Benefits of Utilizing an Advance Pay Program ‘Not just a new way of billing, but a new way of living’

Horry Electric Cooperative, Inc. primarily serves on the western side of the Intracoastal Waterway. Neighboring utilities Members53,520 Meters67, 993 Distribution line4,950 miles Substations24 Overhead distribution1, Underground distribution3, Residential86.4% System Details

SERVICE AREA MAP Horry Electric Cooperative, Inc. primarily serves on the western side of the Intracoastal Waterway. Neighboring utilities include Santee Cooper, Progress Energy and Brunswick Electric Membership Corporation. Horry Electric has franchise agreements with the City of Loris, the City of Myrtle Beach, the City of North Myrtle Beach and the Town of Aynor.

Overview Instead of paying for electricity after it is already used, an Advance Pay account is set up so the member pays in advance of using electricity. As electricity is used daily, their credit balance is reduced until either the balance is exhausted or additional payments are added to their balance. If a credit balance is exhausted, service is disconnected until a credit balance is restored As electricity is used daily, their credit balance is reduced until either the balance is exhausted or additional payments are added to their balance. If a credit balance is exhausted, service is disconnected until a credit balance is restored.

Benefits to Participants – Smaller payments – Customize a payment schedule – Make payments at their convenience – Consumer awareness promotes conservation – No bills or late fees – No disconnect or reconnect fees – Avoid paying high deposits – Maintain service with existing debt

Account Information & Payments There are many convenient options for members to review their Advance Pay account information and make payments. MyEnergy Online member portal MyEnergy Online member portal Automated phone system Automated phone system Preset alerts via phone, text, Preset alerts via phone, text, Horry Electric Offices Horry Electric Offices Multiple bank locations Multiple bank locations

Target Audience Primary market – new members with credit flagged for high deposits Secondary market – members in delinquent status with deposit that will cover overdue balance Other opportunities – Rental properties – All single-phase residential members

Current Stats Active accounts: 4,697 Active accounts: 4,697 Accounts with Debt Recovery: 53 Accounts with Debt Recovery: 53 Average Debt Recovery Balance: $250 Average Debt Recovery Balance: $250 Average payment on prepay $47.30 from 1/20-2/18 Average payment on prepay $47.30 from 1/20-2/18 Average prepay account balance for same dates -$27.00 Average prepay account balance for same dates -$27.00 Total number of payments for same dates 22,629 Total number of payments for same dates 22,629 Average payment to debt management for same dates $16.25 Average payment to debt management for same dates $16.25 HEC has collected $24, in debt management since 10/2013 Total Debt Reduction $165,687.75

MEMBER SUCCESS BACKGROUND OF MEMBER X Accrued debt of $1,700 on standard account. Accrued debt of $1,700 on standard account. Unemployed and on disability Unemployed and on disability Service was subject to disconnect and Co-op was looking at writing off $1,700 bad debt Service was subject to disconnect and Co-op was looking at writing off $1,700 bad debt Member called political officials, who begged us to reconnect knowing the debt could not be paid Member called political officials, who begged us to reconnect knowing the debt could not be paid

MEMBER SUCCESS MEMBER X GOES ON ADVANCE PAY MARCH 3, 2011 Debt rolled into the debt recovery system Debt rolled into the debt recovery system 30% of each payment went toward debt 30% of each payment went toward debt Debt paid in full by December 22, 2011 Debt paid in full by December 22, 2011 Member moved on January 18, 2012 only owing $ Member moved on January 18, 2012 only owing $100.36

MEMBER SUCCESS SUMMARY Original debt: $1, Original debt: $1, Final debt: $ Final debt: $ Total debt savings of $1, Total debt savings of $1, Member was able to maintain service Member was able to maintain service

Safety &Revenue Security Utilization of remote disconnect/reconnect switches. – Reduces exposure of line workers to the hazards of disconnection. – Reduce cost of truck time for disconnection and reconnection. – Allows for after hours reconnections without the hazards of night time work. – Allows for remote monitoring of switch status. Essentially this equipment can be the utility’s eyes in the field. – Fast 24/7 reconnects

YEARPERCENTAGE REDUCTION % % % % Theft Reduction In 2009, we had 102 cases of members reconnecting themselves after being disconnected for non-payment. AFTER IMPLEMENTATION OF THE PROGRAM 83% REDUCTION IN THEFT

In 2010, we had 14,213 cutoffs sent in the field AFTER IMPLEMENTATION OF THE PROGRAM 28.5% Reduction Reduction in Field Collections

Negatives It’s not for everyone Reduces field interaction with members Explanations about how it works is sometimes difficult for members to understand Interface between CIS and AMI systems can be difficult Selling/convincing the employees of your organization that it’s a good program

Marketing Started Slow Started Slow – Pilot program June 2010-September 2010 – Went live October 2010 – Hit primary market first, then moved to other opportunities – We now have 4700 Advance Pay accounts Methodology Methodology – South Carolina Living – Member Service Representatives – Brochures/Signage – Horryelectric.com – Social Media

Program Growth YEAR (AS OF DECEMBER 31)NUMBER OF ACCOUNTS /18/144697

Discussion/Questions Jodi Braziel Horry Electric Cooperative, Inc