As Mountain Parks has just implemented a 10% rate increase, effective on bills issued beginning January 1, 2008, I’d like to provide to our members the most accurate information available on what is happening to energy costs.

Mountain Parks Electric Board of Directors considers electric rate alternatives very deliberately and with concern for our members; we are all in this together, as each of us at MPEI pays the same rates as our members.

The main driver of our costs is the price of wholesale power from Tri-State Generation & Transmission Association, also a cooperative, which supplies 44 distribution cooperatives like Mountain Parks Electric. We have experienced rate increases in each of the past 4 years during which I have been general manager; total of these has been 41%. MPE’s Board has tried to “hold the line” to the extent possible, keeping the increase to our members during the same 4 years to 35.6%.

This is not an easy task --- for example, in the year 2007 just finished, MPE has a 10% rate increase --- while the average wholesale cost of energy went up 16.4% over 2006 costs!

What is our supplier, Tri-State Generation & Transmission Association (TSG&T) doing about this? They are working on several fronts:

• Short of capacity, TSG&T has been seeking to build a new 700 MW base load coal-fired generating plant with Sunflower Electric Power’s Holcombe Expansion Project; the October 18, 2007 ruling by Kansas Department of Health & Environment denying the air permit (despite best available control technology) has been appealed to the Kansas Supreme Court seeking a determination that the secretary’s decision was unfounded and unlawful under both Kansas and U.S. law. This project may not become available until after 2013.
  
  
• To secure more near-term generation to cover shortfalls, in July, 2007 TSG&T requested competitive bids on shorter lead-time resources; TSG&T staff are finalizing arrangements for this power and energy.
  
  
• In December, a request for proposal for renewable resources was issued, with bids due on March 26, 2008 --- in this, TSG&T seeks renewable energy deliveries of at least 150 million KWH’s – roughly the equivalent of a 50 million watt wind farm at annual capacity factor of 35%.The technologies which will be considered include: wind, solar, hydro, and other renewable forms of “green” energy. The green power must be available by 2011.
  
  
• In 2007 TSG&T began giving away and offering rebates to its co-op member systems on compact fluorescent lamps, (CFL’s) which use 70% less energy than in candescent lamps. MPE ranks 2 nd among Tri-States 44 members in promoting CFL’s representing 19,000 CFL’s of the 100,000 that TSG&T has distributed.
  
  
• With the Electric Power Research Institute and several western utilities, TSG&T is studying the feasibility of a concentrated solar power (CSP) plant in New Mexico; unlike conventional flat plate photovoltaic panels, CSP uses reflectors to focus the sun’s heat to boil water and drive a steam turbine generator.

Through these various alternatives, TSG&T and its members like Mountain Parks, continue to strive to find clean, reliable, and affordable energy resources for our customers.

But let me clear: the electric industry and the environmental community agree –renewable resources will cost the consumer more -- the struggle with global warming will require everyone to pay more for energy!

As the U.S. and Colorado congresses move toward legislation confronting climate change, one serious question which remains unanswered is: How much are we, as consumers, willing to pay? So far, higher electric bills have not been a big part of the climate change discussions.

The influential “New York Times” recently stated that lawmakers have failed to educate their consumers on “an unpleasant and inescapable truth: any serious effort to fight global warning will require everyone to pay more for energy”.

We’ve already seen it at the gasoline pump, in natural gas, and heating oil prices --- and in electricity. Shortages, regulations, and restrictions of supply – amid every growing demands worldwide – have already driven and will continue to drive up prices. The fundamental laws of economics are not altered by the legislative process.

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