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Executive Report …………………....Page 2

Notice of 2015 Annual Meeting ……………….…...Page 3

Meet Your Board of Director Nominees ……………………Page 4

Financials…………..….…….Page 6

2014 Annual Meeting Minutes ...…………………Page 8

2015 Iowa Rural Electric Youth Tour …………………..Page 11

2015 SIECScholarship Winners ……......................Page 12

Annual MeetingAgenda ……….Inside 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 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.

2014 Cooperative Highlights

Operating Revenue………………………. $13,845,722

Net Margins………………………………...$1,876,968

Total Assets………………………………. $46,360,940

Patronage Dividends Distributed……………. $234,456

Miles Energized Line………………………......... 1,675

New Services………………………………..……… 63

Active Membership……………………….…….. 3,847

Number of Employees………………………...……. 23

CountiesServed……..Appanoose, Davis, Van Buren and Wapello

Cover Photo: SIEC Linemen: Left top to bottom…Tom Redding, Scott Johnson, Anthony Ondriska, and Cody Pickens. Right top to bottom: Tim Hamburg, Brian Roberts, and Mike Gerritson

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

We are privileged to serve as your Board President and CEO/Manager. The electricity business is a complicated network of generation, transmission, and distribution, with the distribution system beginning at the substation and ending at the customer's meter.

For 2014 SIEC plant growth was 5% for $2,098,200 to replace old poles and wires vs. increase in kWh sales of 1.1% for $717,500. Fortunately, we have now secured 82 miles of FEMA Hazard Mitigation Project Grants of which SIEC will only spend approximately 20% of the cost.

SIEC Mission, Vision and long term Goals:

1. Economic Development and Training: SIEC’s economic development assets (i.e. $1 million dollar revolving loan fund & relationships with economic development partners) and expertise are provided to support projects that enhance economic viability. We are also continuing to encourage everyone to be safe with

2. Member Involvement: We encourage the use of the Cooperative Connect Card so you can save money as you shop locally or purchase prescriptions. We continue seeking input from our Advisory Committee Touchstone (ACT) group which consists of 60 members. An example is our new Take Control & $ave demand rate option.

3. Energy Information and Management: We strive to increase members’ understanding of their service, energy consumption and account (discussions of

meeting). In 2014, SIEC provided co-op network appliance rebates totaling $64,053 to 112 accounts for an

system wide electricity saved by customer-member-

Darrell Downing Mark Aeilts

4. Rates: We review the Cooperative’s current rate charges to ensure fairness, encourage higher load

average load factor customers. We evaluate costs each year to seek the best value for our member-owners. Examples include competitive bidding, FEMA Grants and peak shaving.

5. Financial Soundness: balance the use of debt vs. equity and meet lender requirements. We are borrowing less while utilizing FEMA Grants. We are installing LED Security Lights which will save 1,000,000 kWh per year. For 2014, equity to assets was 40%. 6. Plant and Reliability: We maintain system planning and maintenance practices through the

With the recent completion of doubling the width of our tree clearance right-of-way we have reduced outage time per consumer (excluding major storm events) from 168 to 85 minutes --- a 57% reduction!

7. Governance: We provide member updates monthly including a board meeting summary on our website at www.sie.coop.

8. Human Resources: We retain and attract

working together as a professional team.Your Board continues to balance the varied

needs between members while ensuring that your electricity is safe, reliable, environmentally responsible, cost competitive and your Cooperative remains financially healthy. Please remember --YOU HAVE A VOICE WITH US!

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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 building located at 22458 Highway 2, Bloomfield, Davis County, Iowa at 6:30 P.M. on Thursday, September 10, 2015, to take action upon the following matters:

1. The reports of officers, directors, and committees; 2. The election of three (3) directors of the Cooperative for a term of three years each; 3. All other business as may legally come before the 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 Committee on Nominations appointed by the Board of Directors of the Cooperative pursuant to the Bylaws.

THREE-YEAR TERM (Three to be Elected)

Joy Evans Travis Harris Alan Janssen Ben Koellner Lyle Moore David Reeves

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 12th day of August, 2015. Joy Evans, Secretary

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Meet Your 2015 Board of Director Nominees

Joy Evans lives at 20528 Nuthatch Avenue, Bloomfield. She has been on the Southern Iowa Electric Cooperative Board of Directors for 39 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 a member of the Davis County Farm Bureau 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 has been on the Southern Iowa Electric Cooperative Board of Directors for 2 years. He and his wife, Tiffany, have three children: Benjamin (19), Daniel (17), and Annika (11). Travis is a 1993 graduate of Truman State University, and holds a Bachelor of Science Degree 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 for

19 years. 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 on the board of the Davis County Community Foundation. Travis and his family are members of Lancaster Christian Church where Travis serves as an elder.

