CALL TO ORDER MARIETTA, GEORGIA 30060 Electric ... Site...Cobb EMC hosted the Kennesaw Business Association Expo held on February 26, 2019 where 150 business owners visited our exhibition

MINUTES OF REGULAR BOARD OF DIRECTORS MEETING OFCOBB ELECTRIC MEMBERSHIP CORPORATION

1000 EMC PARKWAYMARIETTA, GEORGIA 30060

March 26, 2019

CALL TO ORDER

Chairman David McClellan called the meeting of the Cobb Electric MembershipCorporation (hereinafter “Cobb EMC”) Board of Directors to order at approximately 4:00 p.m.The meeting was held in the Board Room of the Administrative Building.

INVOCATION AND PLEDGE

Bryan Boyd gave the invocation and led the pledge.

IN ATTENTANCE

The following members of the Board of Directors were present:Bryan BoydTripper SharpDavid McClellanDavid TennantKelly BodnerMalcolm SwansonEric B. BroadwellRudy UnderwoodEd Crowell

Others in attendance were:

Peter Heintzelman, CEOTim SosebeeKristi KnightKevan EspyMark GoddardTim JarrellRon YounkerLeslie ThompsonJenny CarrollPerla De La RosaJim GanttTodd Lambert

Minutes of Regular Board of Directors Meeting Page 2 of 9Cobb Electric Membership CorporationMarch 26, 2019

Diane Nix, Member GuestAngela Strickland, Member GuestKevin Moore, Genera] Counse]

APPROVAL OF AGENTA

Mark Goddard, Interim Director Marketing and Corporate Communications, requestedthe Cobb EMC Community foundation Quarterly Report be removed from the agenda. Mr.Goddard stated that this report would be given during the April Board Meeting. Director Bodnerasked for a Board Shared Calendar update to be added under Old Business.

Director Tennant made a motion to approve the agenda, as amended, seconded byDirector Boyd. The motion carried unanimously.

SAFETY MESSAGE

Todd Lambert, IT Systems Engineer III, delivered the Safety Message on how to makeyour home less appealing to criminals. Mr. Lambert offered the following tips to deter crooks:

• Always lock the doors to your home• In the evening, leave the porch light on• Install an alarm system and display the alarm company’s sign in your yard• Consider purchasing a video door bell• In stall flood lights around your home with motion detectors• Consider using a device such as Alexa to program lights to turn on and off randomly

throughout the day• When on vacation, do not posts pictures or messages announcing to would be crooks that

you are out of town

APPROVAL OF PREVIOUS MINUTES

Chairman McClellan called for a vote to approve the minutes from the February 26, 2019Board of Directors Meeting. Under New Business, Director Broadwell recommended changingthe phrase “the scholarship donation amount has not been adjusted in 20 years” to “many years”.

Director Tennant made a motion to approve the agenda, with the noted change, secondedby Director Crowell. The motion carried unanimously.

RECOGNIZE MEMBERS

Chairman McClellan welcomed member guests Diane Nix and Angela Strickland to themeeting.

REPORT FROM BUDGET AM FINANCE COMMITTEE

Director Underwood, Chairman of the Budget and finance Committee, presented thereport from the Budget and Finance Committee Meeting held on March 25, 2019.


Director Underwood stated the Committee approved the minutes of the February 25,2019 Committee meeting. Kevin Greiner, President and CEO of Gas South, presented an updateon Gas South’s financial results as of February 2019. Gas South’s net income for February wasreported at $2.9 million, which is $2.5 million unfavorable to budget. For the fiscal year to date,Gas South’s net income is $13 million which is $5.3 million unfavorable to budget.

The Committee received the Financial and Statistical Report for Cobb EMC for themonth of February 2019 by Brett Stovern, Chief Financial Officer. The net margin for Februarywas reported at $1.8 million which is $600,000 unfavorable to the budget.

Mr. Stovem presented the 2018 Member Income Allocation that disclosed a net taxableloss that will carry over to 2019. No margins will be allocated to members for 2018.

Tim Sosebee, Senior VP of Business Operations, presented to the Committee a report on“write-offs” for the month of February 2019 for $54,999.

In Old Business, Committee Chairman Underwood offered an update from the Budgetand finance Subcommittee on the Pay as You Save Program (PAYS). The sub-committee metto discuss the program, and staff is working on a business case to explore the PAYS Program andother similar programs. The sub-committee plans to meet in April to review the results of staff’sfindings and a report will be offered during the April Board Meeting.

