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No increase in 2011 LPEA rates

The Board of Directors of La Plata Electric Association (LPEA) approved Resolution 2010-26 Wednesday, Nov. 17, which outlines the Capital Projects and Capital Items Budgets for 2011. This includes adopting LPEA’s 2011 Financial Forecast with no rate increase for LPEA member-customers.

The action comes after months of concerted effort to maintain costs and trim expenses for the benefit of LPEA member-customers, while not impacting electricity service. This will be the second year, following a previous five years of rate increases, that LPEA has not raised electric rates for its residential and commercial/industrial customers.

“We have an obligation to maintain the electrical system in La Plata and Archuleta counties, and infrastructure and maintenance are viable and necessary expenses,” said Terry Alley, LPEA board president. “Staff has scrutinized all potential projects and expenses to ensure that we will not have to raise rates in 2011. We have also found savings and reduced expenses in many areas through the use of technology and essentially more efficient practices in the workplace. Tri-State Generation and Transmission, from which we get the majority of our power, has done the same and will also not raise rates in 2011.”

Greg Munro, LPEA CEO, cautioned, however, that 2011 will likely be the last year LPEA will be able to avoid a rate increase, given pending federal and state regulations, as well as cost pressures placed on Tri-State, which in addition to LPEA, supplies electricity to 44 rural electric cooperatives.

“In the coming year, I can assure our members that one focus for communications will be the future of electric rates, specifically, reasons why rates are predicted to and likely will be increasing in the not too distant future,” said Munro. “We will do our best to keep rates stable for 2011, but we unfortunately cannot assure that this will be the case in 2012 and beyond. As we go into 2011 we will, as always, be very cautious and fiscally responsible in order to meet our financial requirements. Some things funded in the past, simply won’t get funded this year.”

The LPEA board approved the 2011 Capital Projects Budget of $23,566,527, which includes infrastructure construction and repair throughout LPEA’s service territory to ensure reliable transmission and distribution of electricity. The approved Capital Items Budget is $864,879. LPEA’s complete 2011 budget includes the Financial Forecast of more than $97.6 million in revenue, and some $97.9 million in expenses, leaving a negative margin.

“It will be up to staff to find savings to make up the difference as the year unfolds,” said Munro.

During the meeting, the LPEA board of directors also adopted its key areas of strategic focus for 2011, which are:

• Maintaining the lowest reasonable rates while keeping good financial ratios;

• Improving reliability of electric power and increase use of new technologies for smarter grid applications;

• Continuing to enhance communications and relationships with members and all constituents;

• Enhancing service to our members through payment options, energy efficiency and conservation education, electrical safety, and local renewable generation opportunities.