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POWERLines

OCTOBER 2007 Official Publication of Powder River Energy Corporation

Directors Re-Elected at 62nd Annual Meeting Co-ops are different than Investor Owned Utilities and Municipalities in many ways, but the most important difference is that you, the member-owners, are locally represented by a Board of Directors; a Board of Directors you vote on every year. That means you have a voice in your electric cooperative. This year four Board of Directors were re-elected for three-year terms: Tom Davis (Campbell County), Philip Habeck (Crook County), Walt Christensen (Weston County) and Leo Ankney (Sheridan County). In addition to those re-elected six other Directors represent you: Pam Kinchen (Johnson County), Ken Knudson (Johnson County), Paul Baker (Crook County), Reuben Ritthaler (Weston County), Bob Tarver (Campbell County) and John Buell (Sheridan County). After the standard business meeting at the Gillette CAM-PLEX members were treated to a night at the races at Gillette Thunder Speedway. Also on hand was the Touchstone Energy Hot Air Balloon, a hit with young and old alike. The Annual Meeting is just one of the many ways Powder River Energy is looking out for you. Watch for details of the 2008 Annual Meeting in upcoming publications.

Save Time - Pay Your Bill Online! Online Billing allows our members to view and pay their bill online. It is a great way to save time and help the environment. When a member signs up for Online Billing a paper bill can be replaced by an electronic bill transmitted via email. Saving paper means saving trees. Trees in turn offset carbon emissions. Online Billing also allows members to: • View billing and payment history • Request a connection or disconnection of electric service • View charts showing monthly cost, average cost, monthly usage and average usage • Chance a mailing address or phone number • View capital credit refund history Payments can be made via credit card (Visa and Mastercard) for residential members or with an e-check. An e-check allows members to have their bill deducted from their checking account without actually writing a check. The transfer of funds is completed electronically. To sign up for Online Billing go to our website at www.precorp.coop then “Pay Online.” For information on Powder River Energy Corp.’s proposed Cost of Power Adjustment filing with the Wyoming Public Service Commission please visit our website at www.precorp.coop; News; Stakeholder Info. Copies of the information are also available at our offices in Sheridan, Gillette and Sundance.

Your Touchstone Energy® Cooperative The power of human connections

visit us at: www.precorp.coop


2008 Rate Adjustment Powder River Energy Corp. is a locally owned and operated, not-for-profit electric cooperative serving the five counties of northeast Wyoming. PRECorp does not function to realize profit, but actually returns any profits to you, our member-owners. Therefore, any rate adjustments are scrutinized carefully before implementation. In fact, PRECorp hasn’t had a residential rate increase since 1991. However, a rate adjustment will be necessary in 2008. When you pay your monthly power bill a portion of that bill goes to pay our wholesale power costs and a portion of that bill pays for the costs to deliver that power to you. The wholesale component of your bill is a direct pass through of our actual costs from our power supplier, Basin Electric. We do not have control over that part of our power bill. Of a total average residential bill of $72 per month, $37 is used to pay for wholesale power and the remaining $35 is used to pay the distribution costs for delivery of that power to your house. The $35 in distribution costs of your power bill is impacted by our principal and interest payments on loans, labor costs, facility, equipment, and materials. We have some control over these costs. We try to balance how much we spend against the costs. If we don’t spend enough our service quality does down; if we spend too much we don’t see value for what has been spent. We develop our rates based upon the results of a Cost of Service Study. This study looks at our totals costs and helps us to allocate the costs to the various customer classes we serve. The Board and staff carefully review this information and make financial decisions that ultimately result in a proposed rate design. These results are compiled in a study and are then filed with the Wyoming Public Service Commission (PSC.) The PSC reviews the rates and conducts a lengthy hearing process and ultimately issues an order accepting or modifying our original filing. The results of our current cost of service study indicated a need for a slight increase in our retail distribution charges. In addition the PSC had previously issued an order to PRECorp directing us to develop a plan to bring members to cost of service. This means the PSC is concerned about the relationships between customer classes and would like to see each class pay its own way and not be subsidized by another class of customers. Typically high-use members provide subsidies to low-use members. This happens to members within a particular class as well as between classes, such as industrial customers providing subsidies to residential and seasonal classes. Based upon the results of the Cost of Service Study and the pending Wyoming PSC order we have proposed the following changes to the distribution component of our rate structure: Residential Residential – Seasonal Residential Time of Day General Service Large Power Transmission Irrigation Lighting Idle Services

$ 490,533 $ 92,449 $ 7,490 $ 168,318 ($ 224,926) $ 11,881 $ 22,554 $ 1,152

4.68% increase 9.02% increase 7.09% increase 2.27% increase 0.64% decrease 10.13% increase 12.51% increase 52.17% increase

In addition to the distribution rate adjustment discussed above, our power supplier Basin Electric has notified us of an increase in wholesale rates for 2008. We have estimated the impact of the wholesale rate increase to be about $9.5 million or an increase of 10.82 % in wholesale power costs (based on the 2007 Cost of Service Study). PRECorp will file with the PSC to recover this increase in wholesale power cost through its Cost of Power Adjustment later this year. The changes mentioned above will result in an increase to a residential member using 1200 kWh per month of $7.38 per month. This includes an increase of $4.46 in wholesale power costs which are a pass through of our wholesale power costs and an increase of $2.92 in retail distribution costs which represent PRECorp’s cost of getting the power delivered to you. We would have preferred to give you one more year of rate stability, but we could not absorb the ever increasing costs of doing business. When you take a look at how we compare to other utilities around the State (see chart), PRECorp is still a great value. The value we deliver to you is even more significant when you consider our customer density is 2.68 services per mile of line. In addition to providing some of the lowest rates around, we continue to be a leader in our industry and we continue to look out for you.

POWER Lines A publication of Powder River Energy Corporation P.O. Box 930 Sundance, WY 82729 As an official publication of Powder River Energy Corporation, the purpose of Power Lines is to communicate to member/customers information concerning their electric cooperative, and to offer suggestions and ideas regarding the safe, efficient, and economical use of electric energy. Back issues of the Power Lines can be found on Powder River Energy’s website at: www.precorp.coop/community.cfm. Power Lines Editor: Doreen Schaar


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