Associated Electric Cooperative Inc. is owned by and provides wholesale power to six regional

and 51 local electric cooperative systems in Missouri, southeast Iowa and northeast Oklahoma that

serve about 875,000 customers.

AECI’s mission:

Associated’s mission is to provide an economical and reliable power supply and support services to its members.

AECI’s vision:

Associated Electric Cooperative will be the lowest-cost wholesale power supplier.

Critical strategic objectives:

• Work safely to ensure an accident-free workplace.

• Involve, listen to and inform member-owners.

• Develop and maintain effective strategic relationships.

• Be financially strong and flexible.

• Invest in employees, engage them and recognize results.

• Influence sound energy policy.

• Proactively identify and manage the risks in our business.

• Implement and promote energy efficiency as a power supply resource.

• Protect our key generation and transmission assets for the long term.

AECI facts:

• Number of employees: About 665

• Three main locations: Headquarters, New Madrid Power Plant and Thomas Hill Energy Center

• Total generating capacity: 5,237 MW (including contracted sources)

• Miles of high-voltage transmission lines owned by AECI and its six owner G&Ts: 9,518

© 2009 Associated Electric Cooperative Inc. All rights reserved.

Three tiers form strong system

Associated Electric Cooperative Inc. is the source of wholesale electric power for an

extended system of member electric cooperatives. The system is organized into three levels or

“tiers,” each with its own set of responsibilities.

The system’s top tier is made of 51 distribution cooperatives in Missouri, southeast Iowa

and northeast Oklahoma. These distribution cooperatives provide electric service directly

to member-consumers, including businesses, farms and households. To provide the best

service possible, distribution cooperatives take on many different responsibilities, including

installation and maintenance of power lines from substations to member-consumers,

planning for the future needs of their service areas, working with communities to encourage

economic development and helping their members learn to use energy more effi ciently.

These cooperatives serve about 875,000 member-consumers.

At the second level of the system are the regional cooperatives that transmit Associated’s

power to the 51 distribution cooperatives. These organizations are known as generation

and transmission cooperatives (G&Ts), and they serve six geographical areas of Missouri,

southeast Iowa and northeast Oklahoma. G&Ts work on a regional level as construction

agents and also own and maintain all transmission systems above 161-kilovolt. At one time

the G&Ts not only transmitted the power to their member distribution cooperatives, but they also had all of the responsibility for generating

and/or purchasing it as well.

In 1961 the six G&Ts joined to form the system’s third tier, Associated Electric Cooperative Inc. Associated was subsequently given the

responsibilities for generation and power procurement, leaving transmission as the primary responsibility of the G&Ts.

In order to provide for the system’s ever-growing demand for wholesale electricity, Associated has built a flexible mix of resources, including

coal and gas-based power plants, hydropower, Missouri wind power, the Take Control & Save energy efficiency program, a vast and

integrated transmission system and interconnections with neighboring utilities. In addition to its generation and power purchasing responsibilities,

Associated also provides its member systems with economical services related to such business needs as insurance, marketing,

economic development, environmental services and labor relations.

The three-tiered system brings efficiency through specialization at each level of the system. The entire three-tiered system benefits from

the economy of scale and, because each tier can react quickly to changes, the overall competitiveness of the system is improved.

The financial success of Associated is a reflection of the success experienced by the three-tiered system.

Associated has wholesale electric rates that are among the lowest in the United States. Associated continues to be one of the few wholesale

power suppliers rated AA by Standard & Poor’s and Fitch Ratings Ltd. and A1 by Moody’s Investors Service.

© 2009 Associated Electric Cooperative Inc. All rights reserved.

Associated Electric Cooperative uses a mix of generation

resources to supply reliable, economical electricity to

member systems.

AECI’s resources include our aggressive energy efficiency

program; baseload generation supplied by two coal-based plants

producing low-cost, around-the-clock power; intermediate generation

provided by three efficient, low-emissions combined-cycle natural gas

plants; and four peaking gas plants that provide power when

demand rises on cold winter or hot summer days.

