Committed to Our Members Through Innovation, Service and Integrity

13
FINANCIALS BOARD ROUNDTABLE NARRATIVE GSOC’S HISTORY EXECUTIVE MESSAGE Committed to Our Members rough Innovation, Service and Integrity

Transcript of Committed to Our Members Through Innovation, Service and Integrity

Page 1: Committed to Our Members Through Innovation, Service and Integrity

FINA

NCIA

LSBO

ARD

ROU

ND

TABLE

NA

RRATIVEG

SOC

’S HISTO

RYEXECU

TIVE MESSA

GE

Committed to Our Members Through Innovation, Service and Integrity

Page 2: Committed to Our Members Through Innovation, Service and Integrity

FINA

NCIA

LSBO

ARD

ROU

ND

TABLE

NA

RRATIVEG

SOC

’S HISTO

RYEXECU

TIVE MESSA

GE

GEORGIA SYSTEM OPERATIONS CORPORATION 2

EXECUTIVE MESSAGE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

Georgia System Operations Corporation celebrated 15 years as a standalone company in 2012. Throughout the year, we reflected on where we started, what we’ve accomplished and where we’re headed — all in support of the Member Systems. With each task, project and ini-tiative, we have been Committed to Our Members Through Innovation, Service and Integrity — the theme of this year’s annual report. In addition to reporting on our achievements of 2012, this year’s report reviews our historic milestones and looks ahead at the coming years. GSOC has come far in 15 years. We’ve grown from a staff of about 40 to more than 250 employees today, as we expanded to meet the system’s demands and absorbed Shared Services into the organization. In 1997, our system peak was 5,252 MWh; in 2012, we set a new record of 9,217 MWh. Working closely with GTC, we’ve helped reduce SAIDI from 1997’s average interruption duration of 20.88 to 8.88 minutes last year. The energy man-agement system has been upgraded four times, with our latest version going live this past September. Our technology has evolved rapidly during the last 15 years.

Reviewing our history last year was interesting for me, as I began my career with GSOC just one month before it be-came a standalone corporation in March 1997. I’ve grown with the organization and watched our industry evolve signifi-cantly during those years. GSOC set several milestones in 2012. We completed the work associated with our Smart Grid grant, including an upgrade of the Energy Management System. We began a significant project with GTC to upgrade our telecommunications system, and we welcomed Flint Energies back among our Member Systems. GSOC also earned safety accreditation from the Georgia Electric Cooperative Safety Accreditation Program. One key element has led us to evolve into the organization GSOC is today: our employees. They are committed to innova-tion, focused on service to the Member Systems and the Family of Companies, and display integrity in everything they do.

Gregory S. FordPresident & CEO

Executive MessageA look back over the

last 15 years

Page 3: Committed to Our Members Through Innovation, Service and Integrity

EXECUTIVE M

ESSAG

EFIN

AN

CIALS

BOA

RDRO

UN

DTA

BLEN

ARRATIVE

GSO

C’S H

ISTORY

GEORGIA SYSTEM OPERATIONS CORPORATION 3

BUSINESS DESCRIPTION

Georgia System Operations Corporation is a not-for-profit system operations company. Our Members are 39 of Georgia’s distribution electric membership corporations, Oglethorpe Power Corporation and Georgia Transmission Corporation. GSOC is one of four com-panies, along with OPC, GTC and Smarr EMC, that this group of EMCs — the distribution Members — formed to provide and deliver wholesale electric services to them. GSOC was formed in 1997 when OPC spun off its transmis-sion and system operations business units to form GTC and GSOC, respectively, although GSOC, in effect, has been managing system operations since 1990. As the system operator, GSOC ensures reliable, safe, independent system operations by controlling and monitoring electric generation, transmission and distribution assets owned by OPC, GTC, Smarr EMC, the Members and their power supply partners. GSOC complies with all applicable North American Electric Reliability Corporation and SERC Reliability Corporation operating and reliability standards.

At GSOC, we:

• Enable our Members to participate in the energy market in Georgia and the Southeast by providing a range of operations services that allow our Members to transact, optimize and account for their busi-ness in the wholesale energy market.

• Coordinate and implement reliability requirements in order to assure the operational stability and performance of GTC and OPC grid interconnected assets.

• Implement system operations activities, including dispatch and monitor generation assets, purchase and sales contracts, schedule and monitor individual hourly transactions, capture the necessary data for billing and ensure customer confidentiality by following strict standards of conduct.

• Prevent or mitigate system outages by monitoring the substations from which our distribution Members serve their loads, respond-ing promptly and effectively to system anomalies, and proactively working to identify and correct potential issues.

