2012 Annual Meeting

MMiissssiioonn SSttaatteemmeenntt

Our mission is to serve our members and community by safely providing reliable and environmentally responsible power and other services, efficiently and at a competitive price to benefit members and improve the quality of life in the areas that we serve.

As your electric cooperative, it’s important for Southern Iowa Electric Cooperative to provide its member-owners with safe, reliable power. Yet our service goes beyond the wires. It’s also important that we offer additional value that has an enormously positive impact on everyone in the community.

Last year, SIEC rolled out our Co-op Connections Card. This little card can save you money on prescriptions and offers discounts at local participating businesses as well as national businesses. Our Healthy Savings Discount Program saves you money on eye care, dental care, chiropractic, and hearing aids at participating local and national providers. Lastly, our VIP Savings program offers “cash back” dollars on all your qualifying purchases made through MyVIPSavings.com. For questions or more information on any of these programs please contact Lori McAllister, SIEC Public Relations Coordinator. She is here to help you, oouurr mmeemmbbeerr!

Executive Report …………………....Page 2 Meet Your Board of Director Nominees ……………………Page 4 Financials …………..….…….Page 6 2011 Annual Meeting Minutes ...…………………Page 9 Notice of 2012 Annual Meeting ……………….….Page 10 2012 Iowa Rural Electric Youth Tour …………………..Page 11 2012 SIEC Academic Scholarship Winners …………………..Page 12 Annual Meeting Agenda ..……...Inside Back Cover A Look at Geothermal ………..……..Back Cover

Southern Iowa Electric Cooperative is a distribution electric cooperative serving approximately 4700 meters in southern Iowa. The Cooperative is owned and controlled by the people who we serve. As a not for profit organization, a nine-member board of directors elected from our membership governs us. Each member has a say in the way the cooperative is run and who runs it. Our employees are dedicated to knowing and serving our members and developing new ways to meet their needs.

2011 Cooperative Highlights Operating Revenue……………………….$12,457,824 Net Margins………………………………..$1,484,564 Total Assets………………………………$40,850,869 Patronage Dividends Distributed……………$355,900 Miles Energized Line…………………………....1,665 New Services……………………………………….52 Active Membership……………………………...3,816 Number of Employees…………………………….. 24 Counties Served……..Appanoose, Davis, Van Buren and Wapello

Cover Photo: SIEC crews completing a pole change out _____________________________________________________________________________________________________________

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2012 Annual Meeting-1-

Executive Summary Report By Darrel Downing, President & Mark Aeilts, CEO/Manager

We are extremely privileged to serve as YOUR Board President and CEO. The electricity business is a complicated network of generation, transmission and distribution. Distribution is the delivery of electricity to homes and businesses. Substations take power from transmission-level voltages and distribute it to thousands of miles of lower voltage distribution lines. The distribution system is generally considered to begin at the substation and end at the member-owner's meter. Southern Iowa Electric Cooperative (SIEC) was formed in 1939 as a not-for-profit cooperative responsible for building and maintaining the wires, poles, and transformers.

The SIEC Board and Employee partnership is impressive. The member elected Board provides the tools and other resources to the skillful employee team members who provide service to our members. The next time power outages occur due to sub zero freezing or lightning conditions remember the ongoing planning by YOUR Cooperative team who are diligently working to restore power ASAP.

The SIEC Board has adopted the

Touchstone Energy values of integrity, innovation, accountability and commitment to community. In February 2011, the Board proactively established a long range strategic plan to improve reliability and maintain financial strength of the Co-op.

Please remember our motto, “You Have a

Voice with Us”. We value your input, so please let us know your thoughts on these or any other issues of how we might better serve YOU. ENERGY EFFICIENCY & RATES

We offer low cost energy audits, education and heating/cooling rebates. Our rates remain competitive with neighboring utilities despite our lower density of 2.8 meters per mile of line. The upward pressures on electric rates continue to mount for the foreseeable future. The worst case would be industry altering events such as a major earthquake at New Madrid, MO or solar flares harming transformers throughout the electric grid

with long lead times to replace them. Upward price pressures include cost for new power plants, rail delivery of coal, requirements to quickly install scrubbers and the first ever regulation of carbon dioxide. Also, in 2011 we spent $109,000 on property taxes in Appanoose, Davis, Van Buren and Wapello counties (based on our pole/wire assets).

