeting. The motion carriedunanimously.

RECOGMZE MEMBERS

Chairman Boyd recognized and welcomed all member guests who were present at themeeting.

REPORT FROM BUDGET AND FINANCE COMMITTEE

Director McClellan, Chairman of the Budget and Finance Committee, presented thereport from the Budget and Finance Committee Meeting held on July 25, 2016.

Director McClellan stated the Committee approved the minutes of the June 27, 2016Committee meeting. Kevin Greiner, President and CEO of Gas South, presented an update onGas South’s financial results as of June 2016. Gas South’s June net income was breakevenwhich is $500,000 favorable to budget. Gas South’s net income for fiscal year to date is$100,000 which is $600,000 favorable to the budget.

The Committee received a report on the Financial and Statistical status for the month ofJune 2016 by Robert Steele, CFO. The net margin for June is $3.4 million, which is $1.9 million


favorable to budget. The net margin year-to-date was reported at $12.7 million, which is $14.7million favorable to budget. The Balance Sheet as of the end of June is $897.2 million.

The Committee received the Power Supply Update for the month of June 2016 by DavidJohnson, COO. The report included a recommendation for the Wholesale Power CostAdjustment (WPA) to zero imls on member’s bills rendered in August 2016. The Budget andFinance Committee presented to the Board a recommendation to approve the staff recommendedWPA of zero mils starting August 1,2016. Chairman Boyd called for a vote on the motion fromthe Committee, there being no second necessary, the motion to approve the recommendationcarried unanimously.

Director Ed Crowell noted the WPA adjustment for July of -16 mils represented a total of$6.0 million saved by members during the month of July.

Tim Sosebee, Vice President of Business Operations, presented to the Committee a reporton “write-offs” for the month of June 2016 for $61,843.

Robert Steele presented to the Committee an update on the Shea Capital CreditsSettlement. The 2016 payments for members that chose “option two” is scheduled for lateAugust 2016. The payments will be for retirements of the 1992 vintage year capital credits. Mr.Steele noted the Garden City Group’s capital credit administration is transferring to Cobb EMCwithin the next few months.

Tim Jarrell, Associate Vice President of Power Supply and Planning, led a discussion andoffered a presentation of the staff’s recommendation of natural gas hedging for 2017 through2019. The Energy Portfolio Committee will make recommendations to the Board regarding thisissue.

Chairman Boyd stated the financial reports have been reviewed and ready for submittal tothe auditors.

REPORTS FROM COMMITTEES

Audit Conunittee

Director Rudy Underwood, Chairman of the Audit Committee, stated the Committee didnot meet and there was no report at this time

Public Affairs and Education Committee

Director Kelly Bodner, Chairperson of the Public Affairs and Education Committee,stated the Committee did not meet and there was no report at this time. The Committee plans tomeet in August.

Governance Committee

Director Ed Crowell, Chairman of the Governance Committee, stated the Committee didnot meet and there was no report at this time. The Committee plans to meet in August.


Affiliated Transactions Committee

Director Eric Broadwell. Chairman of the Affiliated Transactions Committee, stated therewas no cause for the committee to meet and, therefore, no report at this time.

Energy Portfolio Committee

Director David Tennant, Chairman of the Energy Portfolio Committee, stated theCommittee met on July 7, 2016. The following is a summary of the actions and reports from themeeting:

• Kevan Espy, Vice President of Marketing and Corporate Communications, offeredupdates on the following:- 14,181 members are now on Smart Choice rate- An online focus group was utilized to gather perceptions about our notifications andthe rate. An additional focus group scheduled for fall 2016, will provide feedbackregarding peak hours.- August 2016 is the new target date for marketing for Even Bill

• Alan Freeman, Director Distributed Generation, offered a presentation on theCooperative Solar Program. Mr. Freeman gave an overview of the program launched inNovember 2015.

• The Committee received an update on hedging for 2016 from Tim Jarrell. The reportincluded a recommendation to hedge approximately 29 percent of the applicablecontracts through 2019 with contracts broken down as follows: up to 340 contracts for2017 and 2018, and 240 contracts for 2019. The Energy and Portfolio Committeepresented to the Board a recommendation to approve the staff endorsed recommendationfor up to 340 contracts for 2017 (29 percent) and 2018 (30 percent), and 240 contracts for2019 (29 percent). Discussion was held regarding the hedging recommendation.Director Rudy Underwood made a substitute motion to table the hedgingrecommendation until the next regularly scheduled Board meeting to allow the Boardadditional time for review; seconded by Director Eric Broadwell. The substitute motionto table the recommendation carried unanimously.

Human Resource Committee

Director Malcolm Swanson, Chairman of the Human Resource Committee. stated theCommittee met on July 6, 2016 to discuss the strategic plan and a benefits package. TheCommittee plans to meet again in August.

APPROVE APPLICATIONS AM) CANCELLATIONS Of MEMBERSHIPS

Chip Nelson, President and CEO, presented the Applications and Cancellations ofMemberships report, stating there were 2,482 activations and 2,279 cancellations, resulting in anet positive of 203 new members in the month of June. Net additions for the year total 1,164 andthe member count as June 1. 2016 was 181,037.


Director Broadwell made a motion to approve the applications for new memberships andapprove cancellations of memberships, as presented. seconded by Director Bodner. The motioncarried unanimously.

REVIEW SAFETY REPORT

Jamey Hulsey, Senior Vice President of Electric Operations presented the June 2016Board Safety Report. Mr. Hulsey received a message from Southern Company’s TransmissionVice President, Danny Lindsey, who witnessed one of our drivers practicing safety behind thewheel. In his note, Mr. Lindsey praised the driver for his responsible and quick decision-makingand thanked Cobb EMC for its continued commitment to safety. Mr. Hulsey stated theincreasing number of employees who practice safety and are participating in the safety rewardsprogram at Cobb EMC has attributed to a “safety first” culture at Cobb EMC.