Alan Janssen lives at 22466 Jewel Avenue, Bloomfield. He is a graduate of the University of Illinois with a Bachelor’s Degree in Animal Science and Agricultural Economics. He is owner of JF Company Appraisals and is a Certified General Real Estate Appraiser conducting appraisal assignments across Southern Iowa and Northern Missouri. Alan previously served two terms on the SIEC board and was Board President during the planning and construction of the current facility. During his tenure he received his Board Leadership designation. Alan and his wife Denise, a Registered Dental

Hygienist, operate a commercial cow/calf operation on their land southwest of Bloomfield as well as partnering with some younger producers on additional cattle. They have two grown children and three grandchildren. Alan and Denise have been members of Southern Iowa Electric for the past 38 years.

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Ben Koellner lives at 12301 300th Street, Milton. He and his wife, Meghan, have 3 children: Alex (10), Abby (7), and Andy (3). Ben is a partner with his brothers in the family farm corporation that includes row crops, cattle and trucking. Meghan is a middle school math teacher in the Van Buren Community School District. Ben is a life-long resident of Van Buren County, graduating from Fox Valley High School and Iowa State University. He is a member of the Van Buren County Farm Bureau in which he currently serves as the voting delegate. Ben and Meghan have been members of Southern Iowa

Electric Cooperative for the past 11 years.

Lyle E Moore lives at 27810 195th Street, Bloomfield. He and his wife, Denise, will soon be celebrating their 50th wedding anniversary. The Moore’s have a son of Littleton, Colorado; and a daughter of rural Bloomfield. They also have four grandchildren. Lyle currently works for Davencorp Welding and Fabrication, Inc. in Bloomfield as Sales Manager. His wife Denise operates Denny’s Daycare. Lyle and his wife enjoy square dancing and belong to the Dudes and Dolls Club in Ottumwa. As a couple they are currently the President of the B Square Club in Ottumwa; and also Co-Editors of The Iowa

Square and Round Dance Newsletter. Lyle enjoys square dancing, golfing, and especially fishing with the grandchildren. Lyle and Denise have been members of Southern Iowa Electric Cooperative for 19 years.

David A Reeves lives at 24973 Monarch Trail, Bloomfield. He and his wife, Billie, have 2 sons: Aaron of Bloomfield and Ryan of Kissimmee, Florida. They have 5 grandsons. David and Billie have been members ofSouthern Iowa Electric Cooperative for 33 years. David attended school in Ottumwa, Iowa and Pueblo, Colorado where he graduated in 1965. David and Billie were co-owners of the Wilderness Kingdom Zoo near Floris. David served in the United States Air Force from 1965-1969 of which 1 year was in Vietnam. He also served in Afghanistan in 2003. David retired from the Iowa

Army National Guard in 2007 with 32 years of service of which 14 ½ years were full time. He is currently the Director of Veterans Affairs part time for Davis County since January of 2009. David and his wife enjoy traveling, especially to Florida, attending grandsons’ games and working on their 43 acre farm. David is the Adjutant of the American Legion in Bloomfield, a service officer and member of the Vietnam Veterans Ottumwa, Disabled American Veterans Ottumwa and a life member of the Veterans of Foreign Wars Ottumwa.

Southern Iowa Electric Cooperative, Inc.Balance Sheets

Assets

Net Plant

Total Current Assets

Total Assets

Equities

Total Equities

Liabilities

Total Current Liabilities

Total Liabilities

Total Equities & Liabilities

pg 6

Current liabilities

Utility Plant

Other Assets

Current Assets

Other Liabilities

Southern Iowa Electric Cooperative, Inc.Statements of Revenues, Expense and Patronage Capital

Operating Revenue

Total Operating RevenuesOperating Expenses

Total Operating Expenses

Total Cost of Electric ServiceOperating Margins

Non-Operating Margins

Patronage Capital & Margins

Statements of Patronage Capital

pg 7

The Chairman introduced

The CEO/Manager introduced Bruce

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SOUTHERN IOWA ELECTRIC COOPERATIVE, INC. ANNUAL MEETING OF MEMBERS

September 4, 2014

The 75th Annual Meeting of the Members of Southern Iowa Electric Cooperative, Inc. was held at the Cooperative’s office building at 22458 Highway 2 in Bloomfield, Iowa beginning at 6:30 P.M. on September 4, 2014.