Generation and transmission costs are rising

much faster than local distribution costs. Using our depreciated plants, is the most cost effective source of power for our member-owners. Your co-op family includes 875,000 members throughout Iowa, Missouri and Oklahoma. Many members are doing their part to maximize the effectiveness of their electricity use. In doing so, they are helping SIEC members by avoiding more costly new power plant construction that we would have to pay for even though our loads aren’t growing in Southeast Iowa.

Your generation resources include wind,

hydro, natural gas and coal. We are well positioned to meet YOUR needs for reliable electricity. Wind capacity is growing by 2014: 4% to 15% (300 to 750 mW). We now have the generation capacity to alternate the dispatch of resources between natural gas and coal based on fuel price. At $2.20 mBtu natural gas is competitive with coal.

Utilizing advice from our member Advisory

Committee Touchstone (ACT) group we have chosen to continue and expand plans for our future:

1. Member education on industry conditions, 2. Encouraging energy efficiency savings for

our members and also directly by SIEC, 3. Actively lobbying for reasonable

environmental regulations and, 4. Only when determined necessary by your

member elected Board of Directors, then implement smaller more frequent electric rate increases to avoid rate shock.

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Southern Iowa Electric Cooperative

The Board of Directors has a fiduciary responsibility to find the financial resources to pay ongoing fixed costs. The Board takes into consideration that electricity is a necessity that can be a burden for some members to pay their bills because of being out of work or on a fixed income. The SIEC fixed costs are $60/month/meter based on our most recent cost of service study (see definition below). Your Board sought a balance of the needs of all members by raising the fixed charge from $31 to $34 per month. The residential energy charge is unchanged; therefore, the smaller but more frequent rate increase was 2% of total annual revenues.

FIXED COSTS & REVENUE DECOUPLING Every electric company has two kinds of costs: fixed and variable. Fixed costs include personnel, equipment and distribution lines that must be paid despite weather conditions or energy sales. Variable costs are fluctuating costs such as the price paid for electricity and the amount of electricity used by members. Revenue decoupling is just a way of separating the revenue, the fixed cost of distribution from the ups and downs of electricity consumed. Revenue decoupling enables full support of energy efficiency as required by the Iowa Utilities Board (IUB) and its resulting environmental benefits without having to sacrifice Co-op financial stability. Utility rate structures are based upon averages. The advantage to the member is less high bill complaints in extreme weather. The advantage to the Co-op is less undercharging in moderate weather. Revenue decoupling only addresses the delivery portion, about 25%, of the total bill. It is important to remember that the cost of the electricity, the actual energy consumption, makes up the majority of the bill – typically about 75%. As YOU choose YOUR consumption it is reflected in the supply portion of YOUR bill. Energy efficiency measures are a direct savings!!! OPERATIONS & RELIABILITY

We inspect our poles on a ten year cycle and other electric equipment more frequently. In 2011, we replaced 445 poles out of the 29,257 poles on our system. We built or replaced 10.5 miles of line and completed 86 new services or service changes such as upgrading the size of a transformer.

We continue to work on updating our maps with new technology including a new geographical information system of our 1665 miles of line. We have now approved a new six year construction work plan. The plan includes 18 miles of single phase and 21 miles of three phase line replacement. The average cost is $58,000/mile for single phase and $88,000/mile for three phase lines. In addition, there is also a three phase rebuild with heavier conductor for 13 miles at a cost of $115,000/mile.

