EMPIRE ELECTRIC ASSOCIATION, INC.

[Echoes of the Empire]

coloradocountrylife.coop 7JANUARY 2016

ERates Won’t Change in 2016 for Most of Empire Electric Association Members BY JOSH DELLINGER || GENERAL MANAGER

Empire Electric Association is a nonprofit distribution cooperative that purchases power from Tri-State Generation and Transmission Association. We then deliver that power to our membership. Empire’s rate tariffs are designed to recover our costs to purchase power from Tri-State, as well as our own inter-nal expenses. As a member-owned cooperative, we try to develop rates that recover costs as fairly as possible.

One way we do this is by separating different types of services into different rate classes. The cost to serve a load can vary widely depending on the characteristics of that load. For example, the cost to serve a residence is much different than the cost to serve a large business; therefore, residences and large businesses are in separate rate classes and pay different rates. The principle behind this practice is that the rate class that causes a particular cost to be incurred should be responsible for paying for that cost.

A second way we attempt to fairly recover costs is by using a cost-of-service study. A cost-of-service study basically considers all of Empire’s costs and allocates those costs to the various rate classes using established industry methods. Again, the driving principle is that the rate class that causes a particular cost to be incurred should be responsible for paying that cost. The recom-mended rates that flow out of a cost-of-service study are often called “cost-based” rates. Cost-based rates are intended to fairly recover costs and limit subsidizations between rate classes. Pure cost-based rates are difficult to achieve due to constantly changing costs and limitations in metering equipment.

Empire performed cost-of-service studies in the past and made considerable efforts toward developing cost-based rates. Our most recent cost-of-service study reflects our past efforts. The study showed that only slight changes in our tariffs are needed to align our present rates to our present costs. Empire’s board of direc-tors considered the study and ultimately decided that the changes recommended were not significant enough to warrant changes

to the tariffs. Thus, I am pleased to announce that there are no proposed rate changes for the vast majority of Empire’s members in 2016. Residential, general service, irrigation and lighting rates will remain unchanged.

Though the majority of Empire’s tariffs will remain the same, there will be a few updates. Empire is proposing changes to its large power tariff and power cost adjustment (PCA) clause. The proposed changes are a reflection of a restructured rate from our power supplier Tri-State, and not a rate increase. The large power tariff and the PCA clause each contain direct pass-through charges from Tri-State. Tri-State will move from essentially an all-energy rate structure back to a more traditional demand-energy rate in 2016. This is a significant but welcomed change to what we believe is a more appropriate and equitable rate structure. Since the Tri-State rate is changing, both the large power tariff and PCA clause need to be updated to reflect those changes.

Empire is also proposing a new transmission service tariff for customers who take service at transmission level voltages. Transmission level voltages are defined as voltages of 44 kilovolts or above. The rates for this tariff were developed using the most recent cost-of-service study.

The proposed changes took effect on January 1, 2016. If you have questions about rates, or about any other cooperative busi-ness, please give us a call at 970-565-4444 or stop by the Cortez office located at 801 N. Broadway.

Josh Dellinger

Cost-based rates are intended to fairly recover costs and limit subsidizations between rate classes. Pure cost-based rates are difficult to achieve due to constantly changing costs and limitations in metering equipment.

[Echoes of the Empire]

coloradocountrylife.coop4 JANUARY 20168

My Co-op Advantage

Scholarships The deadline to return scholarship applications is February 15, 2016. Student and adult schol-arship forms are available at www.eea.coop. The forms can also be picked up at EEA headquarters, 801 N. Broadway, Cortez, or at your high school coun-selor’s office. For more information, please contact Denise Rosenbaugh at 970-564-4441 or email denise.rosen-baugh@eea.coop.

January 1 ................................................New Year’s Day, office closed

January 4 .......................................Scholarship applications available

January 5 ...................................................Youth Trip applications due

January 8 .....................................................................EEA board meeting

January 15 .......................................................Office closed for training

January Photo Contest Winner — Mountain Flowers by Scott Twilley

My Co-op Calendar JANUARY 2016

My Co-op EmployeesEmpire Electric welcomes two new employees to the co-op world.

Christine “Chris” Hill began her new position as part-time staff secretary on December 1. Chris moved to our area from Prescott Valley, Arizona, and was previously in office administration and management.

Kevin Cicchini accepted a journeyman lineman position on December 8. Kevin previously worked as a journeyman line-man in the contract world, most recently in Farmington.

EEA delivered a $6,000 donation to Chuck Forth, executive direc-tor of Onward!, to be distributed to the Cortez Rotary Founda-tion for its Imagination Library. The Onward! Foundation received two checks: one from CoBank’s “Sharing Suc-cess” charitable con-tribution program for $3,000 and the second from EEA for $3,000.

The Imagination Library will use these funds to help purchase a book a month for approximately 600 children from 1 to 5 years of age living with qualifying families in Empire’s service territory.

Forth not only provides this opportunity to improve literacy for children, but he also sees the benefits of Imagination Library firsthand.

“I look forward to receiving a book a month for my daughter,” Forth said, “because it brings us together for a relaxing moment of quiet time.”

The Cortez Rotary Club Foundation Fund sponsors Imagination Library under the umbrella of Onward!. Onward! is a community foundation acting as the fiscal sponsor for numerous chari-table programs. It provides opportunities for investors with the philanthropic goal of enhancing the quality of life for residents in the Four Corners communities. The Onward! Foundation has total assets of $2.2 million and comprises 42 funds that focus on scholarships, civic beautification, social services, arts and culture and organizational development.