,June 2016 Results• June Safety Meetings - attendance remains at 100% for all departments.• Preventable Vehicle Accidents - reviewed and compared annual totals for 2012 through

2016 with one preventable vehicle accident occurring in June 2016 and nine year-to-date.• Safety Violation Incidents — reviewed and compared annual totals for 2012 through 2016

with five safety violations occurring in June 2016 and twenty-three year-to-date.• Recordable Injury Comparison — reviewed and compared annual totals for 2012 through

2016 with two non-violation injuries occurring in June 2016 and six year-to-date.• Incident / DART Rate (includes preventable and non-preventable injuries) — reviewed

and compared annual totals for 2012 through 2015. Cobb EMC’s year-to-datecumulative incident rate was 1.17, which decreased significantly from the 2015 rate of3.74 and the year-to-date dart rate was 0.77, which also decreased significantly from the2015 rate of 2.55.

• 2016 Safety Goal = 100 percent — due to one violation injury in 2016, a daily success rateof 99.4 percent has been achieved; 181 out of 182 days has passed without a violationinjury, with 97 days since the last violation injury.

Percenta%e of Safety Participation

Mr. Hulsey presented on the yearly percentage of safety participation since 2014.Yearly totals for 2014 were 30.9 percent, 42.1 percent in 2015 and 76.60 percent in 2016. Mr.Hulsey noted Cobb EMC’s ongoing commitment to safety is evident in these increasingnumbers.

REPORT FROM PRESIDENT AND CEO

Chip Nelson, President and CEO, distributed the July 2016 edition of the Cobb EMCpublication “Plugged In” to the Board. Mr. Nelson reviewed some of the information in thebrochure, which included the July employee event, attended by several members of the Board.Mr. Nelson thanked members of staff who volunteered for the dunking booth raising $1,078 indonations from Cobb EMC employees for the Fallen Linemen Organization.


MARKETING AND CORPORATE COMMUNICATIONS REPORT

Kevan Espy, Vice President of Marketing and Corporate Communications, presented theJune 2016 Marketing and Corporate Communications report.

Mr. Espy reported on Cobb EMC’s Cooperative Solar initiative launched November 1,2015. The 2016 goal for solar blocks sold is 1,000 and as of June 2016, 158 members havepurchased 406 blocks on the program. Mr. Espy reported on Smart Choice accounts for June2016. which totaled 3,498 active accounts and an opt-in number totaling 78. Year-to-dateaccounts total 16,817. The marketing campaign officially launched in June to promote the SmartChoice Rate.

Mr. Espy presented a report on secured media highlights noting the Cobb EMC HomeEnergy Efficiency Makeover received excellent coverage. Mr. Espy reviewed unpromptedmedia coverage from 2015 and 2016 and recent social media highlights such as LinemanAppreciate Day in April and the installation of a solar array installation at the Cobb EMCBuilding at the Cobb County Safety Village. Mr. Espy also reviewed social media engagementfrom Twitter and Facebook.

Mr. Espy reported total Community Foundation distributions for July totaled $70,400.

J.D. Power and Associates Update

Mr. Espy reviewed the results from the most recent J.D. Power and Associates surveynoting the most improved brands for 2016 verses 2015 in the large, midsize, and cooperativesegment. Cobb EMC improved 42 points in the midsize and cooperative segment and scored735 for 2016, the highest ranking Cobb EMC has ever received.

REPORT FROM GENERAL COUNSEL

General Counsel, Kevin Moore, stated he had nothing to report at this time.

REPORT FROM DIRECTORS

1. Director Boyd stated he attended the July employee event.2. Director Swanson commented he has received positive feedback from members regarding

our Tweets, which are proving to be effective.3. Director Bodner stated she continues to receive excellent feedback from members

regarding the Smart Hub program.4. Chairman Broadwell reported he attended the 2016 CoBank Energy Directors Conference

and had a member thank him and Cobb EMC for the credit she received on her Julyinvoice.

5. Director Underwood reported he attended the 2016 CoBank Energy Directors Conferencein July.

6. Director Crowell thanked Kevan Espy and his team for the outstanding job they are doingthe area of marketing and communications for the cooperative.


OLD BUSINESS

Chairman Boyd stated there was no old business at this time.

NEW BUSINESS

Set Record Date for Annual Meeting

Kevan Espy brought to the Board the requirement to set a Record Date for the AnnualMeeting scheduled for September 17, 2016, per Section 2.05 of the Cobb EMC Bylaws. Mr.Espy proposed July 26, 2016 as the Record Date. Director Crowell made a motion to accept thestaff recommendation; seconded by Director Broadwell. The motion carried unanimously.

EXECUTIVE SESSION

Director McClellan made a motion to enter Executive Session to discuss personnelmatters including the results of the employee survey; seconded by Director Tennant. The motioncarried unanimously.

The Directors went into Executive Session.

Motion by Director McClellan to exit Executive Session, seconded by Director Tennant,the motion carried unanimously.

ADJOURNMENT

There being no further business, Director McClellan made a motion to adjourn themeeting; seconded by Director Tennant. The motion carriedainanimously.

Malcolm SwansonSecretary/Treasurer

Documents

CALL TO ORDER MARIETTA, GEORGIA 30060 1000 EMC …...The Energy Portfolio Committee will make recommendations to the Board regarding this ... Director Malcolm Swanson, Chairman of