FINANCIAL FUTURE We have completed four applications totaling $12 million dollars for Federal Emergency Management Agency (FEMA) Hazard Mitigation grants to strengthen our utility infrastructure. The cost covered by FEMA should be 85% grant dollars. By enhancing YOUR system reliability without adding $10 million in additional debt, we continue to reign in our long-term future expenses. All utility rates are rising to meet fuel and environmental costs. SIEC will help with energy efficiency to assist with mitigating the effect of possible 4% to 6% annual increases. CURRENT NEWS FOR SIEC

We have built the SIEC revolving loan fund (RLF) to $1 million to promote economic development. We assisted establishing other RLF’s to maximize job potential in our community. We are updating industry news, geo-thermal/efficiency articles and include a Board meeting summary on our website at www.sie.coop. We offer the Co-op Connect Card to save money on your other local shopping purchases and prescription discounts. The Co-op Connect vendors offer savings, free of charge to you, in order to advertise their services. We are working with Bloomfield on a Maintenance Contract and building a Joint Use Electric Line through the heart of Keosauqua. We are also continuing to encourage everyone to be safe with electricity through school, first responder programs and public information.

BIG JOB FOR YOUR SIEC BOARD

YOUR Board continues to balance the varied needs between members while insuring that YOUR electricity is safe, reliable, environmentally responsible, cost competitive and that YOUR Cooperative remains financially healthy.

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Meet Your 2012 Board of Director Nominees Dean Black lives at 13561 Copperhead Road, Ottumwa. Dean and his late wife Tena have three grown children Teresa, Lori and Larry. Black has been a Southern Iowa Electric Cooperative member for 36 years. Dean retired from Wapello County where he was employed for 33 years in the secondary road department. Dean’s 120-acre farm south of Ottumwa consists of hay and pasture ground where he raises beef cattle and Percheron and Morgan horses. Black is a member of the Percheron Horse Association, the American Quarter Horse Association, and the Mason Lodge Olive Branch #21 in Agency. Dean served as a member of the Southern Iowa Electric Cooperative Board of Directors from 2002-2004 and 2009-present.

Joy Evans lives at 20528 Nuthatch Avenue, Bloomfield. She has been on the Southern Iowa Electric Cooperative Board of Directors for 36 years, and is currently serving as Board Secretary. During her years of service on the SIEC Board of Directors, Evans has also served as Board President and Treasurer. She has also served as a member of the Northeast Missouri Electric Power Cooperative Board of Directors and as a member of the Iowa Association of Electric Cooperatives Board of Directors. Joy and her husband Steve farm approximately 500 acres and own and operate the Bike Barn, east of Bloomfield. They have two adult sons, Lane and Randy. Joy is a member of the Bloomfield Christian Church, the Optimist Club and the Davis County Development Corporation. She is also on the Davis County Farm Bureau Board of Directors and chairs the Highway 63 coalition for the expansion of the highway between Bloomfield and Ottumwa. Travis Harris lives at 10968 250th Street, Moulton. He and his wife Tiffany have three children: Benjamin (16), Daniel (14), and Annika (8). Travis is a 1993 graduate of Truman State University, and holds Bachelor of Science degrees in Ag-Economics and Animal Sciences. In 1996, Travis and Tiffany returned to Davis County to be a part of the family farm operation and have been members of Southern Iowa Electric Cooperative ever since. Since 1999, Travis has been a representative with Farm Financial Strategies, Inc. His office is located in Bloomfield where he assists area families in farm succession planning. Tiffany is a high school English teacher at Schuyler R-1 schools. Travis currently serves as president of the Moulton-Udell School Board, and also serves on the boards of Davis County Community Foundation and the Davis County Conference Board. He is also a member of SIEC’s Advisory Committee Touchstone. Travis and his family are members of Lancaster Christian Church where Travis serves as an elder.

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Southern Iowa Electric Cooperative

