Sixty seven members and their families attended Empire's June 2, 2011 annual meeting in Monticello, Utah. All members received a gift basket from Adobe Milling and were able to sample many different hors d'oeuvres from Monticello, Utah based Palmer Catering. Attendees had the opportunity to visit with exhibitors from Tri-State Generation & Transmission and from Four Corners Office For Resource Efficiency (4CORE), as well as viewing an Empire Electric safety presentation booth.

Monticello Mayor Doug Allen provided a warm welcome to the attendees and invited everyone to visit the new Hide Out golf course in Monticello.

President Bauer discussed Empire's financial performance and reported that Empire met all requirements of the Rural Utilities Service. Bauer discussed Empire's safety program and said he appreciated the efforts of all employees and that Empire has had no loss time accidents in the last two years. He discussed Empire's reliability and that Empire's customer had power available for 99.99 percent of the time while upgrading and replacing old transmission lines. He mentioned the need for the new operations center and also the profitability of FastTrack Communications, jointly owned by Empire and La Plata Electric. Bauer mentioned renewables and efficiency conservation and commended Tri-State Generation and Transmission for their continued diligence. Bauer thanked Empire's member-owners for their support of Empire Electric.

Vice President and Acting Secretary/Treasurer David Sitton reported on the solid financial performance of the cooperative highlighting key financial and accounting ratios indicating the financial health of the cooperative.

Empire's general counsel, Barry Spear, discussed the following legal issues:

1. An update on a litigation matter involving approximately 40 acres Empire purchased with the intent of relocating the operations center. Empire won the case at the trial court level but the members appealed. The Colorado Court of Appeals still has the matter under advisement, is reviewing the briefs and has docketed the matter for oral argument in July.
2. A case before the Colorado Public Utilities Commission (PUC) that was filed almost three years ago by a former member against Empire. The member complained about lack of safe service, failure of Empire to properly maintain its equipment, deceptive billing practices and discrimination. The matter was defended by Empire and more than a year ago, the Administration Law Judge recommended for dismissal of the complaint filed by the member. The member requested reconsideration and the PUC sent the matter back to the ALJ. We are still waiting for a ruling from the PUC.
3. Assistance was provided in developing amendments to cooperatives policies necessary as a result of passage of Colorado's HB 1098 last year. It should be noted that many of the changes required by the statue had been in place for Empire, but the amendments to the policies make sure Empire is in full compliance.
4. Spear's firm also provided assistance on reviewing the contracts necessary to transfer the CO2 transmission lines to Tri-State and acquiring property for new projects, as well as different contracts dealing with solar facilities with Skanska and to allow members to buy solar panels at Empire's own solar garden.
5. Spear also attended board meetings, reviewed contracts, loan documents, bylaw and policies and assisted with easement interpretation.

Manager Stephens reported that Empire is: in great financial shape; operates a safe and reliable electric system, has a viable conservation and efficiency program; and has developed a reasonable renewable energy program. Empire's wholesale power provider is meeting their contractual responsibility to provide adequate and reliable electricity, and the members are satisfied with the performance of the cooperative according to a member survey Empire conducted in 2010. Stephens discussed and presented a PowerPoint on the highlights of the member and small commercial surveys.

Stephens also discussed the development of Empire's "solar garden" where a member can lease a single panel or more and receive credit on their electric bill. Members who live in mobile homes, or apartments or who rent or have trees or other obstacles blocking their southern exposure can get involved with their own solar photo voltaic renewable energy project and not have to install their own system. Empire will perform operations, maintenance and replacement function rather then the member.

Stephens discussed the many issues the board deals with and said that they continue to be inundated with an ever-changing regulatory environment. They serve on committees, deal with political issues, rate issues and growth issues of Empire's wholesale power provider and they spend time reviewing what is transpiring in the entire electric utility industry.

Sherryl Caikowski, senior vice president of corporate services at Tri-State Generation & Transmission, pointed out that Tri-State continues to refund capital credits to their member-systems and discussed four challenges that Tri-State is facing while attempting to hold wholesale electric rates stable. These challenges are:

• Building generation
• The increase in environmental regulations
• Difficulty in building infrastructure (transmission lines)
• Developing and refining the rate approaches to benefit the member systems

Vice President David Sitton and the scholarship committee awarded scholarships to students attending for the 5-area high schools Empire serves as well as several adult scholarships.

Attorney Spear announced the election results as follows:

Director Election Results:

Amendment 1: Adoption of Colorado HB 10-1098 Mandates:

Amendment 2: Stop Issuing Member Certificates, cease board of director's requirements to approve memberships & reduce cut-off date from 60 days to 5 days:

Amendment 3: Membership Quorum - eliminates the quorum requirement for voting if the total number of mail-in ballots and those present at the meeting is at least 50 members:

Amendment 4: Order of Business - a list of agenda items in the bylaws is not necessary for conducting membership business at any membership meeting. The agenda and the order of business are properly established by the elected board of directors:

Amendment 5: Election of Directors - Remove a section that is covered elsewhere in the bylaws:

Amendment 6: Officers - these revisions will clarify duties and practices of the officers of the board:

Amendment 7: Rather than go through unnecessary expense to obtain member approval to amend Empire's bylaws or articles of incorporation every time a local state or federal law is changed, it is logical to authorize the board of directors to do so:

General prize drawing followed.

Meeting adjourned at 8:00 p.m.