2018 Annual Report

To Our Members …

Gibson Electric Membership Corporation is your local, not-for-profit, member-owned and member-controlled electric cooperative. Our purpose is to serve our members and our communities. In our 2018 Annual Report, which begins on page 20, we will share with you our recent accomplishments, our challenges and our commitment to community.

Highlights include a continued investment in our electric infrastructure to enhance service reliability and the launch of Phase I in our fiber-to-the-home buildout. Both are essential to a high quality of life and to provide opportunities for our members and our communities.

We also provided opportunities to our local young people through the Washington Youth Tour trip and scholarship program, Kentucky Youth Tour and Tennessee Youth Leadership Summit.

Our employees donated more than 1,000 pounds of nonperishable food items to our communities’ food banks in 2018, bringing the cumulative total to 5,524 pounds contributed since 2009. Our employees and board members also individually invested in our communities through volunteerism and service on local committees and boards.

Whether we’re hosting a meeting to update you on your cooperative’s business, helping our youth to reach their full potential or serving alongside you at a community event, you can rest assured that we are not only committed to providing you with safe, reliable and affordable electric service but also to being a good friend and neighbor.

Power & Opportunity

Every day, the Gibson Electric Membership Corporation board of trustees and employees strive to deliver on our mission: to enhance our members’ quality of life by providing exceptional services that are reliable, affordable and safe.

Meeting our member-owners’ wants and needs for electric power is critical, but it’s only part of what we do. We also provide opportunity, and we are ever evolving to meet the needs of our members and our communities.

Affordability

In October 2018, we completed the process of merging with the former Hickman-Fulton Counties Rural Electric Cooperative Corporation when we aligned our rates. Our Kentucky members have saved more than $3 million since the Jan. 1, 2016, merger.

We are very aware of the need to provide affordable service to our members. For this reason, Gibson EMC conducted a cost-of-service study, which was performed by an outside consultant, in 2018.

We do this from time to time to clearly understand the true cost of providing service within each rate class of members and to ensure that our rates are fair and equitable.

Safety

We also are committed to ensuring the safety and security of our member information. To this end, we installed new data storage arrays in diverse locations during 2018. This additional storage provides vital redundancy and a higher level of data protection for our members.

Keeping our members and our employees safe is also mission-critical. We regularly present safety demonstrations for our schools and civic groups. We also continuously emphasize safety practices to our employees. We are proud and thankful that our Alamo, Hickman, Tiptonville, Trenton and Corporate Member Service Center employees all completed 2018 without a lost-time injury.

Reliability

Service reliability is another high priority for Gibson EMC and our members. Rebuilding the Trenton substation was a large project we completed in 2018 that was necessary to enhance service reliability for members in and around Trenton.

During the past year, Gibson EMC also prepared, submitted and had approved its 2019-2022 construction work plan. The most significant projects within the work plan are the construction of a new substation in the south Medina area and the rebuilding of the Alamo substation along with Phase I and Phase II of the fiber buildout. Other projects include upgrades to our Polk, Ridgely and Pierce substations. Within this four-year work plan, we also will convert some areas in Kentucky to 25 kV to improve service reliability.

Fiber will continue to be used for communications among our member service centers and substations. It also will expand use of our Supervisory Control and Data Acquisition system and allow us to provide members with more detailed information on energy use. Specifically, it will enable us to better pinpoint outages, restore service more quickly and operate more efficiently.

Additionally, extending fiber will enable us to better monitor transformers, regulators, reclosers, capacitor banks, automated metering infrastructure, power quality, high voltage and line temperatures. It also will empower us to better control system load and monitor distributed energy resources like solar and wind as well as energy storage.

On top of the many ways fiber will improve electric service to all members, it also will benefit those who want to purchase high-speed, fiber-based internet service from Gibson Connect, Gibson EMC’s wholly owned, not-for-profit subsidiary.

Gibson Connect has been a great tool for our family-owned business. It has lived up to our expectations by allowing us to work faster and more efficiently.
Tony Kirk, Owner, and Jennifer Kirk Browning, Bookkeeper
Highway 54 Salvage and West Tennessee Pick and Pull

Broadband

In 2018, Gibson EMC completed a 40-GIG ring connecting all of our member service centers to strengthen our internal communications and our ability to remotely monitor and control our electric system. The fact that there are redundant communications paths to each member service center reduces the likelihood of communications service disruptions. It also provides a strong backbone for our fiber-to-the-home offerings.

For years, our members have been urging us to help provide access to high-speed internet service, so as soon as the Tennessee Broadband Accessibility Act passed in 2017, we formed Gibson Connect, our wholly owned, not-for-profit subsidiary.

