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POWDER RIVER ENERGY CORPORATION

PRECorp News M AY 2 0 1 3

Safety around power lines requires constant vigilance By Tim Velder, PRECorp Marketing and Communications Although you don’t see the actual electricity flowing through the line, you could certainly feel it if you have an accidental encounter with one. Safety is the top priority when PRECorp delivers power to its customers. Our System Operations team completes many hours of safety training every year to ensure constant attention is paid to the high-voltage systems we maintain. These voltages can not only cause injury, they can take a life. Our line crews and other operations personnel know the proper procedures when dealing with maintenance, construction, and repair of distribution lines. However, safety concerns stretch beyond the immediate tasks of climbing poles and restoring power. We must consider safety in all aspects of our day.

Our employees often encounter situations of accidental and random events impacting power facilities. People have accidentally driven vehicles and large equipment into power poles. Some-

DANGER Hazardous voltage

Will shock, burn, or cause death.

Keep Away! Keep Alert! times drivers underestimate the height of their vehicle and become tangled in power lines. Diggers sometimes discover too late they have hit power cables buried underground.

It’s not just people. Animals and insects are also in the picture. These creatures find ideal hangouts on our power lines, cross arms, insulators, and other attachments. Bugs hide in the tight spaces in the guards and insulators, while birds try to root them out. The resulting electrocutions for the predators can knock out power or cause a fire. Trees or branches tend to grow quickly into our lines and keeping trees trimmed and away from the poles and power lines takes regular maintenance. Fires start when lightning hits a pole, or wind slaps power lines together. It doesn’t take much of a spark on dry grass or timber for high winds to push a fire several miles before fire crews can catch up to it. PRECorp’s maintenance crews are working to replace weather-damaged

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In This Issue Regular business: 1-800-442-3630 • Report an outage: 1-888-391-6220 www.precorp.coop

Nominations sought for board of directors

PRECorp vehicles up for auction on eBay

New technology could spark CBM rebound

Help us report vandalsm


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PRECORP NEWS

Safety...

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equipment, improve outdated equipment, and install new updated equipment. We are always making improvements to decrease the number and frequency of avoidable outages involving our lines. Are there some hazards around power services to your residence or business that could result in a tragedy? Here are a few things to keep in mind when you notice hazards on your property: •

Do not attach anything to a power pole. Nails, tacks, staples, wires, satellite dishes, deer stands, basketball hoops, and other items, create immediate hazards for you and our crews if they need to respond to an outage.

Be aware of clearances with your vehicles and equipment. Look all around you to make sure you aren’t working too close to a pole or overhead line. A few seconds to walk around your vehicle can save you the aggravation of an accident or power outage.

Do not pile items beneath power lines.

Call 1-800-849-2476 (One-Call of Wyoming) at least two days before you dig. Large construction projects that dig deep into the earth are commonly thought of as the occasions when underground line locates are necessary. Because of landscaping or erosion, lines could be close enough to the surface that you could hit them with that first plunge of the shovel.

Please keep a minimum of three feet clear around our poles, meter boxes, and other equipment. Do not block access to meters or other PRECorp facilities with a deck, fence, tree, or addition. We will make mutually agreeable arrangements if you let us know ahead of time.

If you notice potential hazards involving PRECorp facilities, call 1-800-442-3630, to report the facility location and nature of the problem.

If you encounter a damaged power pole or line, always assume it is energized. Do not touch or try to move downed power lines. Stay in your vehicle if you hit a power pole or power line. If you must get out of the vehicle, keep both feet together and jump clear. Do not step onto the ground.

If you happen upon an accident involving a pad-mount transformer, power pole, or line, call 911 immediately. Do not approach the scene because electricity from energized lines can kill you, even if you are a few yards away.


PRECORP NEWS

The PRECorp Annual Meeting will be held on Saturday, August 24, at the Greater Hulett Community Center in Hulett, Wyoming.

