2011 REVENUE DOLLARS Breaking Down Harmon Electric’s Costs

Charles Paxton, general manager of Harmon Electric Association, has been known to pull a dollar’s worth of change out of his pocket to show employees or consumers the components that make up electricity bills. “It’s a great way to show how our revenue dollars are spent”, he says.

Instead of pocket change, we will use the following image of a paper dollar cut into four unequal pieces to show how Harmon Electric’s 2011 revenue dollars were used.

Wholesale Power \$4,133,933 (53%)

Operations &#38; \$2,153,252

Maintenance (28%)

Depreciation \$709,524 (9%)

Interest \$783,927 (10%)

“This image reveals that fifty-three cents of every dollar goes to buy Wholesale Power”, Charles explains. “Twenty-eight cents is used for Operations &#38; Maintenance, nine cents of every dollar goes for Depreciation, and ten cents is for Interest Expense.” He realizes that people are visual learners and hopes this illustration clearly explains how Harmon Electric’s revenue dollars are used.

Where Harmon Electric’s 2011 revenue dollars came from: Residential Sales

Seasonal &#38; Farm Sales Irrigation Sales

Commercial &#38; Industrial Sales Other Operating Revenues Capital Credit Allocations Non Operating Margins

10 YEAR KWH SALES COMPARISON

10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

0.0

KWH SALES (MILLIONS)

25.00 — 20.00 — 15.00 — 10.00 — 5.00 — 0.00 —

\$2,562,447 \$ 603,012 \$1,885,325 \$2,972,328 \$ 165,661 \$ 134,786 \$ 26,252

30.7% 7.2%

22.6% 35.6% 2.0% 1.6% 0.3%

UTILITY PLANT INVESTMENT

DOLLARS (\$) (MILLIONS)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

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