Ron Roberts lives at 18780 Copperhead Road in Ottumwa. He was born and raised in Ottumwa. After moving with different companies he settled back in Ottumwa in 1990. Ron attended Iowa State University and earned his Bachelor of Science Degree in Industrial Management. Ron and his wife Sherrie have three grown children; David, Dan and Dana who enjoyed growing up in the country surrounded by pets, family and nature. Ron is an Engineering Buyer with Vermeer Corporation in Pella, Iowa working on cost and sourcing of new products. Sherrie is a teacher at Evans Middle School in Ottumwa. Ron is on the Board of Elders at Trinity Lutheran Church in Ottumwa, Banquet Committee Member for Wapello County Pheasants Forever, and Treasurer for Pheasant Forever on the State of Iowa Council as well as a local member for National Wild Turkey Federation of Wapello County. Ron and his wife Sherrie are on SIEC’s Advisory Committee Touchstone. Ron has been a member of SouthernIowa Electric for 21 years. Donnie White lives at 32908 215th Street, Bloomfield. He has served on the Southern Iowa Electric Cooperative Board of Directors for 36 years. During his years of service on the SIEC Board of Directors, White has served as Board President, Vice President and Secretary. Donnie is also a member of the Northeast Missouri Electric Power Cooperative Board of Directors and is currently serving as Board Secretary. Donnie and his late wife Alice have two grown children; Debbie Leyda and Mike both live near Bloomfield with their families. White farms 500 acres near Troy and has a cow/calf operation. Donnie is a member of the Farm Bureau, Davis County Cattlemen and Troy United Methodist Church.

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Southern Iowa Electric Cooperative, Inc. Balance Sheets

December 31, 2011 and 2010

2011 2010

ASSETS UTILITY PLANT (At Cost)

Electric Plant in Service $ 37,949,725 $ 36,349,055Construction Work in Progress 61,120 133,502

Total 38,010,845 36,482,557

Accumulated Provision for Depreciation (6,944,393) (6,555,926)Net Utility Plant 31,066,452 29,926,631

OTHER ASSETS AND INVESTMENTS

Investment in Associated Organizations 5,229,036 4,955,729Other Assets and Investments 935,800 905,672

Total Other Assets and Investments 6,164,836 5,861,401 CURRENT ASSETS

Cash and Cash Equivalents 1,088,539 453,073Accounts Receivable, Net 1,105,217 1,269,884Materials and Supplies Inventory 263,286 278,256Accrued Interest Receivable 4,626 4,626Prepaid Expenses 64,451 58,083Current Portion of Notes Receivable 132,500 77,300

Total Current Assets 2,658,619 2,141,222 DEFERRED DEBITS 976,247 743,240

Total Assets $ 40,866,154 $ 38,672,494

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Southern Iowa Electric Cooperative

2011 2010

EQUITIES AND LIABILITIES EQUITIES

Patronage Capital $ 7,683,598 $ 7,423,573Other Equities 7,620,207 6,724,355

Total Equities 15,303,805 14,147,928

LONG-TERM DEBT (Less Current Maturities) RUS Mortgage Notes 1,406,995 924,684National Rural Utilities Cooperative Finance 1,217,907 1,425,005

Cooperative Secured Promissory Notes National Cooperative Services Corporation 1,327,491 1,489,832

Federal Financing Bank Mortgage Note 19,196,347 18,380,423Total Long-Term Debt 23,148,740 22,219,944

ACCRUED SICK LEAVE 116,372 102,914

CURRENT LIABILITIES Current Maturities of Long-Term Debt 883,168 774,788Accounts Payable 691,203 689,665Consumer Deposits 128,507 129,043Unclaimed Patronage Capital Payable 31,007 27,923Other Current and Accrued Liabilities 536,843 505,727

Total Current Liabilities 2,270,728 2,127,146 DEFERRED CREDITS 26,509 74,562

COMMITMENTS

Total Equities and Liabilities $ 40,866,154 $ 38,672,494

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Southern Iowa Electric Cooperative, Inc. Statement of Operations and Patronage Capital

For the Years Ended December 31, 2011 and 2010 2011 2010 OPERATING REVENUES $ 12,457,825 $ 12,451,119 OPERATING EXPENSES

Cost of Power 6,749,663 6,664,564Distribution Expense - Operations 736,494 626,913Distribution Expense - Maintenance 558,189 511,836Consumer Account Expense 255,985 284,294Sales Expense 140,120 127,893Administrative and General Expense 993,217 933,005Depreciation and Amortization Expense 955,248 907,436IUB Taxes 9,520 9,521Other Deductions 7,014 7,849