Nominations are being accepted for the Powder River Energy Corporation Board of Directors before the meeting a list of nominations Pursuant to the bylaws of Powder River for directors, which may include a greatEnergy Corporation, this is a call to the er number of candidates than are to be members of the cooperative for Board elected. Any 25 or more members residof Director candidates. The following ing within the members have been service territory appointed to the Incumbent Board members up in the county Board of Directors for election this year are: from which a Nominating ComCampbell County: candidate for mittee: Bob Tarver Don Hamm director is to and Bob Innes, Johnson County: be elected may Campbell Counmake nominaty; Ed Foust and Pam Kinchen tions by petition Fred Carr, Johnson Weston County: at the principal County; and Nicky Reuben Ritthaler office of the corGroenewold and poration not less Pat Townsend, than 40 days prior to the meeting and the Weston County. This committee is resecretary/treasurer shall cause all nomisponsible for nominating qualified cannations to be promptly posted at the didates to run for election to the Board same place where the list of nominations of Directors. If you are a member of PREmade by the committee is posted. The Corp and would like to be a candidate secretary/treasurer shall also cause to for the board or would like to nominate a have mailed with the notice of meeting candidate, contact one of the committee or separately but at least seven days bemembers in the county where you reside fore the date of the meeting, a statement by May 17, 2013. of the number of directors to be elected It shall be the duty of the board of direcand the name and addresses of the cantors to appoint, not less than 90 days bedidates, specifying separately, the nomifore the date of the meeting of the memnations made by the committee on nomibers at which directors are to be elected, nations and also the nominations made a Nominating Committee consisting of by petition, if any. The chairman shall two members from each county holding invite additional nominations from the an election. No member of the board of floor and nominations shall not be closed directors may serve on the committee. until at least one minute has passed durThe committee, keeping in mind the ing which no additional nomination has principle of geographical representation, been made. No member may nominate shall prepare and post at the principal more than one candidate. office of the corporation at least 60 days

2013 Nominating Committee Members CAMPBELL COUNTY: Bob Innes 888 Black and Yellow Rd Gillette, WY 82718 (307) 680-5404 Bob Tarver PO Box 1008 Gillette, WY 82716 (307) 682-2417 JOHNSON COUNTY: Ed Foust 1211 Fort St Buffalo, WY 82834 (307) 684-7964 Fred Carr 1439 Sussex Road Kaycee, WY 82639 (307) 738-2604 WESTON COUNTY: Nicky Groenewold 155 Sears Road Newcastle, WY 82701 (307) 746-4206 Pat Townsend PO Box 364 Osage, WY 82723-0364 (307) 465-2342

Need a ride to the meeting? Call 1-800-442-3630 to reserve a seat.

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PRECORP NEWS

PRECorp selling surplus equipment, vehicles through online eBay auctions By Tim Velder, PRECorp Marketing Communications Trucks, trailers, cars and more are

at 8 p.m. MST on Friday, May 3, and

How to access the PRECorp units

available to purchase at special sur-

close at 8 p.m. MST on Monday, May

on eBay:

plus PRECorp equipment auctions on

13. The auctions are being held on

1. Go to www.ebay.com/motors

eBay to give all members a chance to

2. Under “Find a car or truck,”

eBay. These 10-day auctions will start

The items listed in the PRECorp eBay auctions are:

bid, regardless of where they are located and because eBay auctions give more exposure for each unit to maxi-

check “Used” then type in the zip code 82718. Hit enter. 3. You will see “Distance” on left

mize the number of bidders.

hand sidebar under Cars &

• 2002 Ford Taurus

Details of each unit along with pictures

Trucks Finder. Put in 10 miles of

• 2001 Chevy half ton pickup

will be on eBay at the start of the sale.

• 2002 Ford half ton pickup

Notice to bidders: Please obtain more

• 2001 Chevy Impala

• 2005 Chevy one ton cab and chassis (no bed) • Two 2006 Chevy half ton pickups • 1958 extendable pole trailer • 2002 Best Trailer 15 ton (flatbed is damaged) • 2003 ATV trailer (bent axle) • 2003 Bombardier four wheeler (damaged) • 1981 Flatbed trailer with ramps • 2008 Ford F350 cab and chassis (no bed) • 1993 Chevy Kodiak – aerial bucket

information from eBay or e-mail fleet@ precorp.coop. These are the only sources of information on these items. Please do not inquire with our offices or outposts because they do not have information on these vehicles.

82718. Click on the “Go” button. 4. There are other sorting options available on this page. 5. Click on the unit if you are interested in placing a bid. Keep checking back to make sure you still have the high bid. 6. If you are looking for trailers, change pages by looking up

To place a bid:

“Other Vehicles & Trailers,” follow

You do not need an eBay account if you

the same steps for refining the

are not bidding, but you must have an

search on vehicles.

account and sign in if you want to bid. Once the auction ends, eBay will send out a notification to the winning buyer and PRECorp. At that point, PRECorp will e-mail the buyer with information on how to make contact, payment, and where to pick up the unit.

