Looking out for you

2010 Annual Report

Lewis Harrison
CHAIRMAN OF THE BOARD

We are
J. David Wasson, Jr.
PRESIDENT AND CEO

looking out for you ...

Laurens Electric Cooperative is owned by the people we serve. Our number one priorit y is providing you, our members, with reliable, safe, and affordable energy. Were working together to make this happen, using innovation and dedication to ensure we continue to put our members first.

through

One of the first steps to ensuring reliability is prevention, such as the co-ops right of way management program. Co-op personnel constantly clean, clear, and trim brush and debris away from power lines and crews inspect the substations and thousands of miles of lines to identify areas in need of maintenance. Technology and system design are another major aspect of reliability. In 2010, Laurens Electric continued targeting highly populated portions of its service area, integrating advanced software and system upgrades while coordinating a new approach to outage management. As a direct result of these measures, outage frequency and duration in these areas was reduced an average of 40%.

reliability...

LEC employees like Stanley Thompson and Mike Tucker constantly inspect and repair equipment to ensure maximum system reliability.

with excellent

One of the tools co-op leaders employ to ensure the best service for its members is the American Customer Satisfaction Index (ACSI), which measures customer loyalty, experience, and expectations on a local and national level. For the eighth year since it began participating in the study, Laurens Electric Cooperatives results remained high, with a score of 83 in 2010, versus the industry average of 72.

service...

LEC employees like Edwenia Nelson, Kay Abercrombie and Aretha Sayles participate in routine training and meetings to analyze and discuss best practices, areas in need of improvement, and to keep employees up to speed on the latest advancements.

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We are committed to doing everything possible to keep your electric bills affordable. In 2010 we continued helping members manage energy use and control costs with our energy efficiency programs. The co-ops web site, www.LaurensElectric.com offers an extensive Energy Library with energy saving information for homeowners, commercial and industrial members, and a Kids Korner. Members may also request copies of our Energy Tips brochure and 101 Low Cost/No Cost Home Energy Saving Measures booklet.

by keeping energy affordable through

efficiency...

Whats more, as a Touchstone Energy Cooperative, our members have access to the extensive and interactive web site, TogetherWeSave.com. Visitors to the site will find a Virtual Home Tour, interactive activities that use local information for energy-saving calculations, and step-by-step video guides for a variety of energy-efficiency makeover projects.

Also in 2010, the co-op introduced a new energy efficiency rate schedule, called Residential Service Energy Star Schedule. Attainable by new or existing homes, the requirements to qualify for the energy efficiency rate are set by Energy Star at energystar.gov. Members must get a HERS (Home Energy Efficiency Rating System) certified contractor to certify that the home meets Energy Star requirements (a HERS rating of 85 or less) to qualify for this rate.

Laurens Electric Cooperative offers energy saving brochures and booklets in addition to extensive online resources to help you use energy wisely.

TogetherWeSave.com features a Virtual Home Tour, interactive activities and step-by-step video guides for a variety of energy-efficiency makeover projects.

by saving you money through

Co-op Connections ...

In 2009 we began the Co-op Connections Member Benefit Program, designed to help members save money in this time of rising costs and economic uncertainty. The number of participants giving discount offers continues to grow, along with the number of co-op members taking advantage of the discounts. 2010 data tells us that South Carolina is Number 1 in the country in total member savings using the pharmacy part of the card discount. Last year Laurens Electric Cooperative members saved over $154,000 on prescriptionsan average of 35% per prescription. To find out more about savings opportunities near you, visit www.connections.coop.

The Co-op Connections Member Benefit Program is designed to help members save money through a network of participants offering discounts to card holders.

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Since 2000, Laurens Electric has offered to its customers Green Power, electricity generated from a renewable resource, in this case a landfill that converts methane gas into electric power.

with programs to help the

environment...

In the 10 years since its establishment, residential members of Laurens Electric Cooperative purchase more Green Power than any other electric co-op in the state. All revenue from the Green Power program is reinvested in future development of renewable resources or facilities. Throughout the year Laurens Electric Cooperative organizes programs and charitable events such as the annual Million Dollar Hole in One Shootout, which raises funds for the communitys children, and the annual Poker Run that helps support Cooperative Caring.

through

community events...

In addition, the co-op sponsors two local high school students each year to attend Washington Youth Tour, holds special raffles to contribute to The American Cancer Societys Relay for Life, and reaches out to the community through its womens charitable group, WIRE (Women Involved in Rural Electrification). In 2010 alone, Laurens Electric raised over $50,000 for different charities through our community events.
The 2010 $1 Million Hole In One Shootout earned $10,000 for the Beach Ball Foundation, non-profit organization dedicated to helping children in need and at risk.