Total Operating Expenses 10,405,450 10,073,311 OPERATING MARGINS BEFORE FIXED CHARGES 2,052,375 2,377,808 INTEREST ON LONG-TERM DEBT 1,079,545 1,063,467 OPERATING MARGINS AFTER FIXED CHARGES 972,830 1,314,341 GENERATION AND TRANSMISSION AND OTHER CAPITAL CREDITS 412,267 471,661 NET OPERATING MARGINS 1,385,097 1,786,002 NON-OPERATING MARGINS

Interest Income 101,204 98,336Gain (Loss) on Equity Investments 170 218Loss on Disposal of Equipment 1,705 (33)Other Non-Operating Loss (3,613) 2,611

Total Non-Operating Margins 99,466 101,132 NET MARGINS 1,484,563 1,887,134 Patronage Capital - Beginning of the Year 7,423,573 6,524,284 Transfers to Other Equities (868,082) (714,867) Capital Credits Retired (356,456) (272,978) PATRONAGE CAPITAL - END OF YEAR $ 7,683,598 $ 7,423,573

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Southern Iowa Electric Cooperative

SOUTHERN IOWA ELECTRIC COOPERATIVE, INC. ANNUAL MEETING OF MEMBERS

September 8, 2011

The Annual Meeting of the Members of Southern Iowa Electric Cooperative, Inc. was held at the Cooperative's office building at 22458 Hwy 2 in Bloomfield, Iowa beginning at 6:30 P.M. on September 9, 2010. The meeting was called to order by Paul Wells, President of the Cooperative, who presided. David Hopkins, Secretary of the Cooperative, acted as Secretary of the meeting and kept the minutes thereof. Rev. Bill Campbell from the Bethel Mission Center gave an invocation. Chairman Wells invited the members to stand while the National Anthem was played.

The General Manager introduced the Directors, the Cooperative's attorney, and special guests, including representatives from neighboring Cooperatives, State and County Representatives, former Directors and employees. General Manager Aeilts announced that DeWitt and Phyllis Shelton had been selected as the recipient of the Good Neighbor Award for 2010 in recognition of service. They were presented with the award at this time. The General Manager recognized the Advisory Committee Touchstone (ACT) and encouraged interested members to consider being a part of the committee The Chairman announced that the meeting would be conducted in accord with Roberts Rules of Order, and that the Cooperative's Attorney, Dennis L. Puckett, had been appointed parliamentarian. The Secretary read the Official Notice of the meeting, copies of which were mailed to each of the members. The Affidavit of Mailing the Notice was also read by the Secretary. The Notice and Affidavit were ordered to be annexed to the minutes of this meeting.

The Chairman then declared the 71st Annual Meeting of the Members legally convened for the transaction of any and all business that may properly come before it.

The Secretary announced that the minutes of the Annual Meeting of the Members of the Cooperative held on September 9, 2010 had been mailed to the members with the Notice of the Meeting, and he thereupon moved to waive the reading of the minutes. The motion was seconded and carried, and the minutes were ordered to be filed in the records of the Cooperative. The Treasurer, Joy Evans, announced that printed copies of the Annual Financial Report of the Cooperative had been distributed to each of the members, and she thereupon made a motion to dispense with the reading of the report. The motion was seconded and carried, whereupon the report was declared to be approved, and it was ordered to be filed in the records of the Cooperative.

The Chairman introduced Attorney Dennis L. Puckett, who supervised the election of directors. Mr. Puckett announced that the candidates for director had been nominated on May 3, 2010 by a nominating committee consisting of the following members: Milton Robertson, Richard Taylor, Blake Robison, Norma Diers, Alan Gaffney and Carol Jones. Mr. Puckett announced that Cooperative members Karen Cantrell, Ernie Birchmier, Phyllis Ward, and Marietta Huggins had been appointed as Inspectors of Election.

Attorney Puckett presented the Nominating Committee Report, indicating that the following members had been nominated to serve three year terms as directors: Darrell Downing, Alan Janssen, John Probasco, Paul Wells and Dave Yahnke. Following a last call for ballots, a motion was made, seconded and carried to close the balloting, so that the counting and tabulation of ballots could be completed.