• Provide the support services of OPC, GTC and GSOC by furnishing shared services functions that include accounts payable, audit, board administration, communication, facility services, human resources, information technology, payroll, records administration and training.

GSOC’S HISTORY> TIMELINE

How GSOC Began The groundwork to restructure OPC began in 1995. After years of discussion in the Georgia Legislature, the state’s natural gas industry was deregulated in 1997, with legislation allowing Atlanta Gas Light Company to store and distribute natural gas in its facilities and marketers to sell this natural gas to consumers. The idea of deregulation — in which a homeowner could choose a provider instead of using the single provider designated to that area — was to spark competition among companies, foster better service and lower the cost to the consumer. With this potential industry change in mind, the Members, Oglethorpe Power and the OPC Board began planning the organization’s future. On March 11, 1997, OPC became the first utility in the nation to completely unbundle its generation (now OPC), transmission (now GTC) and system opera-tions (now GSOC) functions into separate operating companies. This restructuring was designed to ensure the Family of Companies’ future success by aligning our distinct functions more closely with developing regulatory and industry trends. By doing this, the Family of Companies is able to provide more effective service to the Member Systems and help them achieve a more advantageous position in the increasingly deregulated marketplace. Fifteen years later, Georgia’s electric utility industry has not been deregulated, and it appears that won’t happen. But the three companies still provide high levels of service to our 39 Member Systems.

In Support of the MembersThe first Scheduling Member Group was established in 2000, and the first dynamic Scheduling Group was created two years later. The Control Center created a Scheduling Member Desk in 2001 to support the Members’ evolving relationships with their power market-ing agents. By 2002, each Member System was a member of a Scheduling Member Group, and the OPC Pool no longer was the backstop for system supply issues. GSOC was certified by NERC to operate as a control area in 2003. Because of this certification, we were able to negotiate a contract, the Control Area Compact, that eliminated many of the restrictions of the Revised and Restated Coordination Services Agreement, or RCSA, and preserved the Members’ interests. GSOC began operations under the Control Area Compact on March 1, 2005. The Compact, a contrac-tual arrangement among GSOC, Oglethorpe Power and Georgia Power, replaced the RCSA. Under the Compact, GSOC operates like a control area, with a bilateral reserve support arrangement with Georgia Power. GSOC now fulfills its contractual obligation to balance the load, adhering to many of the same guidelines as any control area, in concert with Georgia Power and Southern Company Services. In addition, GSOC and Georgia Power have a new process to jointly coordinate responses to loss-of-generation events. In late 2011, the Control Area Compact was extended through at least 2018. The Compact was scheduled to expire at the end of 2012, assuming that any party would have chosen to give notice of

CommitmentGSOC’s History: 15 Years of

Page 4: Committed to Our Members Through Innovation, Service and Integrity

EXECUTIVE M

ESSAG

EFIN

AN

CIALS

BOA

RDRO

UN

DTA

BLEN

ARRATIVE

GSO

C’S H

ISTORY

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 4

cancellation. By securing this agreement early, GSOC can continue to serve the Members and the system. Extension of the Compact addresses the concern of NERC reliability obligations. These obligations have become more complex, and we needed to be sure they were defined for GSOC, OPC, Georgia Power and the Member Systems in the event of noncompliance or a fine. The Control Area Compact has been a good contract for the Member Systems and has provided cost savings in operations since it was first implemented in 2005. The extension is expected to continue providing benefits, both tangible and intangible, and also continue building on our partnership with Georgia Power.

Running the SystemSystem Control Center Operations in 1988 assumed administra-tive and physical control of all Integrated Transmission System distribution substations owned by GTC, helping reduce the duration of outages. Since then, our partnership with GTC has reduced outage durations dramatically — from a SAIDI of 20.88 minutes in 1997 to 8.88 minutes in 2012. In the fall of 1999, in anticipation of Y2K, GSOC completed installation of the upgraded GE-Harris Energy Control System — the first of many energy management system upgrades. This upgrade ensured that GSOC System Operations personnel would

have the tools necessary to meet dispatch demands through contract or as a standalone control area. In fact, our most recent energy management system upgrade was completed this past September. GSOC placed significant emphasis on dispersed genera-tion in 2000 to help the Members operate as economically as possible. Dispersed generation involves using natural gas and diesel generators, which typically are placed throughout the distribution system, to help meet peak demand. During the summer of 1999, Member Systems used 40 to 50 diesel and gas generators to supplement their power needs. In 2000, those numbers jumped dramatically as 22 Member Systems used 251 generators at approximately 70 Member sites and eight OPC sites across the state, producing approximately 402 megawatts — a 500 percent increase from 1999. This dispersed generation became an important resource because it provided Member Systems with a source of power that, at certain times, was less expensive than electricity available on the open market. GSOC’s role was to dispatch these units when Member Systems needed the power at times of peak demand. GSOC’s efforts helped Member Systems meet their peak demand needs while reducing their power costs. Dispersed generation hasn’t been used since 2004, when power costs stabilized.