The meeting was called to order by Darrell Downing, President of the Cooperative, who presided. Joy Evans, Secretary of the Cooperative, acted as Secretary of the meeting and kept the minutes thereof.

Pastor Kramer Smith of the Stiles Christian Church gave an invocation. Chairman Downing invited the members to stand while the National Anthem was played.

CEO/Manager Mark Aeilts who welcomed the members and a video was shown with a message from NRECA CEO Joann Emerson.

A video entitled "Bob Marshall Comes Home" was shown.

The CEO/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 and gave special recognition to the members of the armed forces among the attendees.

The CEO/Manager recognized the Advisory Committee Touchstone and asked the attendees to please give a round of applause for their efforts on the members' behalf.

Nuzum of the Iowa Area Development

Group (IADG) who recognized the Cooperative for its economic development efforts and presented the Cooperative with the IADG Economic Impact Award.

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

The Secretary, Joy Evans, 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 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 5, 2013 had been mailed to the members with the Notice of the Meeting, and she 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, David Yahnke, announced that printed copies of the Annual Financial Report of the Cooperative had been distributed to each of the members, and he 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

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was ordered to be filed in the records of the Cooperative.

The Chairman introduced Attorney 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: Duane Bales, Don Farland, Max Leyda, David Swaim, Doug Turner and Charles Warner. Attorney Puckett next introduced Duane Bales, Chairman of the Committee, who presented the Nominating Committee Report, indicating that the following members had been nominated to serve as directors, with three to be elected for three year terms:

Trent Gregory Robert Hamersley David Hopkins Robert Orman Fred Zeitler Earl Trachsel

Attorney Puckett noted that the Board had recommended an Amendment to the Articles of Incorporation, which Amendment would add a new dispute resolution provision. He explained the Amendment and offered to answer any questions.

Attorney Puckett announced that Cooperative members Marietta Huggins, Karen Cantrell, Phyllis Ward, Ernie Birchmier and Marvin Strait had been appointed as Inspectors of Election.

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 Drew Wetterich, Lydia Heald, Andrew Milder and Dillon Newton were the 2014 Scholarship winners.

The Chairman announced that Kiley Vinyard and Jacinta Wenke 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 report on their trip to

Washington D.C. President Downing presented his

annual report. He encouraged the members to look to the Cooperative Staff as their energy experts.

The Chairman introduced CEO/Manager Mark Aeilts for his report on the operation of the Cooperative.

CEO/Manager Aeilts introduced Doug Aeilts, CEO of Northeast Missouri Electric Power Cooperative, who gave a report on power supply.

Attorney Puckett called for any old or new business. No additional business came before the meeting.

The Certificate of Inspectors of Balloting concerning the Amendment was presented and read, indicating that 87.8% of the members voting had voted in favor of the Amendment. It was declared that the Amendment had received the requisite support for adoption and the Cooperative Articles of Incorporation would therefore be amended as follows:

Amend the Articles of Incorporation by adopting a new Article XIII, and renumbering existing Article XIII as XIV. The new Article XIII will include a provision setting forth a process of handling disputes between the Cooperative and its members, as follows:

Article XIII Dispute Resolution

The Cooperative shall attempt to resolve any claim or dispute which may arise between the Cooperative and a member, former member, or customer who has received electric service in a good faith manner. In resolving such disputes, the Cooperative shall give consideration to: (1) applicable laws; (2) rules and regulations imposed by state and federal agencies; (3) these Articles of Incorporation; (4) the Cooperative’s bylaws, policies, practices, plans,

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and procedures; (5) industry standards; and (6) the individual facts and circumstances regarding the claim or dispute.

If a member, former member, or customer who has received electric service is not satisfied with the Cooperative’s resolution of the claim or dispute, all matters subject to the jurisdiction of the Iowa Utilities Board shall be resolved by the Iowa Utilities Board or, if and when appropriate, the applicable regulatory body with jurisdiction over the Cooperative and the matter.

