It falls under my responsibility to communicate to our members on an electric rate increase which we anticipate will be effective on all bills issued after January 1, 2007.

The primary cause for this rate increase is the fact that our power supplier, Tri-State Generation & Transmission Association of Westminster, Colorado will increase the cost of wholesale power by 11.8% effective 1/1/07. Like Mountain Parks Electric, Tri-State G & T is a cooperative, governed by a 44 member board representing the 44 distribution cooperatives for which they generate and transmit power.

Tri-State G & T faces several significant challenges:

• Loads already exceed their generating capacity, and are growing by 8% per year.
• Spot market purchases to cover shortages cost $68/mWh (megawatt hour, or million watt hours) while they sell to us at $48/mWh.
• Three new coal fired generating plants will be built at a cost of over $5 billion.
• 1,000 miles of new transmission will require investment of $3 billion.
• Costs for all forms of energy – natural gas, oil, gasoline and coal have risen dramatically.

All of these challenges will force Tri-State to raise our wholesale power costs over at least the next three years. In later years, when they have adequate supply to meet the demand, our rates should level out and stabilize.

At the Mountain Parks Electric local distribution cooperative level, almost everything we use to build and maintain the electric system has gone up due to global demands:

• Transformer prices are up 40%.
• Copper wire which cost $1 per pound in 2004 went to $3.61 per pound in 2006.
• Wood pole prices increased 40%.

I’m sure I don’t need to tell our members what’s happened to gasoline and diesel at the pump!

If there is anything good about this, it is the fact that we are all in it together. When our Board of Directors, all local citizens, sets rates, the rate increase goes on their bills as well as those of all of the MPEI employees.

Our Board accepts and listens to input from the members regularly at monthly meetings. Recently, they heard from members concerned about the new “peak” hours affecting their electric thermal storage (ETS) heating systems. The Board listened, and came up with a plan to allow those customers to use energy during peak hours, provided that they pay their fair share for the higher cost of peak power.

At its October meeting, the MPEI Board provided direction to management staff on retail rate structures for 2007. While the rates are not finalized and approved yet, I can give you a general idea of what you may expect in 2007:

Residential

• Revenues will increase by about 11.5%.
• The 150 kWh included in the $25 per month service availability will be eliminated (members told us they did not want to pay for energy that some may not use).
• Cost per kWh will be reduced from 7.9¢ per kWh to7.6¢ per kWh in the energy portion of the bill.
• The average consumer of 750 kWh per month will see an increase from $72.40 per month to $82.00 per month (an increase of $9.60 per month, or 13%).

Commercial

• Revenues will increase by 4.4% on average (due to higher levels of usage).
• Commercial service availability and energy charges will be the same as for the residential class.

Time of Use

• ETS and other time sensitive customers will have a choice of two rates.
• Those who choose to have more “off-peak” hours available on a year-round basis will pay slightly more than those who choose seasonal (summer vs. winter) rates.

Small Power

• Revenues will increase by 10.7% on average.

Large Power

• Revenues will increase by 10.9% on average.

Peak Shaving Loads

• Will experience significant increases in cost for loads during peak hours; they have been advised individually of the order of magnitude of their expected rate increases.

What can we all do to try to minimize the effects of rate increases (as said earlier, we are in this together!)? Use energy wisely; especially avoiding the “peak” hours:

WinterPeak hours: (October to March)

5:30 a.m. – noon

4:30 p.m. - 7:00 a.m.

SummerPeak Hours: (April to September)

7:00 a.m. – 10:00 p.m.

If you can void using energy during these hours, it will save on power costs.

Replace the incandescent lights which you leave “on” the most, with efficient compact fluorescent lamps (CFLs)—the CFLs reduce energy consumed for lighting by 70%!

The Edison Electric Institute (EEI) on 11/6/06 reported average residential electricity prices will rise to 10.6¢ per kWh in 2007. At Mountain Parks Electric, our average will be approximately 11.1¢ per kWh, which will keep us in the “middle of the park” of rates charged by over 40 utilities in Colorado.

In the 20 years from 1985 to 2005, the Consumer Price Index has increased by 82% according to EEI, while electricity increased only 27% during this time. Electricity, in comparison to other forms of energy, is a good value and has been for a long time.

At Mountain Parks Electric, our challenge and commitment is to continue delivering electricity at the lowest possible price to all of you, our member owners.

Joe Pandy

General Manager

Main Office - 321 West Agate Avenue, PO Box 170, Granby, Colorado 80446-0170 (970) 887-3378 - FAX (970) 887-3996 Denver Metro area - (303) 377-2525 email us    site map