The Chairman announced that Hannah Swaim and Katy Jo Bassett were the winners of the Cooperative's NRECA Youth Tour competition and had participated in the Youth Tour to Washington D.C. earlier this year. They each presented a report on their trip.

President Wells presented his annual report. The Chairman introduced Manager Mark Aeilts for his report on the operation of the Cooperative. His report included a discussion of what happens during a power outage.

The Chairman then introduced Duane Highly, Director of Power Production at Associated Electric Cooperative, Inc. in Springfield, Missouri. He gave a report on power supply issues and Associated’s proposed path to 2050. The Chairman called for any old or new business, and there was none. Attorney Puckett presented the Certificate of the Inspectors of Election certifying that Darrell Downing, Paul Wells, and Dave Yahnke had received the highest number of votes and had been duly elected as Directors of the Cooperative to serve three year terms, and until their successors shall have been elected and qualified. Prizes were awarded by lot and entertainment was provided by the Harvest Band during the dinner hour. There being no further business to come before the meeting, upon motion duly made, seconded and unanimously carried, the meeting was adjourned.

David Hopkins, Secretary David Hopkins, Secretary

SOUTHERN IOWA ELECTRIC COOPERATIVE, INC. ANNUAL MEETING OF MEMBERS

September 8, 2011

The Annual Meeting of the Members of Southern Iowa Electric Cooperative, Inc. was held at the Cooperative’s office building at 22458 Hwy 2 in Bloomfield, Iowa beginning at 6:30 P.M. on September 8, 2011.

The meeting was called to order by Paul Wells, President of the Cooperative, who presided. David Hopkins, Secretary of the Cooperative, acted as Secretary of the meeting and keep the minutes thereof.

Rev. Dick Allen from Grace Pointe Nazarene Church gave an invocation. Chairman Wells invited the members to stand while the National Anthem was played.

The General Manager welcomed the Members and then introduced the Directors, the Cooperative's attorney, and special guests, including representatives from neighboring Cooperatives, State and County Representatives, former Directors and employees.

The General Manager recognized the Advisory Committee Touchstone (ACT) and encouraged interested members to consider being part of the committee.

The Chairman announced that the meeting would be conducted in accord with Roberts Rules of Order, and that the Cooperative's Attorney, Dennis L. Puckett, had been appointed parliamentarian.

The Secretary, David Hopkins, announced that it had been determined from the registration of members that a quorum of the members was present in person.

The Secretary read the Official Notice of the meeting, copies of which were mailed to each of the members. The Affidavit of Mailing the Notice was also read by the Secretary. The Notice and Affidavit were ordered to be annexed to the minutes of this meeting.

The Chairman then declared the 72nd Annual Meeting of the Members legally convened for the transaction of any and all business that may properly come before it.

The Secretary announced that the minutes of the Annual Meeting of the Members of the Cooperative held on September 9, 2010 had been mailed to the members with the Notice of the Meeting, and he thereupon moved to waive the reading of the minutes. The motion was seconded and carried, and the minutes were ordered to be filed in the records of the Cooperative.

The Treasurer, Joy Evans, announced that printed copies of the Annual Financial Report of the Cooperative had been distributed to each of the members, and she thereupon made a motion to dispense with the reading of the report. The motion was seconded and carried, whereupon the report was declared to be approved, and it was ordered to be filed in the records of the Cooperative.

The Chairman introduced Attorney Dennis L. Puckett, who supervised the election of directors. Mr. Puckett announced that the candidates for director had been nominated by a nominating committee consisting of the following members: Rex Harris,

Harold Hulme, Milton Robertson, Carol Jones, Wayne Lamb, Sandy Skinner, and Gary Stokesberry.

Mr. Puckett announced that Cooperative members Karen Cantrell, Ernie Birchmier, Phyllis Ward, and Marietta Huggins had been appointed as Inspectors of Election. Attorney Puckett presented the Nominating Committee Report, indicating that the following members had been nominated to serve three year terms as directors: Trent Gregory, James Carnahan, David Hopkins, Robert Orman, Fred Zeitler, Travis Harris, and Virgil Cassill.