Knowing that building a fiber-to-the-home system across nearly 3,100 miles of line would be a massive and time-intensive project and because we are committed to do the buildout in a fair and financially sound way, we decided to use a web-based participation system to guide the order of our buildout.

Join.gibsonconnect.com was launched Oct. 10, 2017. On Jan. 26, 2018, Medina became the first zone to hit its participation goal. Dyer and Three Way soon followed. These zones and the area covered by a $1.3 million Tennessee Broadband Accessibility Grant (in Ridgely, Tiptonville and Samburg) are included in Phase I of our fiber-to-the-home buildout.

Phase I work began with consultants starting engineering design in the spring, and middle-mile aerial construction began in August. We’ve experienced some delays due to problems with consultant engineering design and record-setting rainfall, but we have continued to push the buildout forward as fast as we can. Those members we have connected absolutely love the service from Gibson Connect!

Pat Chaney Lykins of Three Way posted to our Gibson Connect Facebook page: “We just got connected today! The service is very fast. We are really excited to have Gibson Connect and are looking forward to having the television service. Thank you, Gibson Connect, for caring and doing such great work.”

Our goal is to ultimately provide all our eligible members with access to high-speed, fiber-based service, but we must use a phased approach, and it will take time — probably about five years to complete the buildout.

To help move the project along and hold down costs, we are vigorously pursuing grants for those areas that qualify. So far, we have been awarded a $1.3 million Tennessee Broadband Accessibility Grant and $1.22 million in CAF II funding for areas in both Tennessee and Kentucky. Recently we also applied for two more Tennessee Broadband Accessibility Grants for Gibson Connect Network Technician Taylor Coomer and Gibson EMC GIS Technician Rachel Cates register a member for high-speed internet service at Gibson EMC’s member appreciation event in Medina.

Gibson Connect lets me download a two-hour and 13-minute HD movie in one minute and 41 seconds. Fast service and the installer was very courteous. He made sure it was done right.
Donald Hubbard, Member Three Way

Gadsden and northern Obion County, and we plan to apply for low-interest loans or grants through the USDA Rural Utilities Service when they become available.

This is an exciting time for our members. Access to this essential service will improve educational opportunities, help create jobs, enable our existing industry customers to better compete and help attract new industries.

Community

We appreciate hearing from you. Since our inception, our member-owners’ feedback and engagement have guided our long-term decisions. This is why we hold annual meetings and member appreciation events each year. We value your perspective and that of our board members — the representatives you elect and who also are members of our co-op and communities.

As a hometown, member-owned business, we have a real stake in our communities. That’s why we partner each year with CoBank, a national cooperative bank with whom we do business, to provide a total of $10,000 in Sharing Success grants to local 501(c)(3) nonprofits that share our commitment to improve the quality of life for those in our service area. In 2018, we contributed $3,500 to the Obion County Senior Center Association, $3,000 to the Arts Council of Crockett Tennessee and $3,500 to the Friends of the Tiptonville Library. Our Kentucky members also have helped others in the area through our Change for the Community program in which members can opt in to round up their electric bills to the next dollar. The Change for the Community Committee recently presented $8,000 to 501(c)(3) nonprofit organizations in our Kentucky service area. We’re working on expanding this wonderful program to our Tennessee communities.

Driven by a deep commitment to providing opportunities for our member-owners and our communities, Gibson EMC actively supports area chambers of commerce throughout our 12-county service area in job creation and economic development efforts.

Additionally, our youth programs are designed to educate and inspire the next generation of community leaders. Even the taxes we pay and the jobs we provide have an impact.

Each year, Gibson EMC sends local students who write winning short stories on the Washington Youth Tour. These students learn about electric co-ops and grassroots political advocacy, and the trip winners tour our nation’s capital and make friends and memories that will last a lifetime. Scholarships also are available for members’ children who participate.

By pooling our change to help those who are less fortunate, joining together to recruit jobs to our communities, reinvesting in our electric infrastructure and building a broadband system to provide an increasingly intelligent electric grid and access to high-speed internet service, Gibson EMC is working to provide our member-owners power and opportunity.

2018 Consolidated Financial Statements

(The Consolidated Financial Statements include the operations of Gibson Electric Membership Corporation and of Gibson Connect LLC.)

President and CEO & Attorney

Members of the Board of Trustees

Auditor’s Statement

Gibson Electric Membership Corporation’s books were audited by the firm of Alexander, Thompson, Arnold PLLC, Certified Public Accountants, Union City. Copies of the audit report will be on file July 1, 2019, at Gibson EMC’s Corporate Office, 1207 S. College St., Trenton, TN 38382.