Telecommunications and GTC stepped into the future in 2002 with the development and implementation of the frame relay communication system. For the past decade, this system has provided a strategic advantage to the Member Systems and Family of Companies by enabling them to remotely com-municate with a wide variety of substation applications over a single integrated network that is secure, cost effective and reli-able. Although frame relay has served us well, technology has advanced rapidly since its implementation. We are exploring its replacement to enable us to continue to meet the rapidly expanding requirements for capacity, security and reliability. The Backup Control Center became operational during the summer of 2005. With the Backup Control Center in service, we can continue operations in the event of a disaster at or evacuation of the Tucker campus. Transmission Operations and Control Area Operations work from the Backup Control Center on a regular basis to ensure the center performs as designed or if system upgrades are being performed in the primary Control Centers. In addition, system operators earn emergency opera-tions, or e-ops, hours for operating from the Backup Control Center; those hours count toward our NERC certification requirements. The facility continues to perform well.

1997

March 11, 1997: GSOC officially becomes a standalone corporation.

1999: GSOC qualifies for SERC certification for control area operations.

1999: The first Scheduling Member Group is established.

2000: The Shared Services group is folded into GSOC.

GSOC’S HISTORY> TIMELINE

1998: System Control Center Operations assumes administrative and physical control of all ITS distribution substations owned by GTC.

2002: Telecom-munications and GTC implement the frame relay system.

2003: GSOC is certified by NERC to operate as a control center.

2003: Shared Services IT earns Enterprise Certified status from TruSecure.

2005: The Control Area Compact goes into effect on March 1.

2005: The Backup Control Center goes operational.

Page 5: Committed to Our Members Through Innovation, Service and Integrity

FINA

NCIA

LSEXECU

TIVE MESSA

GE

BOA

RDRO

UN

DTA

BLEN

ARRATIVE

GSO

C’S H

ISTORY

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 5

GSOC’S HISTORY> TIMELINE

Aug. 22, 2007, was a significant milestone for GSOC and the Member Systems: The system load surpassed 9,000 MWh for the first time, hitting 9,169 MWh in the 17th hour. That record held until June 2012, when we achieved a new record of 9,217 MWh.

A Smart Grant During the summer of 2009, many of our employees spent long hours in conference rooms across the Tucker campus putting together the GEMINI Project: our bid for one of the Department of Energy’s Smart Grid grants. We were awarded one of the grants, and with it spent the last three years upgrading our systems to keep in step with Smart Grid technology. In addition to supporting those Member Systems using smart meter technology, the system enhancements completed through this grant will help GSOC strengthen system reliability and better monitor interruptions and the status of the grid. This is a significant step for the Member Systems, the Family of Companies and the statewide grid.

Performing in a Regulatory EnvironmentA significant change in our industry began in the mid-2000s when regulatory compliance took center stage. GSOC began preparing for the new Bulk Electric System reliability regulations in 2007. Staff coordinated the review of the proposed laws and submitted comments to FERC, NERC and SERC related to the Energy Policy Act of 2005, the new procedures and mandatory reliability standards. These efforts paid off, as GSOC was instrumental in getting FERC to address regulatory matters that, when finalized, were accommodating to cooperative concerns. We passed our first NERC BES audit on reliability standards that protect the bulk power system in 2008, and we continue to remain compliant with BES standards. Our first Critical Infrastructure Protection audit was held in December 2011; we received the final results of that CIP audit during the fall of 2012, and we have completed our mitigation plans.

Supporting the Family of Companies When the companies reorganized in 1997, Intellisource was contracted to manage the shared services for the three newly formed companies, allowing GSOC, GTC and OPC to focus on their core businesses. On Nov. 4, 1999, OPC and Intellisource signed a letter of intent to dissolve the service agreement, with the transition scheduled for Dec. 31. As of Jan. 1, 2000, eight departments returned to the Family of Companies. Procurement Services became part of GTC and the rest — Accounting Services, Board Administration, Creative Services, Facility Services, Human Resources, Information Technology and Telecommunications — became GSOC departments under the new Shared Services group. GSOC was selected for Shared Services since it’s a services company.

20122007: The system load surpasses 9,000 MWh for the first time, hitting 9,169 MWh on Aug. 22. 2008: GSOC passes our first

NERC audit on BES reliability standards that protect the bulk power system.