Tim Jarrell, Vice President of Power Supply and Planning, reported on the Power CostUpdate for the month of February. The Committee received a staff recommendation for theWholesale Power Cost Adjustment (WPA) of zero mils on member’s bills rendered in April2019. The Committee recommended the Wholesale Power Adjustment (WPA) of zero mils forthe month of April 2019. The WPA will be reviewed monthly and adjusted if necessary.

Chairman McClellan called for a vote on the motion from the Committee to approve therecommendation of a Wholesale Power Adjustment of zero mils starting April 1, 2019, withconsideration thereof monthly. There being no second necessary, the motion to approve theCommittee’s recommendation, with consideration thereof monthly carried unanimously.

Mr. Jarrell presented a Review of Avoided Costs that included a recommendation for a2019 rate of $0.03828. The Committee approved staff’s recommendation for the suggested rate.Discussion was held, and it was noted that Cobb EMC pays for the redistributed generationwhich goes back to the system.

Chairman McClellan called for a vote on the motion from the Committee to approve therecommendation of a 2019 avoided costs rate of $0.03828. There being no second necessary, themotion to approve the Committee’s recommendation carried unanimously.

Chairman McClellan stated the financial reports have been reviewed and are ready forsubmittal to the auditors.

REPORTS FROM COMMITTEES

Audit Committee

Director Broadwell. Chairman of the Audit Committee, stated the Committee plans tomeet April 17, 2019.

Public Affairs and Education Committee


Director Swanson. Chairman of the Public Affairs and Education Committee. stated theCommittee met on March 21, 2019 and discussed the following

• Engaging younger members with Cobb EMC• Transparency communications which include applying seven cooperative principles;

open and voluntary membership, democratic member control, member’s economicparticipation, autonomy and independence, education/training/information, cooperationamong cooperatives, and concern for community

• Preliminary planning for the upcoming Annual Meeting in September

Mark Goddard, Interim Head of Marketing and Corporate Communications, offered theCommittee a report on the history and establishment of the scholarship program at Cobb EMC.Mr. Goddard offered the report to address Director Broadwell’s recommendation requestingCobb EMC match scholarship funds for the Cobb Leadership Program (formerly entitled,Washington Youth Tour). Mr. Goddard noted that the Women’s Task Force was presented withthis recommendation and voted unanimously not to increase the funds.

A discussion was held regarding the scholarship program, its funding and the purpose itserves.

Director Broadwell made a motion to have Cobb EMC match the funds for thescholarships for the Cobb Leadership Program, seconded by Director Boyd. The motion failedby a vote of 8-1.

Governance Coimnittee

Ed Crowell. Chairman of the Governance Committee, stated the Committee did not meet,but plans to meet in April of 2019.

Energy Portfolio Committee

David Tennant, Chairman of the Energy Portfolio Committee, stated the Committee didnot meet and there was no report at this time.

Human Resource Committee

Director Bodner, Chairperson of the Human Resource Committee, stated the Committeedid not meet, but plans to meet in April after the new Vice President of Human Resources hasbeen selected.

APPROVE APPLICATIONS AND CANCELLATIONS Of MEMBERSifiPS

Peter Heintzelman, President and CEO, presented the Applications and Cancellations ofMemberships report, stating there were 1,443 activations and 1,252 cancellations, resulting in191 net new members in February. The member count year to date is 352 and the total membercount as of February 1,2019 was 185,259.

Minutes of Regular Board of Directors Meeting Page 5 of 9Cobb Electric Membership CorporationMardi 26, 2019

Director Broadwell made a motion to approve the applications for new memberships andapprove cancellations of memberships, seconded by Director Crowell. The motion carriedunanimously.

REVIEW SAFETY REPORT

Kevan Espy, Senior Vice President of Operations, presented the february 2019 BoardSafety Report.

February 2019 Results

• February Safety Meetings - attendance is 100% for all departments, which includes 43total make-ups

• Preventable Vehicle Accidents - displayed annual totals from 2015 through 2019 withzero preventable vehicle accidents occurring in February 2019 with a total of one year-to-date

• Safety Violation Incidents - displayed annual totals from 2015 through 2019 with zerosafety violations occurring in February 2019 with a total of one year-to-date

• Recordable Injury Incidents - displayed annual totals from 2015 through 2019 with onenon-violation, and zero violations injuries occurring in February 2019. There have beenthree non-violation and zero violation injuries year-to-date

• Incident / Days Away, Restricted, or Transferred (DART) Rate (includes preventable andnon-preventable injuries) - displayed annual totals from 2015 through 2019. CobbEMC’s year-to-date cumulative incident rate is 0.8 and the year-to-date DART rate is0.27.

