MPE's Letter to the Editor: Our democratic process, regulation, transparency and fiber-optic backbone investment
I would like to explain MPE’s democratic process, regulation, transparency, and enumerate the information that is made available to all of our member-consumers and to the public at large.
MPE’s Board of Directors consists of seven people. They are all local residents, living in and representing distinct areas throughout our service area – Fraser/Winter Park, Granby, Grand Lake, Kremmling, Hot Sulphur Springs and Walden. Like you, they are all member-consumers. They all have a local residence and pay a Mountain Parks Electric bill. They are chosen through an election process that is open to all of MPE’s member-consumers. MPE’s Board consists of Peggy Smith, Dick Zieff, Liz McIntyre, Jeff Hauck, Justin Fosha, Carl Trick and Mark Volt. Whether setting electric rates or approving a fiber-optic backbone to improve our service to you, they govern MPE while keeping in mind the best interest of the membership that they were elected by and represent.
Mountain Parks Electric is not regulated by the Colorado Public Utilities Commission (PUC) to the same extent that investor-owned utilities are. The PUC approves electric rates established by for-profit, investor-owned utilities (like Xcel Energy and Black Hills Energy) that earn money for their investors through electric sales. The PUC does not have rate regulation authority over electric cooperatives like MPE. Due to differences in population density and terrain, Xcel Energy and Black Hills Energy (BHE) earn three to five times the revenue MPE does for each mile of service area. This explains why MPE’s cost to serve each customer (collected through the monthly service charge) is higher than urban utilities. The fact is, it costs more to provide electric service in the mountains, even when it is delivered and sold by a not-for-profit utility like MPE.
Mountain Parks Electric is member-owned, not investor-owned like Xcel and BHE. Its governance is exercised by democratically-elected consumers who pay a MPE electric bill. Its board of directors has a vested interest in setting fair and equitable rates. Electric rates that they establish affect the locality in which they live and also affect them personally. It is this democratically elected board that regulates MPE’s rates. Our directors are not establishing electric rates that earn money for investors. If they were, oversight from a disinterested party like the PUC would certainly be justified. Instead, our directors are simply attempting to cover MPE’s operating costs through our electric rate structure with a margin for contingencies (like lower-than-expected energy sales due to an unusually warm winter). Margins we earn from electric sales are later returned to MPE’s member-consumers.
MPE is transparent in much of its business operations.
It is transparent in how it conducts board meetings. At monthly board meetings, during the public comment period, MPE’s member-consumers can address the board directly with any concern about their electric service or the board’s governance. At monthly board meetings, the public can also observe the board’s discussion and deliberation on issues affecting MPE, and observe how the board votes on policy and budgeting issues.
MPE member-consumers can also contact their local board representative directly, outside of monthly board meetings, to discuss their concerns.
MPE is also transparent by conducting an annual meeting open to all members – once a year (May 11th this year) at its Granby headquarters, where member-consumers can directly ask (or state their concerns to) the MPE Board of Directors and General Manager.
Additionally, MPE is transparent in providing various financial and operational information to its members and to the general public. This information is available upon request (and some of it is available on our web site at www.mpei.com). This includes MPE’s Bylaws, our Annual Report, Tariffs, Rural Utilities Service’s Form 7 (Income Statement and Balance Sheet), Form 990, our independent auditor’s report and our Board Meeting Agendas and Board Minutes.
As with every organization, even a not-for-profit utility, not all information is made public. This is because some information is proprietary in nature. Other information, like MPE’s recent Cost-of-Service Study (which is one tool MPE uses in evaluating rate adjustments), is business-sensitive. The reason that business-sensitive information is not released to the public is because it includes confidential information such as trade secrets, acquisition plans, financial information, customer information, etc.
Fiber-Optic Backbone Investment
Lastly, MPE is continuing to pursue its fiber-optic backbone investment. MPE is making this investment to (1) improve internal communications, (2) to better manage the electric grid, and (3) to attract and open the door for third-party broadband providers to come into our area and provide high-speed internet service. This is an investment in the future, at a time when MPE’s data needs continue to grow and an increasing number of smart-grid technologies that allow utilities to control power costs, both for MPE and MPE’s membership, are coming to the market. Some of these technologies will require broadband/Wi-Fi capabilities. This investment is comparable to building an electric substation. You don’t build a substation to serve only existing electric customers. You build it to serve existing and projected customers for the future. That is our plan in building the fiber-optic backbone.
We welcome your feedback and participation in our member-owned and -governed electric cooperative. Please contact us if you would like to discuss these issues further. Or, you can simply provide feedback by participating in our online survey at www.mpei.com/content/mpe-member-survey.
Tom Sifers, MPE General Manager
firstname.lastname@example.org, (970) 887-3378