All other claims and disputes shall, at the request of either the Cooperative or the member, former member, or customer, who has received electric service, first be submitted to mediation conducted by an impartial mediator agreed to by the parties. In the event the claim or dispute is not resolved through mediation, then such shall, at the request of either the Cooperative or the member, former member, or customer who has received electric service, be submitted to binding arbitration to be conducted in accordance with the policies adopted by the Board of Directors of the Cooperative. In absence of such policies, or in the event such policies are incomplete, the provisions of Iowa Code 679A (Arbitration), as it may be amended from time to time, shall apply to the extent it is not inconsistent with the policies adopted by the Cooperative.

Notwithstanding the foregoing, the Cooperative reserves the right to pursue collection of a debt owed by any member, former member or

customer who has received electric service through other means, including but not limited to use of collection agency, small claims court, and other applicable courts. Further, any claim where the amount in controversy is less than the small claims jurisdictional amount may be resolved without utilizing the alternate dispute resolution procedures set forth in the Article.

Every member, by becoming or continuing to be a member, agrees to the foregoing, and agrees to be bound by the Bylaws of the Cooperative. The Bylaws and the Articles of Incorporation constitute an agreement between the Cooperative and the members.

Attorney Puckett presented the Certificate of the Inspectors of Election certifying the following three 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)

Fred Zeitler David Hopkins Earl Trachsel*

* Declared winner after following procedure related to tie-votes.

Prizes were awarded by lot during the meeting and entertainment was provided by Bridge City Country before the meeting. A meal was provided by Bailey's BBQ Barn and blood pressure checks were provided by Davis County Public Health.

Joy Evans, Secretary

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2015 Iowa Rural Electric Youth TourSophie Rotole and Dane Stevenson recently participated in the Electric Cooperative Youth Tour program in Washington, D.C. sponsored by Southern Iowa Electric Cooperative. Sophie, a junior at Davis County High School, is the daughter of David and Jennifer Rotole of Bloomfield. Dane, also a junior at Davis County High School, is the son of Brian and Jan Stevenson of Bloomfield. Sophie and Dane spent six days on this adventure, along with 40 other high school students 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. Youth Tour brings together some 1,600 teens from 43 states for a once-in-a-lifetime opportunity culminating in Washington, D.C. Students dance on a boat cruise down the Potomac River and see the roots of American history. They met their elected representatives in the U.S. House and Senate, and learn about electric co-ops as well as grassroots political advocacy. They live in awfully close quarters for up to a week and are given a small taste of freedom and independence. They sleep a little and talk a lot!

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 50 years.

Sophie and Dane had a great time on their all-expense paid trip to our Nation’s Capital. Meeting with students from other states, NRECA staff, and visiting all the memorials and museums was truly a once-in-a-lifetime trip. Sophie and Dane will be at the Annual Meeting in September to share their experiences with all of us!

Since 1964, the nation’s cooperative electric utilities have sponsored more than 50,000 high school sophomores, juniors and seniors for visits to their U.S. congressional delegations, energy and grassroots government education sessions, and sightseeing in Washington D.C. NRECA is the national service organizationrepresenting the nation’s more than 900 consumer-owned, not-for-profit electric cooperatives, which provide electric service to 42 million people in 47 states.

For more information on how you can participate in SIEC’s Youth Tour program contact Lori McAllister at 800-607-2027 or go to our website at www.sie.coop.

Sophie Rotole Dane Stevenson

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SIEC Awards Three $2000 Scholarships

Southern Iowa Electric Cooperative recently awarded three $2000 scholarships to area high school seniors. The winners of the 2015 Southern Iowa Electric Cooperative Academic Scholarships are: Tyler Albert, a graduate of Cardinal High School, who is the son of Richard & Michelle Albert of Eldon. Tyler is planning on attending William Penn University to study Engineering Technology; Garrett Saunders, a graduate of Van Buren County High School, who is the son of Deric & Dixie Saunders of Bonaparte. Garrett is planning on attending Central College or Truman University to study Biology/Pre-Medical; and Justin Vollmer, a graduate of Davis County High School, who is the son of Joseph & Patricia Vollmer of Bloomfield. Justin is planning on attending the University of Northern Iowa to study Manufacturing Technology-Design.

In order to have been considered for the academic scholarships, students must be high school seniors. The student or their parent/guardian must be members of Southern Iowa Electric Cooperative, the student must have been accepted by an accredited two- or four-year college, university or vocational-technical school in the fall of 2015, 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 2015 Southern Iowa Electric Cooperative Scholarships. We wish you all well in your future endeavors.

Tyler Albert Garrett Saunders Justin Vollmer