Save the date: The 12th Annual Durham Ranch Buffalo Stampede 5k/10k Walk/Run, will be held Saturday, June 1, at the Durham Ranch north of Wright, WY, on Hwy 59. The event will raise funds for the Hospice of Campbell County Memorial Hospital. Registration begins at 7:30 a.m. The walk begins at 8 a.m. and the run at 8:30 a.m. The cost is $20 per person and $40 per family. A free breakfast is also served. For more information on the event go to: http://durhamranch.com/category/activities/

Properly installed shades can be one of the most effective ways to improve windows’ energy efficiency. Lower them during summer; in winter, raise during the day and lower at night on south-facing windows. Dual shades, with reeective white coating on one side and a heat-absorbing dark color on the other, can be reversed with the seasons and save even more energy. Learn more at EnergySavers.gov.


PRECORP NEWS

Tiny tech, big potential Microbes could stabilize declining coal-bed methane play By Tim Velder, PRECorp Marketing Communications Tiny bacteria could be the answer to a declining CBM market in PRECorp service territory. When thousands of coal-bed methane wells started to dot the landscape of the Powder River Basin a decade ago, PRECorp officials set up financial policies to protect its members from the anticipated decline of the industry. That decline began sooner than industry experts projected. In 2011 and 2012, some negative factors put the brakes on what was a rapidly expanding play in northeastern Wyoming. The market prices for natural gas plunged to low levels the companies couldn’t withstand. On top of the low prices, expenses increased for CBM companies as new environmental protections for sage grouse called for additional measures to ensure the species would not be affected. There are currently about 7,700 active wells producing in the area. Companies have retained certain rights to re-enter the land and resume extraction, while others have sold their wells to companies who hope to come back when profit margins become more attractive. Landowners and Wyoming state regulators have pressured companies to continue extracting methane or plug the wells permanently. There are more than 11,000 idle CBM wells in the Powder River Basin. The State of Wyoming has announced it is financially able to

plug the wells, but they are waiting as long as possible to do so.

expenditures for PRECorp members further into the future.

These are typical features of exploration and production of energy resources: peaks, followed by steep declines. One of the major concerns for PRECorp in recent years is the rapid decline of CBM load. PRECorp has budgeted for 25-percent declines and in reality, the CBM declines appear to have significant downward momentum.

Ciris is operating its initial project on 160 acres in PRECorp’s service territory.

Companies such as Luca Technologies and Ciris Energy, Inc., are poised to re-enter the market with an idea called microbial stimulation technology. Bacteria live in the coal in these CBM wells. The companies have developed technologies and processes where minerals and nutrients are introduced to the high-BTU coal-bed in the wells. The technology has been tested in a lab and in the field. Researchers have observed the bacteria consume the minerals and metals, and produce methane as a byproduct. From a treated well, Ciris has been able to extract 10 to 20 times more gas than from an untreated well, according to information provided by the company on its website at www. cirisenergy.com. By applying this new technology to existing infrastructure, those old wells could produce low-cost natural gas for many years. This is a long-term presence that maintains a consistent load demand for PRECorp, which helps stabilize rates and capital

Luca owns more than 1,300 wells and intends to acquire additional facilities in the area, according to information provided on the company’s website at www.lucatechnologies.com. If Luca and Ciris can bring this technology to the Powder River Basin, it would help PRECorp by slowing the downward trend of CBM revenue. This downward trend not only impacts the CBM rate structure, but puts upward pressure on rates for all PRECorp members. The companies have attracted attention with their nature-based technology. Domestic interests have taken notice of testing the process, as well as markets in Asia. Luca’s technology is a new concept that has federal regulators wrestling with permit applications. A year ago, the permit process with the Bureau of Land Management was halted. The BLM and Luca continue to update information in the permit. Progress on the permits and potential for the creation of a robust new microbial stimulation industry in northeast Wyoming remain in the hands of the inventors and the regulators. However, PRECorp is standing by eagerly awaiting definitive news regarding Luca Technologies. Look for updates on this topic in future issues of the PRECorp News.