Following a last call for ballots, the balloting was declared closed, so that the counting and tabulation of ballots could be completed.

The Chairman noted that Zackary Fligg, Nicholas Johnson and Josh Kent were the 2011 Scholarship winners.

The Chairman announced that Brooke Bodkins and Jacob Ruchti were the winners of the Cooperative's NRECA Youth Tour competition and had participated in the Youth Tour to Washington D.C. earlier this year. They presented a joint report on their trip.

President Wells presented his annual report. He noted the R.O.W. Clearing Project and other activities intended to improve reliability. He also encouraged the Members to pursue energy efficiency measures.

The Chairman introduced Manager Mark Aeilts for his report on the operation of the Cooperative. His report included a discussion of the Touchstone Advisory Group, the Cooperative difference, nuclear energy, and challenges facing the Cooperative.

The Chairman then introduced Jim Jura, CEO of Associated Electric Cooperative, Inc. in Springfield, Missouri. He gave a report on power supply issues and described Associated's service area, its generation resources, the power supply mix, and key challenges for the Associated System. He also discussed the possibility of investing in nuclear energy. Mr. Jura answered questions following his presentation.

The Chairman called for any old or new business, and there was none.

Attorney Puckett presented the Certificate of the Inspectors of Election certifying the following directors had received the highest number of votes and had been duly elected as Directors of the Cooperative to serve three year terms, and until their successors shall have been elected and qualified.

Three year term ( three to be elected): Trent Gregory, David Hopkins, and Fred Zeitler.

Prizes were awarded by lot during the meeting and entertainment was provided by the Davis County Community Band before the meeting.

David Hopkins, Secretary

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SOUTHERN IOWA ELECTRIC COOPERATIVE, INC. NOTICE OF ANNUAL MEETING OF MEMBERS

The Annual Meeting of the Members of Southern Iowa Electric Cooperative, Inc. will be held at the Cooperative office and warehouse building at 22458 Hwy 2, Bloomfield, Davis County, Iowa at 6:30 P.M. on Thursday, September 6, 2012, to take action upon the following matters: 1. The reports of officers, directors, and committees. 2. The election of three directors for a term of three years. 3. All other matters as may regularly come before said meeting, or any adjournment or

adjournments thereof.

In connection with the election of directors scheduled for this meeting, the following members have been nominated for director by the Nominating Committee appointed by the Board of Directors of the Cooperative pursuant to the Bylaws. THREE-YEAR TERM (Three to be Elected)

Dean Black Joy Evans Travis Harris Ron Roberts Donnie White

You are urged to attend the meeting, hear the reports of the officers, vote for directors, and transact such other business as may come before the meeting.

DATED this 8th day of August, 2012.

David Hopkins, Secretary David Hopkins, Secretary

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Southern Iowa Electric Cooperative

2012 Iowa Rural Electric Youth Tour

Michael Kline of Williamsburg, IA and Zachary Musgrove of Drakesville, IA recently participated in the Electric Cooperative Youth Tour program in Washington, D.C. sponsored by Southern Iowa Electric Cooperative. They spent six days in Washington, D.C., with 29 peers from across Iowa. Each year in June, an action-filled week provides high school students opportunities to learn first-hand what it is like to be involved in politics, community service and today’s pressing issues in the energy industry. Students met their elected representatives in the U.S. House and Senate, saw historic sites, and met over 1,500 students from across the country who participated in their state’s Youth Tour program. The Electric Cooperative Youth Tour has been a joint effort of local electric co-ops, such as SIEC, their statewide co-op associations, and the National Rural Electric Cooperative Association (NRECA), based in Arlington, Va., for 48 years. Zac Musgrove said he had the experience of a lifetime meeting with peers from other states and NRECA staff during the Washington trip. “The youth tour was so amazing,” Musgrove said. “It was really cool to meet my senator and representative, and learn about politics up-close. Plus, I made friends from nearly every state and experienced history first-hand. I stood in front of the White House talking with our countries secret service agents; that was an incredible experience!” Since 1964, the nation’s cooperative electric utilities have sponsored more than 50,000 high school juniors and seniors for visits to their U.S. congressional delegations, energy and grassroots government education sessions, and sightseeing in Washington. NRECA is the national service organization representing the nation’s more than 900 consumer-owned, not-for-profit electric cooperatives, which provide electric service to 42 million people in 47 states.