AECI also has contracted power sources, including

renewable hydropower, biomass and wind energy

from northwest Missouri’s first utility-scale wind

farms. The cooperative’s long-term commitment

to buy the wind power, its transmission lines and

customers made the first utility-scale wind farms in

Missouri a reality.

AECI implemented its Take Control & Save energy efficiency

program systemwide in 2008 to build upon the longtime energy

efficiency efforts of member cooperatives.

The integrated transmission system owned by Associated and its member systems consists of 9,518 miles of line, as well as the related

substations. This transmission system enables Associated to reliably serve members and transact power purchases and sales for the benefit

of its owner systems.

Coal generation:

New Madrid Power Plant – 1,200 MW

Thomas Hill Energy Center – 1,153 MW

Intermediate generation:

St. Francis Power Plant – 501 MW

Chouteau Power Plant – 522 MW

Dell Power Plant – 580 MW

Contracted generation:

Chamois Power Plant – 68 MW

KAMO-GRDA Unit 2 – 198 MW

Renewable power

Hydropower

Southwestern Power Administration – 478 MW

Wind:

Bluegrass Ridge – 57 MW

Cow Branch – 50 MW

Conception – 50 MW

Lost Creek Wind Farm –150 MW, construction complete in 2010

Peaking generation:

Holden Power Plant – 321 MW

Nodaway Power Plant – 182 MW

Essex Power Plant – 107 MW

Unionville Power Plant – 45 MW

© 2009 Associated Electric Cooperative Inc. All rights reserved.

REA brings electricity to rural America

In the early part of the 1900s, electric service was a luxury enjoyed only in cities, where the concentration of people was high enough to make it economical.

Meanwhile, in sparsely populated rural areas where electrification wasn’t profi table, people were left in the dark – and left behind.

In 1935, only 6.4 percent of the farms in Missouri had electricity. Yet, more than 90 percent of farms in France, Germany, Holland and Switzerland were

electrified during the same period.

The federal government realized that if rural America was to be electrified, the country as a whole would have to lend a helping hand. So in 1935 Franklin

Delano Roosevelt signed an executive order creating the Rural Electrification Administration. A year later Congress gave the agency the money and

power needed to promote rural electrification by providing low-cost loans to build transmission and generation facilities.

Rural cooperatives formed rapidly to take advantage of the favorable financing. Farm by farm, village by village, the lights went on across rural America.

As electrical needs grew, the REA continued to provide low-cost financing. Eventually, Associated’s major generation facilities, built primarily during the

1960s and 1970s, would be financed with help from the REA, now the Rural Utilities Service.

As late as 1961, the year Associated was formed, a large majority of its electric consumers were involved in farming. Today, less than 20 percent claim

to receive their principal income from agriculture. Meanwhile business and industrial customers have grown to about 25 percent of member energy sales.

As the major provider of wholesale power to electric cooperatives in Missouri, southeast Iowa and northeast Oklahoma, Associated takes seriously its

vital role in the fabric of the regional rural economy. Not only does it strive to keep rates as low and stable as possible, but it also works with communities

to attract and develop industry. In addition, Associated is an active member of the Association of Missouri Electric Cooperatives, which assists rural

electric cooperatives and promotes growth and development of Missouri’s rural electric system.

Voluntary and open membership

Cooperatives are voluntary organizations, open to all persons able to use their services and

willing to accept the responsibilities of membership.

Democratic member control

Cooperatives are democratic organizations governed by their members, who actively participate

in setting policies and making decisions.

Members’ economic participation

Members contribute equitably to, and democratically control, the capital of their cooperative.

Autonomy and independence

Cooperatives are autonomous, self-help organizations controlled by their members.

Education, training and information

Cooperatives provide education and training for their members, elected representatives,

managers and employees so they can contribute effectively to the development of their

cooperatives.

Cooperation among cooperatives

Cooperatives serve their members most effectively and strengthen the cooperative movement

by working together.

While focusing on member needs, cooperatives work for the sustainable development of their

communities.

