SDCEA New Employee Orientation

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Colorado Rural Electric Operations Group
Conference

• Paul A. Erickson, Chief Executive Officer
• Sangre De Cristo Electric

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WELCOME!

• Enjoy your stay
• Hope its as fun as it is informative
• What happens in BV stays in BV
• Behave!
• Three topics
• Co-op history
• Utility differences
• Politics

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History

• Urban electrification from early 1900s into the
  1930s
• IOUs cherry-picked the urban concentrations
• Rural America was left in the dark
• Dust bowl, great depression
• Champions arose

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REA Formed

• 1933 New Deal
• 1933 TVA
• May 2,1935 Executive Order establishing REA
• Rural Electrification Act May 20, 1936
• REA became part of USDA July 1, 1939
• SDCEA incorporated in 1940
• Incorporated in 1940
• Built first lines in 1942 14 miles

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Types of Electric Utilities

• Investor-owned
• Municipal approximately 2,500
• Cooperative 930
• 864 Distribution Cooperatives
• 66 Generation Transmission Cooperatives

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Investor-owned Utilities

• Owned by shareholders
• Primary goal is return on investment for
  shareholders
• Regulated under Colorado Public Utilities
  Commission (PUC)

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Municipal Utilities

• Or more generically referred to as Public Power
• Owned by city, political subdivision or
  government entity
• Usually backed with the full faith and credit of
  the government entity
• Generally subsidize city operations

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Cooperative

• Private corporation
• Nonprofit corporation
• IRS 501 c (12)
• Locally owned
• Owned by those we serve

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Geographical Coverage of Co-ops
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Network

• Cooperation among cooperatives
• Federate on a state, regional and national basis
• REA -gt RUS (1993/94) -gt USDA Rural Development
• NRECA, Federated, NRTC, etc.
• GT
• CREA (38 statewide associations)

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Americas 930 Co-ops Serving 36 million in 47
states
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Colorados 22 Co-ops
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SDCEA

• 2500 mile territory
• 1600 miles today, half overhead and half URD
• 11,800 meters
• now adding several hundred meters per year

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Political Climate

• Much happening state and nationally
• Activism, Political Agendas
• Numerous bills before legislature
• Bills before congress

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Colorado Bills

• The carbon scarlet letter bill
• Would have required monthly carbon footprint on
  all consumer electric bills
• Sponsor conceded that it would not be accurate
• We killed it

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Colorado Bills

• Third party financing of renewables bill
• Would have required all co-ops to pay third
  parties to erect solar on largest loads up to
  125 of load.
• Legislators thought this was a good idea.
• We sought and got an exclusion
• Bill will pass

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Colorado Bills

• Solar on schools
• Will allow schools to finance solar projects for
  their energy needs
• Will allow utilities to be involved
• We are fighting for strong energy efficiency
  requirement prior to school being able to do the
  solar project
• Bill will pass

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Colorado Bills

• IREA Energy Efficiency Bill
• Would require only co-ops with over 100,000
  meters to comply
• Would have spending and performance requirements,
  actually requires load and sales reductions.
  Impossible to meet.
• Will kill IREA
• Will likely apply to us in future
• We are fighting

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Colorado Bills

• Scarlet Letter resurrected
• New bill will require that we notify each
  consumer semi-annually of our fuel mix.
• For some reason the Legislature thinks this will
  fire up consumers due to fossil mix/low
  renewable mix
• Bill will likely pass

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Colorado Bills

• PUC Tri-State Docket
• PUC is autonomous arm of government, appointed by
  Governor
• TSGT is not regulated by PUC
• PUC is investigating regulating TSGT resource
  planning.
• By extension that is regulating us, contrary to
  state law (1983).
• We are fighting it.

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CARBON

• Cap and trade
• Carbon tax
• Rates will double
• Congress trying to sneak it in under
  reconciliation process.

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EFCA

• The Employee Free Choice Act
• Would eliminate secret ballot
• If 50 1 employees simply sign a card, union is
  in.
• No vote, no election, allows union folks to go to
  employees homes
• Government forces two year contract if none can
  be reached through negotiations.

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QUESTIONS?
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• THANK YOU!
• Have a great meeting