Looking out for you ...

2010 Board of Trustees

Joe Nicholson
DISTRICT 1

Bill Hendrix
DISTRICT 2

Lewis Harrison
DISTRICT 3

Charles Adair
DISTRICT 4

Leroy Blakely
DISTRICT 5

Helen Abrams
DISTRICT 6

Marcus Cook
DISTRICT 7

F. E. Hendrix
DISTRICT 8

Mitchell Powers
DISTRICT 9

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BALANCE SHEET
Assets
2010
2009 $ 194,948,380 5,014,687 199,963,067 56,260,040 143,703,027 0 12,450,853 156,153,880 16,231,356 6,406,167 165,000 880,280 206,280 23,889,083 0 $ 180,042,963
Cost of Power

2010 Financial Review

UTILITY PROPERTY, PLANT & EQUIPMENT Total Utility Plant in Service . . . . . . . . . . . . . . . . . . . . . . . . . $ 202,838,656 3,066,131 Construction Work in Progress . . . . . . . . . . . . . . . . . . . . . . . 205,904,787 Total Utility Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,325,808 Less: Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . 146,578,979 Net Utility Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Non Utility Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments in Associated Organizations and 10,729,225 Other Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,308,204 Total Property, Plant & Equipment . . . . . . . . . . . . . . . . . CURRENT ASSETS Cash & Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Materials and Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments and Other Current Assets . . . . . . . . . . . . . . . Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,057,878 7,357,459 93,000 952,802 164,920 33,626,059 0

2010
Operating Expenses

14%

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 190,934,263

Depreciation Expense

Liabilities & Equities

EQUITY Memberships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Patronage Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT LIABILITIES Accounts & Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . Member Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated Operating Provisions . . . . . . . . . . . . . . . . . . . Other Current and Accrued Liabilities . . . . . . . . . . . . . . . . . Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286,765 41,632,421 (1,507,144) 40,412,042 10,531,208 2,441,307 8,048,227 4,859,965 25,880,707 124,641,514 0 $ $ 285,285 37,098,142 (4,462,091) 32,921,336 10,076,178 2,437,820 9,709,834 4,543,704 26,767,536 115,997,763 4,356,328 180,042,963

4%

65%

Interest Expense

5%
NonOperating Tax Expense Margins Other Deductions

4%

5%

3%

0%

TOTAL EQUITIES AND LIABILITIES . . . . . . . . . . . . . . . . . . . . . $ 190,934,263

2009
Operating Expenses

STATEMENT OF OPERATIONS AND PATRONAGE CAPITAL

2010
ELECTRIC REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 114,654,913 OPERATING EXPENSE Cost of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distribution Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Customer Account & Service Expense . . . . . . . . . . . . . . . . . Sales Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administrative and General Expense . . . . . . . . . . . . . . . . . . Depreciation Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . Operating Margins Before Interest and Capital Credits . . . INTEREST ON LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . Operating Margins Before Capital Credits . . . . . . . . . . . . . NON OPERATING MARGINS Capital Credits from Related Organizations and Other Non Operating Margins . . . . . . . . . . . . . . . . . . . . . . . Revenues Related to Disposition of Saluda River . . . . . . . Total Non Operating Margins . . . . . . . . . . . . . . . . . . . . . . . . NET MARGINS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Margins & Equities, Beginning of Year . . . . . . . . . . . . . . . . . . . $ Retirement of Capital Credits . . . . . . . . . . . . . . . . . . . . . . . . . . Margins & Equities, End of Year . . . . . . . . . . . . . . . . . . . . . . . . $ 81,547,641 6,504,455 4,430,973 559,877 5,662,283 5,311,352 4,115,384 105,798 108,237,763 6,417,150 5,735,633 681,517 $ 2009 103,043,645
Cost of Power

15%
Depreciation Expense

5%

70,108,822 5,697,866 4,343,236 520,651 5,493,224 5,215,145 4,036,471 160,495 95,575,910 7,467,735 5,600,389 1,867,346

64%

Interest Expense

5%
NonOperating Tax Expense Margins

3% 0%

4%
Other Deductions

4%

1,016,343 4,382,789 5,399,132 6,080,649 32,921,336 500,000 40,412,042

$ $ $

975,538 2,191,395 3,166,933 5,034,279 28,004,294 326,990 32,921,336

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