Electric cooperatives are private, nonprofit independent electric utilities, owned by the members they serve. Democratically governed businesses,

electric cooperatives are organized under the Cooperative or Rochdale Principles, anchoring them firmly in the communities they serve and ensuring

that they are closely regulated by their consumers.

Cooperative principles

© 2009 Associated Electric Cooperative Inc. All rights reserved.

Timeline shows roots and development of wholesale

power supplier

1935: President Franklin D. Roosevelt signs an executive

order creating Rural Electrifi cation Administration

(REA).

1961, Feb. 6: Fifteen incorporators sign articles of

incorporation to create

Associated Electric Cooperative Inc.

1966: Associated’s first big power plant, Thomas Hill

Unit 1 at 180 MW, begins operating.

1969: Thomas Hill Unit 2 goes on line, adding 303

MW.

1972: New Madrid Power Plant’s

600-MW Unit 1 goes on line.

1977: New Madrid Power Plant Unit 2 goes on line.

1978: Associated enters the coal business, buying Bee

Veer and Prairie Hill mines near Thomas Hill Power Plant

from the Peabody Coal Co. and begins operations in 1980.

1982: Thomas Hill Unit 3, a 670-MW unit, goes on line.

1993: Associated exits the coal business, closing its

mines to meet new environmental air regulations.

1995: The conversion to low-sulfur coal at both Thomas

Hill and New Madrid power plants is completed, reducing

emissions of sulfur dioxide 90 percent and allowing Associated

to implement an average overall rate reduction of 17

percent.

1997: KAMO Power selects AECI as the power

supplier for its nine electric cooperatives in northeast

Oklahoma. KAMO’s Missouri cooperatives already were

being served by Associated.

1999: The first units of a 1,633-MW construction phase

of gas-based generation come on line to meet members’

peak demand needs. Intermediate and peaking power

plants that begin operations in the next four years are:

• The Essex (107 MW) and Nodaway (182 MW) power

plants begin operations in June 1999.

• The 250-MW St. Francis Unit 1 is dedicated in September

1999.

AECI formed to provide low-cost power

• The 522-MW combined-cycle Chouteau Power Plant

begins operations in June 2000.

• St. Francis Unit 2 (251 MW) is completed in March 2001.

• The 321-MW Holden Power Plant comes on line to

meet peak demands in May 2002.

2000 - 2002: Associated constructs environmental

controls (selective catalytic reduction equipment) on both

units at its New Madrid Power Plant. The equipment,

designed to reduce emissions of nitrogen oxides by about

93 percent, makes New Madrid one of the cleanest coalbased

plants in the country with cyclone burners.

2006: Associated, Wind Capital Group and John Deere

Wind Energy announce plans to construct Missouri’s first

utility-scale wind farms. Associated agrees to purchase all

energy produced by the three wind farms for the next 20

years. Praised for its bold leadership in renewable energy

development in Missouri, Associated is awarded “2006

Wind Co-op of the Year” by the U.S. Department of Energy.

2006: Associated begins installation of additional

environmental controls at its Thomas Hill Energy

Center to meet Clean Air Interstate Rule (CAIR)

requirements.

2007: Associated receives the 2007 Kenes C. Bowling

National Mine Reclamation Award in the coal category for

reclamation of the Bee Veer mine in Macon County, Mo.,

part of Thomas Hill Energy Center.

2007: About 475 member-owners, state and federal

legislators and officials attend the dedication Sept. 17 of

Bluegrass Ridge Wind Farm, Missouri’s first utility-scale

wind farm.

2007: Associated’s Dell Power Plant begins producing

power. The 580-megawatt facility is a low-emissions,

efficient combined-cycle gas plant used to meet member

systems’ growing energy needs and add to Associated’s

diverse power generation assets.

2007: Associated is presented with the U.S. Department

of Interior Office of Surface Mining’s highest

award for its innovative reclamation of the Bee Veer Mine

in Macon County, Mo.

2008: Cow Branch and Conception wind farms in

northwest Missouri begin producing power.

2008: Associated’s “Take Control and Save” energy

efficiency program debuts March 7. The program builds on

cooperatives’ longtime energy efficiency efforts.