2008: Security is enhanced at the campus entrance by adding card readers and guard stations; these enhancements comply with new NERC and FERC regulations.

2009: Shared Services IT and AP/Payroll meet SOX compliance for OPC.

2009: GSOC is awarded a Smart Grid grant from the Department of Energy.

2011: The Control Area Compact and the Member Services Agreements are extended through at least 2018.

SMART Choices for Our Members2010 AnnuAl RepoRt

G e o R G i A S y S t e M o p e R A t i o n S C o R p o R A t i o n

2010: The Building Two emergency power supply system is strengthened, increasing capacity and reliability. 2012: The upgrade to the

Energy Management System goes live, with a safe and uneventful cutover.

2012: GSOC earns accreditation through the Georgia Electric Cooperative Safety Accreditation Program.

Page 6: Committed to Our Members Through Innovation, Service and Integrity

GSO

C’S H

ISTORY

EXECUTIVE M

ESSAG

EFIN

AN

CIALS

BOA

RDRO

UN

DTA

BLEN

ARRATIVE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 6

It isn’t just a tagline at the bottom of an email. It’s how we approach every project we handle for the Member Systems, the Family of Companies and internally at GSOC.

INNOVATIONGSOC’s commitment to innovation has driven our growth throughout the last 15 years, allowing us to best serve the Member Systems and the Family of Companies.

The GEMINI ProjectIn 2012, we completed one of GSOC’s most significant and innovative initiatives: the GEMINI project — seven projects funded by the Department of Energy’s Smart Grid grant, which was awarded to GSOC in 2009. Three of the projects — Telecommunications upgrade, Scheduling Member upgrade and Fire Suppression — were completed in 2010 and 2011. The last four GEMINI projects — Real-time Production Cost, Outage Management Tool,

Transmission System Model and the Energy Management System upgrade — were completed during 2012. The upgrade to the Energy Management System had a safe and uneventful cutover on Monday, Sept. 10 — in just four hours. The EMS is a real-time computer system designed to manage power flow throughout the state by monitoring and controlling our Members’ generation and transmission assets. The system includes a new data historian, eDNA, as well as enhanced alarms and events criteria. The project began in January 2010, with the system being built at General Electric’s factory. The system then was shipped to GSOC’s headquarters in December 2011. The team devel-oped a detailed process and performed validation tasks for several months to set up the system and assure its accuracy. The successful cutover took place this past September, after the peak season ended. The two Control Centers also were upgraded in 2012 so they could best take advantage of the new EMS capabilities.

A new situational awareness mapboard, which is integrated with the EMS, was installed in the Transmission Control Center in the fall of 2012. The mapboard, shown in the bottom left photograph, mirrors the integrated power grid across Georgia, giving our system operators a more realistic view of the entire statewide grid at any time. The Smart Grid grant is a reimbursement grant and, as of December 2012, the Department of Energy has reimbursed GSOC $6.26 million, with just a small amount left to be reim-bursed. GSOC’s accounting group is working with the DOE on close-out billing and final reimbursement.

Telecommunications GSOC and GTC worked together throughout the year to develop and implement a plan to convert the frame relay com-munications network to a multi-protocol label switching, or MPLS, network. Due to changes in technology and the vendor no longer supporting the frame relay communication network,

Innovation, Service and IntegrityCommitted to Our Members Through

Page 7: Committed to Our Members Through Innovation, Service and Integrity

GSO

C’S H

ISTORY

EXECUTIVE M

ESSAG

EFIN

AN

CIALS

BOA

RDRO

UN

DTA

BLEN

ARRATIVE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 7

our telecommunications system must be replaced. The current frame relay communications network is used at approximately 900 locations, including substations, EMC headquarters, generation plants and other facilities throughout the state. The project team has completed pilot testing of the new MPLS network; ordered communications equipment for the substations; entered into one MPLS contract; and are negotiat-ing with other telecommunications carriers for additional MPLS service. They also executed a long-term lease for a fiber ring to directly interconnect our headquarters to key telecommunica-tions providers without the use of a local exchange carrier. This will improve the reliability of these connections and enable us to expand our communications capacity in future years at mini-mal additional cost. The project is going well, and we expect the first phase to be completed by the fall of 2014. In addition, GSOC and GTC are working with the Members to investigate opportunities to leverage existing fiber assets and partner with third parties to assist the Members in developing fiber networks. As a part of this effort, GTC and EMC represen-tatives, on behalf of GSOC and the Members, met with Gov. Nathan Deal to discuss collaboration regarding EMC fiber de-velopment and the state’s plan to bring broadband to schools. We also have been working closely with our Member Systems to keep them apprised of opportunities in this area, as well as regulatory issues that may impact our efforts. With so many communication system innovations in our immediate future, there will be a greater focus on telecom-munications across GSOC and the Member Systems. To support

this focus, Keith Porterfield was named vice president of Telecommunications in September.