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SIEC Awards Three $2000 Scholarships To Area High School Seniors

Southern Iowa Electric Cooperative recently awarded three $2000 scholarships to area high school seniors. The winners of the 2012 Southern Iowa Electric Cooperative Academic Scholarship’s are: Cayle Boatman graduate of Davis County High School, Cayle is the daughter of Brian & Jan Stevenson and Jack & Sharon Boatman of Bloomfield, she is planning on attending the University of Northern Iowa; Madison Probasco a graduate of Moulton-Udell High School, Madison is the daughter of John & Brenda Probasco of Moulton, she is planning on attending Iowa State University; and Leah Rushman a graduate of Davis County High School, Leah is the daughter of Jim & Lori Rushman of Ottumwa, she is planning on attending Graceland University. In order to have been considered for the scholarship, students must be high school seniors, the student or their parent/guardian must be members of Southern Iowa Electric Cooperative (an exception will be made for a student enrolling in Lineman School), the student must have been accepted by an accredited two- or four-year college, university or vocational-technical school in the fall of 2012 and be a U.S. Citizen. Southern Iowa Electric Cooperative would like to take this opportunity to congratulate all of the students who applied for the 2012 Southern Iowa Electric Cooperative Academic Scholarships. We wish you all well in your future endeavors.

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Southern Iowa Electric Cooperative

Cayle Boatman Madison Probasco Leah Rushman

Your SIEC Board of Directors

Pictured L-R are Darrell Downing, Joy Evans, Dave Hopkins, Fred Zeitler, Trent Gregory, Donnie White, Paul Wells, Dean Black, and Dave Yahnke.

73rd Annual Meeting Agenda Thursday, September 6, 2012, 5:30 p.m.

at the office of Southern Iowa Electric Cooperative, Inc., 22458 Highway 2, Bloomfield, Iowa

4 – 6:00 p.m. Member Registration & “Meet A Lineman” for kids!

4 – 5:30 p.m. Blood Pressure Screening (Provided by Davis County Home & Community Health)

5:30 – 6:30 p.m. Meal Provided: Hamburger or Hotdog, Chips & Dessert Entertainment: Thadd Gray will play through the dinner hour

6:30 p.m. Business Meeting w/Prize Drawings Darrell Downing, President, Southern Iowa Electric Cooperative Mark Aeilts, CEO, Southern Iowa Electric Cooperative Tim Coonan, Dir. Government Relations, Iowa Association of Electric Co-ops

8:00 p.m. Grand Prize Drawing (Must be present to win)

Building a new home? Looking at replacing your heating and cooling system in your existing home? Don’t cross a Ground Source Heat Pump off your list because you think they are too

expensive…Let’s look at the facts! Did you know…

SIEC offers a rebate of $750/Ton on ground source heat pumps with an EER of 19.1 or greater

There is a Federal Tax Credit available-30% of the cost with no upper limit through December 2016 (check with your tax advisor as to how the credits relate to your specific tax situation) There is a NEW Iowa Tax Credit that allows you to claim 20% of the federal tax credit amount

When installing a ground source heat pump in an existing home SIEC offers a loan program…you can finance up to 70% for 7 years at 5% interest!

Benefits of Ground Source Heat Pumps Uses 25-50 percent less electricity than conventional heating or cooling systems Allows for design flexibility and can be installed in both new and retrofit situations Provides excellent “zone” spacing conditioning, allowing different parts of your home to

be heated or cooled to different temperatures. Durable and highly reliable

Example: 4Ton Ground Source Heat Pump

Estimate $20,000 SIEC Rebate - 3,000 Fed Tax Credit - 6,000 Iowa Tax Credit - 1,200 Member Cost $ 9,800 *tax credits are not refundable

Watch for SIEC’s Fall Conference on Ground Source

Heat Pumps!