2008, December: Associated completes $424 million

construction project that includes installing selective

catalytic reduction equipment (SCR) on all three

units at Thomas Hill Energy Center, enabling a 90

percent systemwide reduction of nitrogen oxides

(NOx) emissions by the Jan. 1, 2009, CAIR

deadline.

2009, April 16: Associated and Wind Capital Group

announce the fourth and largest wind farm in Missouri :

the 150-megawatt Lost Creek project located in DeKalb

County . Again, Associated helps make the project

possible by providing transmission and agreeing to buy

all the power produced by the wind farm for the next 20

years.

Learn more at www.aeci.org.

© 2009 Associated Electric Cooperative Inc. All rights reserved.

In the cooperative system you’re a part of, more than 875,000 rural homes, farms and businesses receive a significant

amount of their electricity from renewable wind, biomass and hydropower sources. This is happening right now, thanks to

Associated Electric Cooperative and the regional and local rural electric cooperatives that supply and distribute this renewable

power.

Co-op customers have been buying green since Associated first offered a green energy program in 2003. In 2009, 10 percent

of the electricity provided by Associated came from renewable sources. Here’s where that energy comes from:

cooperative is buying all the power for 20 years from three operating wind farms. A fourth farm is under construction in northwest

Missouri. This commitment, plus access to the strong high-voltage transmission system owned by Associated Electric

Cooperative and its members, makes wind power a reality for co-op customers.

All four wind farms are expected to produce the amount of energy used by about 55,000 member households when

considering the nature of wind power and the varying ways members use electricity. Because wind is intermittent, Associated

supplements it with fuel-based generation to ensure reliable electricity for members. Without the cooperatives’ long-term commitment,

transmission lines and customers, this wind energy would just be blowing away.

most of us, but to Associated Electric Cooperative and Central Electric Power Cooperative, biomass is just another fuel to

produce electricity. That’s exactly what’s happening at Central’s Chamois Power Plant near Jefferson City, Mo., where these

renewable fuels have been mixed with coal. Ongoing experiments will identify forms of biomass most efficient for power production.

Every bit of biomass that replaces a chunk of coal means fewer carbon emissions and cleaner air.

Large-scale, federally owned hydropower projects in Missouri, Oklahoma and Arkansas provide emissions-free electricity

for co-op customers. Low-cost hydropower helps offset more expensive generation, and because it can be brought on line

quickly, it’s a valuable resource when demand is highest. The water in your favorite lake likely is good for more than fishing

and boating: it’s helping keep your electricity reliable and affordable.

27 2.1-MW turbines

57 MW

10,000 acres - Gentry County

Commercial operation, 2007

24 2.1-MW turbines

50 MW

7,000 acres - Nodaway County

Commercial operation, 2008

24 2.1-MW turbines

50 MW

7,000 acres - Atchison County

Commercial operation, 2008

100 1.5-MW turbines

150 MW

20,000 acres - DeKalb County

2010 completion date

Associated will connect a fourth,

and Missouri’s largest, wind farm to its

transmission system and buy all the power

produced by the 150-megawatt Lost Creek Ridge

Wind Farm.

All four wind farms are expected to produce the amount of energy

used by about 55,000 member households when considering the nature

of wind power and the varying ways members use electricity. Because wind is

intermittent, Associated supplements it with fuel-based generation to ensure

reliable electricity for members.

1072010

Our power supplier, Associated Electric Cooperative,

generates electricity for six regional and 51 local electric

cooperatives in Missouri, southeast Iowa and northeast

Oklahoma that serve more than 875,000 households,

farms and businesses.

Although member cooperatives relied on coal-based

power plants to provide 80 percent of their electricity in

2009, Missouri wind energy from three northwest farms

supplied 1 percent of those energy needs.

Wind is part of a mix of resources, including the Take

Control & Save energy efficiency program, hydropower,

coal and gas, that Associated uses to supply reliable and

affordable electricity for members.

© 2010 Associated Electric Cooperative Inc. All rights reserved.

1072010

© 2010 Associated Electric Cooperative Inc. All rights reserved.

1072010