Innovative TechnologyOver time, several websites have been developed by GSOC, GTC and OPC in support of our Members — each requiring a sepa-rate ID and password. This year, GSOC worked on developing a single Member Portal that will allow all users to access most of these websites with a single ID and password. This Member Portal is expected to go live in 2013. Innovation also set the pace for technology internally. SharePoint and InfoPath are among the innovative technologies improving how we work. Even GSOC’s performance evaluation process now is automated, as employees began using the online program for their performance reviews in 2012.

SERVICEServicing the state’s demands for electricity is one of GSOC’s core functions. The system set an all-time peak on Saturday, June 30 — 9,217 MWh — during a period of record-breaking temperatures across the state. This was only the second year the system demand has surpassed the 9,000 MWh mark, finally breaking the 9,169 MWh record set in 2007. The ITS peak (i.e., non-holiday, non-weekend peak) for GSOC occurred on June 29 and was 8,876 MWh. Despite record-breaking temperatures and peak demands, milder temperatures and lower demand framed the summer,

with energy usage through July down approximately 5 percent from 2011. Milder temperatures in Georgia equate to lower overall energy usage, but that midsummer spike demonstrates how quickly the demand can increase. Our resource portfolio met the Members’ demands, both reliably and economically, throughout the entire summer period. Training is a key component in our service to the Members and reliable management of the system. We completed our System Operations Training Facility in 2012. This facility is a necessary tool for maintaining FERC and NERC operator certification, and it will allow system operators and staff to ensure continued compliance. We’ve already used this facility to conduct system operator training.

Small Generator ProjectsWith continuing national emphasis, statewide interest is growing in renewable energies such as solar and landfill gas. During the year, the number of small generator projects in planning or under construction increased significantly. In addition to the normal design and construction requirements, each of these projects requires special consideration with respect to energy accounting. Location, ownership and customer base all come into play when determining how to account for and bill for the energy that these units produce. During the year, as the pace has quickened, we worked closely with GTC on analyses of several small generator projects in various Members’ territories to serve Green Power EMC Members, specific Members or third-party purchasers. We expect that this will be an area of continuing growth.

2012 Operations 2012 2011

GSOC Gross Integrated Peak 9,217* MWh 8,863 MWhSwitching Orders Executed 4,012 3,920Total Prearrange Requests Processed 3,448 2,909CPS2 Compliance (annualized) 94% 94%

GTC Substation Construction New Distribution Substations 8 5New Transmission Substations 0 0New EMC Metering Points 3 2Retired Sites 1 3Station Capacity Increase/Voltage Conversion 28** 20

*GSOC all-time peak was set on Saturday, June 30, 2012 **36 additional sites had relay upgrades only.

Page 8: Committed to Our Members Through Innovation, Service and Integrity

GSO

C’S H

ISTORY

EXECUTIVE M

ESSAG

EFIN

AN

CIALS

BOA

RDRO

UN

DTA

BLEN

ARRATIVE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 8

Plant Operations SupportThe transition of operation of the Murray Energy Facility gener-ating units from Duke Energy to OPC was completed during the spring of 2012. This transition required coordination and effort from every business unit at GSOC. The plant was renamed the Thomas A. Smith Energy Facility, in honor of OPC’s long-time president and CEO. We implemented the Oglethorpe Data System, or ODS, at Plant Hartwell, and enabled automated deal tickets and mobile devices for OPC’s Fuels Management Department.

INTEGRITYEvery day, for every task and initiative, GSOC employees serve with integrity. Our Ethics & Compliance program is just one example of how we show our commitment to maintaining a workplace that fosters a culture of fairness and trustworthi-ness. This program educates employees on complying with all applicable laws, regulations and policies, and ensures that we conduct business in an honest and highly ethical manner. We take seriously our personal integrity in support of the Members, OPC, GTC and GSOC. GSOC also protects and strengthens the integrity of the system, the campus and our community through numerous initiatives.