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PRECORP NEWS

PRECorp joins forces with WBC to market renewable energy credits Powder River Energy Corporation and the Wyoming Business Council (WBC) have announced a partnership that enhances Wyoming’s economic development portfolio. The WBC and PRECorp are offering a solution for businesses seeking to offset their in-state energy consumption with renewable energy credits, known as WyoRECs. WyoRECs are part of the WBC’s business recruiting toolkit and can assist businesses in PRECorp’s service area which are seeking WBC financing and green power. Many large national and global businesses actively site projects in areas where green power is available in order to meet broader company-wide sustainability goals.

WBC representatives are actively seeking participants throughout Wyoming. Businesses interested in this program should contact WBC regional representative Brandon Marshall at 307-777-2820, or email brandon.marshall@wyo.gov Bob Jensen, Business Council CEO, said Wyoming has a varied portfolio when it comes to energy resources. “Oil, gas and renewable sources are all in abundance in our state. For companies interested in using renewable resources this incentive may be very appealing. We are happy to tell interested companies about its availability and to help connect them to PRECorp’s program. It’s just another business-friendly initiative we can tout to companies interested in operating in Wyoming,” said Jensen.

By selling renewable energy credits assigned to their company, PRECorp seeks to create value in a transaction which benefits Wyoming’s economy. PRECorp CEO Mike Easley initially proposed the WyoREC concept to WBC local representative Laura Ladd. Together, they devised a program where PRECorp will provide a discount to market pricing of WyoRECs as an incentive to participate in the program. Proceeds from these transactions will then be reinvested in projects which are matched by the WBC and specifically located in the PRECorp service area. Mike Easley said, “We are excited to partner with the WBC on the development of the WyoRECs program. It is our hope that this program will stimulate economic development and business relocation in Wyoming both through the inclusion of WyoRECs as a recruiting incentive and through the availability of matching funds for businesses in PRECorp’s service area which are seeking to grow.“ As a cooperative, governed by a member elected board, PRECorp is always looking out for its members and seeking to assist in improving its communities. For PRECorp this new partnership and new program seeks to: • Realize net economic value over the long-term • Directly benefit customers in Wyoming or benefit other organizations which improve the members’ quality of life • Demonstrate leadership in the community

The WBC is also seeking community economic development agency partners who are interested in promoting WyoRECs to their area business. Forward Sheridan, the economic development organization in Sheridan County, is collaborating with PRECorp on the first purchase of WyoRECs. Director Jay Stender states, “Forward Sheridan is focused on diversifying our economic picture. Data center/ disaster recovery businesses, tele-health, and back-end programming businesses have expressed need for renewable power.” In addition to marketing the program through the WBC regional representatives, the WBC will be developing marketing materials with three different profiles—regional effort, manufacturing businesses, and data centers—and distributing materials nationally.

Mike Easley

Jay Stender

Bob Jensen

HOLIDAY OFFICE CLOSURE: Powder River Energy Corporation offices will be closed Monday, May 27, in observance of the Memorial Day holiday.


PRECORP NEWS

PRECorp is offering a $15,000 cash reward for information leading to the arrest and conviction of the person or persons responsible for incidents of vandalism.

Vandalism not tolerated by PRECorp By Tim Velder, PRECorp Marketing and Communications Isolated incidents of vandalism have damaged PRECorp facilities and power distribution equipment, one as recent as a few weeks ago. PRECorp works with local law enforcement to investigate the crimes. Often times vandalism causes immediate or delayed-reaction outages that must be repaired. The most recent incident occurred in April in which gunfire damaged a substation in Crook County. PRECorp is taking a firm stance against this type of behavior because all it takes is one bullet to put hundreds of PRECorp members in the dark. PRECorp is offering a $15,000 cash reward for information leading to the arrest and conviction of the person or

persons responsible for incidents of vandalism. If anyone has any information about other specific incidents of vandalism, please call local law enforcement. All information will be kept anonymous. When a person vandalizes Powder River Energy equipment, it is as if that person is damaging something in your home. As PRECorp members, we share ownership of this equipment equally and acts of vandalism come at a cost to us all, in that it can impact rates. PRECorp crews work very hard in all conditions to provide high-quality power, and man-made outages due to vandalism put them at risk, and create unnecessary hardships for our members.

