POWERSOUTH CONDUCTS 2009 ANNUAL MEETING

“We attempt to anticipate events and trends – from generation technology to environmental constraints to the effects of the economy – to position us for the future,” said Jimmy Ramage, Mayor of the City of Brundidge, Ala., and outgoing Chairman of PowerSouth’s Board of Trustees. “Our planning has allowed us to be proactive instead of reactive to the changes in our economy, community and industry.”

Some of PowerSouth’s highlights over the past year included:

• Adaptation of a long-range power supply plan to meet the PowerSouth service territory’s energy demand for the foreseeable future. The power supply plan includes a generation portfolio that is more diverse than ever, ready to address the steady rise in energy sales that is expected through 2027.
• Accomplishing an all-time system peak of 2,382 megawatts on the PowerSouth system. The peak, reached at 7 a.m. Jan. 11, 2010, exceeded the previous record by 176 megawatts and well surpassed projected winter demand of 2,098 megawatts.
• In 2009 the Rural Utilities Service (RUS) approved PowerSouth’s $144 million transmission and construction work plan, paving the way for bulk transmission system additions, new delivery points and major maintenance projects through 2011.
• PowerSouth’s transmission reliability metrics continued to be as good as or better than any utility in the Southeast.
• PowerSouth’s business development efforts helped recruit new industry and assisted existing industry with expansion, which provided growth opportunities for the communities we serve. Approximately 4,000 jobs were created in our service area in 2009, representing more than $300 million in new capital investments.
• Construction of McIntosh Units 4 and 5 began in 2009 and is currently more than 86 percent complete. Construction has remained on schedule, and the units should be commercial by December 2010, providing an additional 360 megawatts to the plant’s existing 350 megawatt capacity.

Last year ended as one of the most successful in PowerSouth’s history. The success is attributed to the board’s attempt to anticipate events and trends – from generation technology to environmental constraints to the effects of the economy – to position PowerSouth for the future.

“If you look back at where we were in summer 2008, you’ll see that we had to step up and make quick decisions,” said Board Secretary-Treasurer Gary Harrison, General Manager at Dixie EC. “In 2009 we saw the positive results of those hard decisions made by the board and staff.

“During the summer of 2009, we were hit by one of things we all feared when we lost operation of a coal unit for an unplanned outage. But it turned out to be a blessing because during that time natural gas prices were dropping quickly, and we were able to take advantage of that fuel savings,” Harrison said.

Production for 2009 rose to 74.2 percent compared to only 57 percent the year before. As a result, costs to purchase power decreased. The Cooperative was running its plants more, resulting in an increase of production and maintenance costs.

PowerSouth’s operating revenues in 2009 were enough to satisfy all debt obligations, financial covenants and its indenture. Due to construction at PowerSouth’s McIntosh Plant, the utility plant increased by 5 percent, and equities improved by 15 percent. However, liabilities increased $21 million due to construction costs.

“PowerSouth concluded 2009 with a fine financial condition,” Harrison said. “We were well prepared going into 2010. The PowerSouth staff kept our eye on the ball and kept us focused. History is going to look back on this year, and it is going to be seen as very much a turning point in this organization.”

Several retirees, trustees and a widow of a retiree were honored in a memorial during the annual meeting, including John L. Shreve, Gerald Fowler, Mary Hall, Jimmy Utsey and Jack Clark.

Gary Smith, PowerSouth President and CEO, honored Ramage for his service as Chairman of the Board. Ronald Jones of CHELCO was named the new Board Chairman. Harrison was named Vice Chairman, and William (Bill) Rimes of West Florida EC was named PowerSouth’s new Board Secretary-Treasurer.

In addition, Smith honored former trustees for their service to the PowerSouth board.

Roy Barnes, former General Manager of Gulf Coast EC, was honored for his service from 1995 to 2010, during which he served on the Engineering and Operations, Finance and Audit, Marketing and Economic Development, Corporate Planning and Power Supply, Nominating and Executive committees. He also served as a voting delegate for the Florida Electric Cooperative Association.

J.E. (Gene) Smith, former CEO and General Manager of CHELCO, was recognized for his service from 1979 to 2009, during which he served on the Engineering and Operations, Corporate Planning and Power Supply, Nominating, Marketing and Economic Development, Member Relations and Strategic Planning and Executive Committees. During his tenure, he also served as PowerSouth board chairman.

Kinneth Daniels, Gulf Coast EC board member, was honored for his service from 2006 to 2009, during which he served on the Engineering & Operations Committee.

Nolan Laird, Wiregrass EC board member, was recognized for his service from 2007 to 2009, during which he served on the Member Relations and Strategic Planning Committee.

David Cook, Southern Pine EC board member, was honored for his service from 2006 to 2009, during which he served on the Marketing and Economic Development and Engineering and Operations Committees.

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About PowerSouth:

PowerSouth serves the wholesale energy needs of 16 electric cooperatives and four municipal electric systems in Alabama and northwest Florida, with more than a million consumers in 39 Alabama and 10 Florida counties. PowerSouth is dedicated to providing reliable energy at the lowest possible cost to its members.

For more information:

Mark Ingram, Corporate Communication Manager

334.427.3330

mark.ingram@powersouth.com

www.powersouth.com

PowerSouth is an EEO and AAP employer

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