GSOC earned accreditation through the Georgia Electric Cooperative Safety Accreditation Program. Representatives conducted an inspection of GSOC’s work areas on Aug. 16, and we passed with a score of 95 out of 100 possible points. Our employees worked for a year to develop and implement our formal safety program. Now, as a member of the Electric Cooperative Safety Administration program, we are subject to unannounced annual safety inspections, which require that we maintain the high safety standards and awareness we have already set. To ensure the integrity and security of the Tucker campus — including the Control Centers, the Energy Management System and other crucial system operations systems — numerous enhancements were completed in 2012. One significant project was the installation of an eight-foot-tall perimeter fence around the southern portion of the campus, deterring campus access except via the guard house at the entrance. Fencing for the northern perimeter will be installed this coming spring. Another security measure implemented in 2012 was a new visitor’s management system. The first phase is complete, enhancing accountability for our maintenance vendors and delivery personnel to ensure they are approved to be on campus. The second phase, involving all other Family of Companies campus visitors, is scheduled to begin in 2013.

Bulk Electric System and Critical Infrastructure Protection compliance continue to be a major focus across the organiza-tion. There were no NERC audits scheduled for 2012, but there were many efforts during the year. Staff performed a variety of follow-up activities related to December 2011’s CIP audit to address NERC violations, including developing mitigation plans. We also performed internal compliance assessments in prepara-tion for the SERC BES and CIP self-certifications. In support of Oglethorpe Power’s Sarbanes-Oxley compli-ance effort, GSOC IT had zero deficiencies in the SOX audit — for the third straight year — as did Accounts Payable and Payroll. Our blood drives continue to support the metropolitan Atlanta chapter of the American Red Cross. We surpassed our LifeBoard goal of 348 units for the 2011–12 donation year. Employees, contractors and tenants rolled up their sleeves to donate 366 units during our seven blood drives. Our goal for 2012–13 has been increased to 378 total donated units, or 63 per drive. GSOC President & CEO Greg Ford continues to serve as LifeBoard chairman for the Atlanta chapter. He also is on the Southern Region American Red Cross Blood Services Board.

2009

36,096,762 mwh8,337 mwh

Load Growth (MWh) Annual System Peak and Energy (MWh)

10,000

8,000

6,000

4,000

2,000

0

MW

h

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

012/2006 12/2009 12/2012 2007 2008 2009 2010 2011 2012

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2010 Total System @ B-1: 39,368,717 mwh2010 System Peak @ B-1: 8,846 mwh

2012 Total System @ B-1: 35,783,733 mwh2012 System Peak @ B-1: 9,217 mwh

Months Dec. - LoadSystem Peak

plotted in Excel - Load

12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12

0

2

4

6

8

10

37,003,114

36,860,155

39,368,717

35,783,733

36,096,762

2011 Total System @ B-1: 37,241,009 mwh2011 System Peak @ B-1: 8,863 mwh

30.00000

33.33333

36.66666

39.99999

37,241,009

(Right): This bar graph reflects the annual system peak growth during the past six years, while the accompanying line repre-sents the annual system energy demand growth during the same period.

(Left): This chart illustrates how the system load has grown during the past 72 months. Each data point represents the average monthly consumption for the previous 24 months. The system load included 39 EMCs through December 2004 and 38 EMCs beginning in January 2005.

Page 9: Committed to Our Members Through Innovation, Service and Integrity

NA

RRATIVEG

SOC

’S HISTO

RYEXECU

TIVE MESSA

GE

FINA

NCIA

LSBO

ARD

ROU

ND

TABLE

GEORGIA SYSTEM OPERATIONS CORPORATION 9

EXECUTIVE ROUNDTABLE:

COMMITMENT FOR THE FUTURE

GREG FORD: GSOC has evolved significantly over the last 15 years, guided by our busi-ness units staying focused on the future of our industry. We’re always looking ahead — one year, three years, five years — with our strategic initiatives so we can stay in step with the electric utility industry.

CLAY SMITH: One of our major initiatives involves staying on top of compliance — the issue that perhaps has had the biggest impact to our business since our beginning. It’s the new world we live in at GSOC and across our industry. There are more internal controls to monitor and documentation to maintain on a more regular basis, and we may need to explore new technologies to keep up with the compliance demands.

GREG FORD: How do we keep up with those demands?

CLAY SMITH: Our objectives are to implement comprehensive System Operations Bulk Electric System and Critical Infrastructure Protection compliance programs, and to maintain compliance with reliability standards. How do we do that? We have numerous activities in progress. Our ongoing activities include educating employees about the impacts of their actions, as well as conducting audits to ensure processes are followed as intended.

GREG FORD: Compliance requirements definitely affect how we’re planning for our future — but they aren’t the only thing.

RALEIGH NOBLES: Certainly not. Meeting Members’ needs and staying apprised of the industry’s best practices are just as important. In everything we do, we keep in mind how to best work with limited resources and work cost effectively.

GREG FORD AND HIS EXECUTIVE TEAM RECENTLY SAT DOWN TO DISCUSS GSOC’S FUTURE AND WHERE OUR FOCUS WILL LIE.