• Safety Goal for 2019 = 100 percent — the 2019 daily success rate is 100 percent; 59 out of59 days have passed without a violation injury this year and 552 days have passed sincethe last violation injury

Safety Participation

Yearly totals for safety participation in 2016 were 79.7 percent. 87.53 in 2017 and 100percent in 2018. The year-to-date Safety participation total for 2019 is 68.73 percent.

Mr. Espy stated he made an addition to the Safety Report entitled, Operation Updates, tokeep the Board abreast of happenings in this department. Operations Updates for the monthinclude;

• fuel savings - moving away from E-85 fuel for 50 vehicles• Shifted and created job responsibilities to have better oversight over contractors• Continuing quarterly, small group meetings to improve communication• In April, planning will begin on the two-year work plan for 2020-2021• Striving to improve job specifications with inventory


Notes of Interest

• Director Crowell requested Mr. Espy provide a recordable injuries report from 2018 topresent at the April Board Meeting

• Mr. Moore recommended the monthly Safety Report be renamed Safety and OperationsReport to better reflect the content within the report

• Mr. Heir tzelman announced he and Mr. Espy would be hand-delivering refreshments onWednesday, March 27, 2019 to Cobb EMC crews as a show of appreciation and thanksduring Lineman Appreciate Month

MARKETING AND CORPORATE COMMUMCATIONS REPORT

Mark Goddard, Interim Head of Marketing and Corporate Communications, presentedthe February 2019 Marketing and Corporate Communications report.

Mr. Goddard discussed the Electric Vehicle (EV) initiative. Currently, 360 members areon the NiteFlex Rate. Of the 360 members, 273 chose to opt-in, 87 are new connects, 198 ownan electric vehicle and 14 own two or more EVs.

Cobb EMC hosted the Kennesaw Business Association Expo held on February 26, 2019where 150 business owners visited our exhibition. Upcoming Cobb EMC events include aHabitat for Humanity Build in June of 2019 (details to be provided later), a Homeowner’sAssociation Meeting on April 25 at 6:30 in the Auditorium and a Recycle Day on April 27, 2019from 8:00 am. to 1:00 p.m. at Cobb EMC near Building 4000.

Mr. Goddard reported Foundation distributions for March totaled $71,600.

REPORT FROM PRESIDENT AND CEO

Peter Heintzelman, President and CEO offered a presentation on activity for activity inMarch of 2019:

financial and Operational Performance

• Risk Management Committee met once again to update the heat map and form a project listand protocol going forward

• Administrative Committee met to discuss and make decisions on 401k portfolio offerings toemployees

Rates

• Ranked top 10 in the Georgia Public Service Commission Winter Rate Survey and numberthree in one of the categories

• Strong progress and diverse usage of new rate choices for members with record Even Billsignup pace


Innovation/Trusted Energy Advisor

• Progressed view/research of PAYS and like programs• Hosted EV Seminar - very well attended• Continuing with Broadband research/feasibility• Attended multiple meetings at the NRECA Annual Meeting’s Tech Advantage expo

regarding technical opportunities• Attended NextEra’s renewables conference - good battery storage content• Asked to conduct presentation on Electric Vehicles at CoBank Conference in June

HR and Employee Engagement

• Kom ferry Compensation Study revised with 2019 salary data• Conducted the VP of HR final interview — a decision will be made by end of this week• VP Marketing interviews started this week• Director of Procurement — three interviews are scheduled for this week• Held three town halls with Heart of Leadership message

Community Engagement and Public Relations

• Experienced high involvement with legislative process and GEMC• Conducted regular calls with metro area and other EMC managers on current events• Chaired first Cobb Chamber International Committee Meeting in preparation for first event• Serving as the co-fundraising chair for Whitney Young memorial lunch to raise money for

Boy Scouts of America• Produced strong monthly public relations with videos and social media per media plan• Produced short video for young leaders

REPORT FROM GENERAL COUNSEL

General Counsel, Kevin Moore, reviewed Policy 601 with the Board. Per Policy 601,Cobb EMC’s legal counsel shall review this policy with the Board on an annual basis by the endof the first quarter of each calendar year and discuss any personal liability implications resultingfrom violations.

Policy 601 addresses Director Duties, Responsibilities, Standards of Conduct, andProfessional Development. Each Director was given a copy of Policy 601 to review and sign.

Mr. Moore read various excerpts from the policy to emphasize its importance:“The Board of Directors shall direct the affairs of Cobb EMC. All the powers of this

corporation/cooperative are held solely by the Board of Directors, except such powers that havebeen conferred upon or reserved for the member-owners by statute or by the cooperative’sArticles of Incorporation or bylaws. Ultimate responsibility for the cooperative’s performanceresides in the board. Herein is a listing of these duties and responsibilities. In addition, this policywill establish standards whereby these powers may be exercised in the best interests of thecooperative. Further, it shall be the policy of Cobb EMC to expect its Directors to gain andmaintain the knowledge and skills necessary to function actively and effectively as members of


the Board of Directors. No Director shall seek employment with Cobb EMC, any wholly ownedcompany or affiliate of Cobb EMC, or any cooperative organization of which Cobb EMC is amember, without first submitting a resignation from the board and to the board chair”.