We need your help to keep our equipment safe, prevent outages and protect lives. If you see anyone other than our utility personnel or contractors around substations or other electric facilities, report it to your local authorities. Crimes can also involve theft of metals from our facilities. Thefts of copper, aluminum and bronze have been committed across the nation at abandoned commercial buildings, empty homes and—most dangerous— at power substations. Thieves have been seriously injured and even killed attempting to steal metal from power facilities. If you notice anyone causing damage to PRECorp facilities, please call your local law enforcement office immediately.

NOTICE: For the months of May through October, the past-due notice will be used as the notification to PRECorp members that their service will be disconnected for non-payment. Signing up for Operation Roundup® is easy. Simply check the box on your monthly electric bill to help our community. It’s always less than a dollar in change. You can also sign up by calling PRECorp Member Service at 1-800-442-3630, or by going to www.precorp.coop. Contributions to Operation RoundUp® are tax deductible. Powder River Energy Corporation distributes Operation RoundUp® funds to the Powder River Energy Foundation to support local charitable endeavors.

OPERATION

RoundUp

OPERATION

®

RoundUp

®

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CEO Straight Talk

PRECORP NEWS This past month I spent a week in Washington, D.C., working on issues that are important to PRECorp. I was meeting with other cooperative executives from across the country who are learning how to use the Touchstone Energy Strategy execution system. This system was customized for electrical cooperatives nationally and PRECorp was part of the team that helped with this year-long process.

mike easley, CEO

Strategy Execution System Stage 1 Develop the Strategy Stage 2 Translate the Strategy

We shared our experience with strategy Stage 3 execution and helped the other cooperaAlign the tives, while at the same time we learned Organization even more about how we can improve our strategy execution process. This is a great example of the cooperative prinAllocate reciple of “Cooperation among Cooperasources through tives.” Cooperatives that execute strategy operating plans deliver more value to their members than and budgets that are expliccooperatives that do not follow through ity linked to with execution of their strategy. This has strategy been especially important for PRECorp as we navigate through the many headwinds we have been experiencing over the past several years. The decline in the CBM industry, the pressure on the coal industry due to a combination of low natural gas prices and environmental concerns on carbon emissions, are just a few elements of this headwind.

PRECorp Mission

Powder River Energy, your electric cooperative, will deliver high quality, competitively-priced electric power and services to our memberowners, while enhancing the quality of life by providing leadership and service in our communities. Rather than hunker down and hope for better days, we are diligently developing and executing strategy and creating opportunity which we hope leads to our continued success in executing our Mission. The article in this month’s issue of PRECorp News regarding two of our members, Luca Technologies and Ciris Energy, Inc., highlights its potential to help us stabilize our declining sales. I took advantage of my time in D.C. to visit with policy makers and regulators concerning this opportunity. It is important that policy makers and regulators know our story. There are usually trade-offs in developing any resource and our hope is to do what we can to bring folks together and look for common ground so that we can maximize the opportunities and benefits for our 12,000 member-owners.

POWDER RIVER ENERGY CORPORATION

Clarify strategy into operational and measureable terms Align the organization to strategy and motivate the employees to help execute

Stage 4 Link to Operations

Set our strategic priorities

Stage 6 Test and Adapt

Respond to shifts in the environment and the effects of strategic choices Check progress and revise strategy as part of a continual process

Stage 5 Monitor and Learn

Execute Initiatives > Processes >

Conduct ongoing operations and discretionary projects

I realize that I have spent a lot of time in my recent articles explaining PRECorp’s strategy and I hope that you are learning and gaining a better understanding. As you reflect on these articles I hope you remember that you are an owner of Powder River Energy Corporation. Part of my job as CEO is to equip you with the information that you need so that you are better able to exercise your rights and responsibilities as an owner. I hope you had the opportunity to read the article in this issue regarding the upcoming election process and our Annual Meeting on August 24, 2013, in Hulett. Our cooperative will not be able to function without the involvement of our member-owners. In a non-cooperative utility a customer is not involved in how the business runs. That’s the job of the owners. In a cooperative that model is turned around because the customer and the owner are same. A strong cooperative relies on its strategy (and its ability to execute that strategy), its operational performance, and the level of engagement of its member-owners. If there is anything we can do to help you better understand the workings of your cooperative, please let us know.

Regular business: 1-800-442-3630 • Report an outage: 1-888-391-6220 www.precorp.coop


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