Pictured from left:

Raleigh Nobles, Senior Vice President, System Operations

Tina James, Vice President, Shared Services Administration

Clay Smith, Executive Vice President & Chief Legal & Compliance Officer

EXECUTIVE ROUNDTABLE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

Page 10: Committed to Our Members Through Innovation, Service and Integrity

NA

RRATIVEG

SOC

’S HISTO

RYEXECU

TIVE MESSA

GE

FINA

NCIA

LSBO

ARD

ROU

ND

TABLE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 10

GREG FORD: We also must look ahead and plan from a technology standpoint.

RALEIGH NOBLES: Though we just completed a major upgrade to our Energy Management System, we already have upgrade plans in place to keep the EMS in step with the indus-try and our Members’ demands. Due to the complexity of the Georgia Integrated Transmission System and the ever-evolving requirements of FERC, NERC and SERC, we’ve determined that we must start addressing the next EMS upgrade now in order to be ready for the next upgrade to begin in 2017. This initiative is designed to prepare us to be in the best possible position to negotiate with vendors and choose the best-suited EMS for the next generation, understanding that this tool is absolutely necessary for GSOC to provide the core services to Members and the Family of Companies.

GREG FORD: As we implement more and more advanced technologies for decision support and operations, advantages

can be gained by integrating the various data streams from these systems.

RALEIGH NOBLES: Exactly. We intend to integrate several discrete technologies and applications — including enhanc-ing alarms, modeling the Georgia transmission system and implementing a new data historian — with the idea being that the sum of the parts is greater than the parts. The result of this increased awareness can be used for the economic and value-added advantage of Members and the Family of Companies.

JOHN SWEENEY: That’s at the core of everything we do at GSOC. Requests from our Members are always a top priority. For example, the Members want post-operational data to support their operations as quickly as they can get it, and we’re always working to make it easier for them to get the data they need. The capabilities of the new Energy Management System will help us provide more accurate and timely information.

RALEIGH NOBLES: We’re also working to support the Members in their power supply arrangements.

JOHN SWEENEY: How we support the Members near- or midterm arrangements with their power suppliers is going to be interesting. How can we support the Members in case they want to make changes? In 2016, many Members will have options with their power supply arrangements, so we’re looking at what’s available to them.

GREG FORD: These are going to be important issues that we have to stay on top of in the coming years. Equally important is how we’re preparing for the future within GSOC.

GARY WILLIAMSON: One of the things we’ve done internally is increase security in the information technology arena, which is due in part to increasingly stringent regulatory requirements. We will continue to become more efficient by taking full advan-tage of our knowledge and the available tools.

EXECUTIVE ROUNDTABLE

Pictured from left:

John Sweeney, Senior Vice President, Data Systems, Settlements & Finance

Gary Williamson, Vice President & Chief Information Officer

… better serve the Members by giving them the information they need while ensuring the system’s reliability.

Page 11: Committed to Our Members Through Innovation, Service and Integrity

NA

RRATIVEG

SOC

’S HISTO

RYEXECU

TIVE MESSA

GE

FINA

NCIA

LSBO

ARD

ROU

ND

TABLE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 11

TINA JAMES: We’ll also work toward ensuring that GSOC is a pre-mier employer, and we’ll stay focused on our workforce strategy as our employee population changes. As this group knows, we’re always looking at our future as an employer. We conducted a climate survey across the organization at the end of 2012 so we can understand what we’re doing well and where our opportuni-ties for improvement lie. We’ve received the survey results and saw that there have been improvements in most every category. But we don’t take that for granted.

GARY WILLIAMSON: Trends in information technology affect both our workforce and how we support our Members. There’s a significant move toward using a variety of new devices, such as tablets and smartphones, which will enable us to be avail-able from anywhere and at all times. That, of course, expands the workday and the workweek. These days, you can do just about anything using the Internet, and we plan to capitalize on that.

TINA JAMES: With that in mind, we’re continuing to take advan-tage of the available technology and maximize what’s in place for productivity. These automated processes increase productivity and accuracy, so we’ll continue integrating them into how we work at GSOC.

GARY WILLIAMSON: Even our login processes will become more automated. Over the next two to three years, we’ll move from IDs and passwords to authenticated devices. Security will identify the user on the device, which will be an easier way for security to work and make it easier to work.

TINA JAMES: And we’re all working to meet regulatory require-ments. We’re continually working to strengthen the security of the campus and all our physical assets.

GREG FORD: Right. Whatever work we’re doing — whether it benefits the Members directly or indirectly — we always try to listen and respond. By staying committed to our Members through innovation, service and integrity, we’ll be prepared for what’s in store for our industry.