Donation for Onward!

Christine (Chris) Hill

Kevin Cicchini

Chuck Forth

[Echoes of the Empire]

coloradocountrylife.coop 9JANUARY 2016

EWhen it comes to paying your electric bill, EEA provides a vari-ety of options to make it more convenient for you. Traditionally, members receive a bill state-ment in the mail along with a postage paid return envelope to return a check without the ad-ditional cost of a stamp. But this is no longer your only choice.

Additional options well been added that allow you the freedom and convenience of not having to mail us a check each month. Now, you can pay electronically with our online bill pay or use our automated telephone system. Both of these options allow you to pay your bill with either a credit card or an electronic check.

The online bill pay option is located on EEA’s website at www.eea.coop. Just click on “Pay My Bill” to sign in. You are required to have an email address registered on your electric account in order to successfully use this method of payment. This can be accomplished with a simple phone call to one of EEA’s consumer services representatives.

When paying online, there are additional options available. A single transaction can be posted immediately or you can se-lect a future date to post a payment. A recent enhancement of this program gives you the option of signing up for a credit card draft or a bank draft.

A paperless option is also available and once you are en-rolled in paperless billing, a paper bill will no longer be mailed to you. You will receive an email notification when your statement is available and you can pay by the method most convenient for you: online, by phone, in person or automatic

withdrawal from an account. If you prefer an automatic with-

drawal from your account and don’t want to sign up electronically, we can set it up for you. The auto-matic payment plan is an electronic transfer that withdraws funds from your checking or savings account each month. You can sign up for this option with an authorization form obtained at our main office, 801 N. Broadway, Cortez.

If you don’t like surprises and pre-fer the same utility bill each month, you can sign up for our budget bill-

ing plan. The monthly billing amount is based on an average of your last year’s usage. This plan is only available to those who have established an active account at the same location for a year or more. The monthly amount will be automatically withdrawn from your choice of a credit card or checking or savings account.

As a precaution, EEA wants you to be aware that there are sites using the EEA logo that are available to pay your electric bill, but are not affiliated with EEA. These sites are designed to help you consolidate your monthly payments and may charge an extra fee. Cooperatives, like EEA, cannot control when a member’s payment is received from this type of company, which could result in a late payment or even disconnection. To make sure you’re paying EEA directly, visit the website at www.eea.coop.

With all of the options now available to pay your bill, we hope you find one that fits your needs. If you have questions about these options or have problems while using them, please give us a call at 970-565-4444 or 800-709-3726.

You Have Choices When It Comes to Paying Your Electric BillBY BOBBE JONES || MEMBER SERVICES MANAGER

Visit www.eea.coop to pay your bill.

Outage Support

If you’re experiencing a power outage and neighbors do not have electricity, call us at Empire Electric Association. A repair person will be dispatched as quickly as possible. We can also tell you if it will be an extended outage.

[Echoes of the Empire]

coloradocountrylife.coop4 JANUARY 201610

TThe financial industry is keeping a close eye on how the U.S. Environmental Pro-tection Agency’s Clean Power Plan will affect electric co-ops.

The plan released last year proposes to reduce greenhouse gas emissions largely by cutting back on the use of coal to generate electricity. And that, says one of the leading Wall Street investment rating firms, Standard & Poor’s Financial Services, “could hit some electric cooperative utilities hardest: As the National Rural Electric Cooperative Association reported, these utilities rely on coal for an average of 70 percent of their energy needs, compared with a national average for all utilities of less than 40 percent.”

The emission reductions are sched-uled to begin in the year 2022 and be

completed by 2030. Those deadlines could be delayed by lawsuits that were filed challenging the plan.

So how do the FCC requirements af-fect you as co-op members? Important notifications that we use to commu-nicate with you, such as a past due re-minder or a disconnect notice, could be considered violations. We require your consent prior to sending an automated robo-call to your cell phone. However, we will continue to send emergency announcements, like a planned outage, to you.

“From both a credit quality and management perspective, there’s a lot of strength in the electric cooperative program — a huge asset in the cur-rent regulatory environment. We’re positioned well for future stability,”

says Sheldon Peterson, CEO of the National Rural Utilities Cooperative Finance Corporation. “Our business motivation is different. Our objectives are not to maximize the rate of return, our objectives are to minimize costs to the members. That’s very positive for us and leads to competitiveness.”

The S&P report states, “We expect them to use similar methods to maintain their credit quality as the EPA finalizes regulations that could, in our view, sig-nificantly influence the cost of providing electric service — and we’ll be watching to gauge their success.”

Paul Wesslund writes on cooperative issues for the National Rural Electric Cooperative Association.

Investors Concerned About EPA Plan’s Effect on Co-opsBY PAUL WESSLUND

What Wall Street Investors Like About Electric Co-ops

Top Wall Street ratings firms give electric co-ops high marks for their

strength and stability. While no one can invest in an electric co-op

because it’s a not-for-profit, member-owned utility, co-ops do turn

to Wall Street to help finance expensive projects like power plants

and transmission lines. Investors pay favorable rates for that financing

because they’ve learned to trust the electric co-op industry’s business

model as a safe place to get good returns on their money.