Mr. Moore discussed in detail the following key topics from the policy;• Fiduciary Duty - The Board of Directors has a fiduciary duty to the cooperative and its

member- owners.• Access to Cooperative Management and Information and the Duty to Maintain

Confidentiality - Directors are entitled to reasonable access to the cooperative’smanagement, data, or other information, noting a Director shall keep confidential allmatters involving the cooperative that have not been disclosed to the public

• Conduct with Respect to Fellow Directors - Regardless of any personal differences,Directors should at all times: 1. Demonstrate mutual respect, 2. Allow opportunity forevery other Director to be heard on any matter being considered by the board, 3. Refrainfrom revealing to persons other than Directors, the CEO, or the cooperative’s attorneyany differences of opinion among Directors on matters considered and acted upon by theboard. (This standard does not preclude fair and accurate publication of such differencesto the cooperative’s members in relation to contests for director elections or other mattersto be voted upon by the members. Nor does it impinge upon a director’s right to dissentand to have his or her dissenting vote recorded in the minutes.), 4. Recognize that theBoard Chair has the responsibility and authority to enforce these standards of behavior,through reminders of the standards and expectations and the issuance of a reprimand tothe director who has breached these standards, 5. Publicly support decisions of the Boardexcept in extraordinary circumstances where the Director can demonstrate that a decisionand/or action will bring harm to the cooperative or threaten the cooperative’s survival.

• The Right to Rely on Others - In the discharge of his/her duties, a Director is entitled torely on management, and Board committees of which the Director is not a member, toperform their respective responsibilities. A Director is entitled to rely upon reports,opinions, information, and statements presented by the cooperative’s management,employees, and outside advisors whom the Director reasonably believes to be competentand reliable in the matters being presented.

REPORT FROM DIRECTORS

• Director Sharp attended the NRECA Annual Meeting and noted it was an excellentconference which provided good information for him to use in his position as a Director.Director Sharp also attended the EV seminar, stating that it was well-attended bymembers, especially those who owned electric vehicles

• Director Underwood announced the upcoming Georgia EMC Director’s Conferencewould be held in August of 2019 at Jekyll Island

• Director Bodner thanked staff for providing and stationing recycling bins throughout theCooperative. Director Bodner noted the Cobb EMC sponsored Science Olympiad was agreat success and thanked Mark Justice for his work on this event. Director Bodnerparticipated in the recent Cobb EMC Habitat build and discussed an upcomingpromotional video featuring one of Cobb EMC’s younger members


• Director Crowell attended the NRECA Annual Meeting and took three classes to betterserve in his position as Director. Director Crowell noted he attended the Cobb EMCluncheon at the Capitol and the EV seminar

• Director Tennant attended the Annual Meeting and various sessions offered by theNRECA. As Cobb EMC’s Representative, Director Tennant attended the Joint Meetingof Members of OPC, GTC and GSOC. At the meeting, Georgia Transmission discussedmany of their ongoing projects

• Director Boyd attended the Annual Meeting and the Joint Meeting of Members, as ourRepresentative

• Director Broadwell attended the Annual Meeting and lunch at the Capitol• Chairman McClellan attended the NRECA Annual Meeting and the EV event which he

commented gets better with each attempt. Chairman McClellan attended the underwriterpresentation organized by Brett Stover, CFO, which he stated was informative and well-presented by Staff

OLD BUSINESS

Director Bodner requested an update on the Board Shared Calendar. Staff commentedthat the calendar was now available on the Cobb EMC intranet and instructions would beforwarded to the Board on how to access.

NEW BUSINESS

Chairman McClellan stated there was no new business to discuss.

EXECUTIVE SESSION

Director Broadwell made a motion to enter Executive Session to discuss a personnelmatter; seconded by Director Bodner. The motion carried unanimously.

Motion by Director Tennant to exit Executive Session, seconded by Director Crowell, themotion carried unanimously.

ADJOURNMENT

There being no further business, Director Crowell made a motion to adjourn the meeting;seconded by Director Tennant. The motion carried unanii

udy UnjierwoodSecretary/Treasurer Chairman

Documents

CALL TO ORDER MARIETTA, GEORGIA 30060 Electric ... Site...Cobb EMC hosted the Kennesaw Business Association Expo held on February 26, 2019 where 150 business owners visited our exhibition