EXECUTIVE ROUNDTABLE

Revised 0213-2013

39

MEMBER SYSTEMSClick on the map below for a complete list of the Member Systems, Member Representatives and Member System Managers.

By staying committed to our Members through innovation, service and integrity, we’ll be prepared for what’s in store for our industry.

Page 12: Committed to Our Members Through Innovation, Service and Integrity

ROU

ND

TABLE

NA

RRATIVEG

SOC

’S HISTO

RYEXECU

TIVE MESSA

GE

FINA

NCIA

LSBO

ARD

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 12

BOARD OF DIRECTORSThe GSOC Board of Directors (first row, from left): Hugh Rucker, Chairman; Neal Shepard, Vice Chairman; (second row): Randall Pugh, Secretary-Treasurer; Randy Crenshaw; James Goodrich; Simmie King; Wayne Livingston; (third row): George Loehr; Royce Lyles; Mike McCoy; Ted McMillan; (fourth row): Anthony Norton; Harry Park; Julian Rigby; Neal Trice

Page 13: Committed to Our Members Through Innovation, Service and Integrity

NA

RRATIVEG

SOC

’S HISTO

RYEXECU

TIVE MESSA

GE

FINA

NCIA

LSBO

ARD

ROU

ND

TABLE

COMMITTED TO OUR MEMBERS THROUGH INNOVATION, SERVICE AND INTEGRITY

GEORGIA SYSTEM OPERATIONS CORPORATION 13

MEMBER SYSTEMS

Revised 0213-2013

39

1. Altamaha EMC Robert E. Youmans Romanous Dotson 2. Amicalola EMC John H. Bennett Jr. Charles L. Gibson 3. Canoochee EMC Lavanda Lynn Douglas F. James 4. Carroll EMC Alvin W. Ginn Ernest A. Jakins III 5. Central Georgia EMC D.A. Robinson III George L. Weaver 6. Coastal EMC Stephen Mullice F. Whit Hollowell d/b/a Coastal Electric Cooperative 7. Cobb EMC Rudy Underwood W.T. Nelson 8. Colquitt EMC Bobby R. Griner Danny Nichols 9. Coweta-Fayette EMC Mildred A. Winkles Anthony H. Sinclair 10. Diverse Power Harrell L. Landreth Wayne Livingston 11. Excelsior EMC Vacant Gary Drake 12. Flint EMC David H. Cleveland Robert F. Ray Jr. d/b/a Flint Energies

13. Grady EMC Donald C. Cooper Thomas A. Rosser 14. GreyStone Power John A. Walton Gary A. Miller 15. Habersham EMC Dan Thurmond Todd Pealock 16. Hart EMC Guerry Hall Jeffrey W. Murphy 17. Irwin EMC Ed Moore Randy Crenshaw 18. Jackson EMC Bill Carpenter Randall Pugh 19. Jefferson Energy Cooperative Joe Shurley Kenneth Cook 20. Little Ocmulgee EMC Jim Knight Lewis Sheffield 21. Middle Georgia EMC Ronnie Fleeman Randy Crenshaw 22. Mitchell EMC W. Lucius Adkins Jr. Tony F. Tucker 23. Ocmulgee EMC Barry H. Martin W.H. Peacock 24. Oconee EMC Charles B. Grace Marty Smith 25. Okefenoke REMC Jimmy Woodard John Middleton 26. Pataula EMC * David Johnson Jarrell J. Hulsey III 27. Planters EMC Horace H. Weathersby III Edward M. Brinson Jr. 28. Rayle EMC J.M. Sherrer Tony Griffin 29. Satilla REMC Robert L. Lewis Jr. Romeo A. Reyes 30. Sawnee EMC Rodney H. Reese Michael A. Goodroe 31. Slash Pine EMC Lowell Herring J. Timothy Register 32. Snapping Shoals EMC Gene Morris Brad Thomas 33. Southern Rivers Energy W.H. Averett Jr. Charles J. Lowery (interim) 34. Sumter EMC Bob Jernigan J. Ted McMillan 35. Three Notch EMC Steve Holt Carlton O. Thomas 36. Tri-County EMC Thomas Noles C. Hill Bentley 37. Upson EMC Raphael A. Brumbeloe Neal Trice 38. Walton EMC Warren Few D. Ronnie Lee 39. Washington EMC Mike McCoy Wendy Sellers

* As of Dec. 31, 2012, Pataula EMC was one of GSOC’s 39 Member Systems. Effective March 2013, Pataula EMC became part of Cobb EMC.

Member Member System Member System Representative Manager