When compared to other electric utilities in Wyoming, PRECorp’s rates are among the lowest in the state. And on the national scale, our rates are among the lowest in the country.

According to data on the Wyo-ming Public Service Commission website, PRECorp’s rates are very competitive with other cooperatives, investor-owned utilities (IOU’s) and municipal-owned systems. Based on a monthly residen-tial usage of 750 kilowatt hours, PRECorp’s average rate of $0.093160 is the fourth lowest of the 20 cooperatives and IOU’s in Wyoming.. Two other cooperatives top the list as the cheapest in the state with average rates of $0.070627. Compared to the dozen municipal power sys-tems listed, more than half have rates higher than PRE-Corp. See for yourself at http://psc.state.wy.us/htdocs/dwnload/Ratecompweb.pdf

Local business owners Jim and Carmen Diehl see the rate difference every month. PRECorp serves their two grocery stores in Crook County, while an investor-owned

utility serves the Diehl’s third store in Weston County. Car-men Diehl said the power usage is comparable at the two larger stores.

“In comparing electrical bills between the two largest stores, the rates are almost double on the

[non-PRECorp] store,” said Carmen Diehl. “There are a lot of charges included in the bill that I don’t understand, but the bottom line tells the biggest tale.”

The Diehls recognize the benefit of cooperative member-ship. “There is the fact that Powder River is a co-op. Our grocery supplier is also a co-op, so the whole system where it is consumer-owned is a huge benefit to all of us,” she said. “We are all partners in the business and share by means of a rebate in the company profits. We definitely can see an advantage in being a part of Powder River Energy.”

PRECorp has a strong standing statewide and nationally for keeping its rates competitive. PRECorp would like to have the lowest rates in the state, but each provider de-

Keeping power rates in perspectivelocal grocers have feet in two worlds of co-op and for-profit utility

By Tim Velder, PRECorp Marketing and Communications Specialist

In This Issue2012 Membership meeting highlights

Bob Tarver presented with Earl Christensen Award for 2012

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

O C T O B E R 2 0 1 2

PRECorp News

Foundation hosts annual golf tournament

PRECorp offers special rates and programs for members

CEO Straight Talk

POWDER RIVER ENERGY

CORPORATION

the most significant part of the rates you pay is

the cost of the electricity precorp purchases.

continued on page 4

P R E C O R P N E W S2

Membership meeting falls short of a quorumBy Tim Velder, PRECorp Marketing and Communications

Photos by Tim Velder, PRECorp.

The 67th Annual Meeting of the Powder River Energy Corporation fell a few members shy of reaching the required 100-member quorum Saturday, August 25, at the Clarion Inn in Gillette.

The lack of a quorum prevented the membership from conducting its board member elections and other annual business. Board members Pam Kinchen, Don Hamm and Reuben Ritthaler will be up for election again next year. During the meeting, Board President Tom Davis, Board Treasurer Philip Habeck, and CEO Mike Easley delivered reports. PRECorp COO and Foundation Executive Director Les Penning and Foundation Board member John Flocchini also updated the audience on Foundation activities.

Special guests for the occasion were U.S. Senator Mike Enzi and U.S. Representative Cynthia Lummis. Entertainment for the day included Chuck Larson. The special Earl Christensen award was given to Bob Tarver (see page 3.)

top: Mike Easley talks with PRECorp members prior to convening the PRECorp Annual Meeting.Bottom left: PRECorp COO and Foundation Director Les Penning discusses Foundation activities with the crowd.Bottom right: US. Sen. Mike Enzi addresses the PRECorp audience August 25.

3P R E C O R P N E W S

Bob tarver receives earl christensen awardBy Kristin Kelly and Tim Velder, PRECorp Marketing and Communications

continued on page 6

Photos by Tim Velder, PRECorp.

Above, Bob Tarver is pictured at his ranch north of Gillette. Bottom left, an electric line services a pasture well on the ranch.

Good fences and pasture water are essentials for a successful livestock operation.

Those essentials have been buttressed by rural electrification and are perfectly illustrated on Bob Tarver’s ranch.

Bob’s community commitment, his ranching experience and his PRECorp board position allowed him to be able to balance the interests of every individual member, from industrial and small business to residential. For his work in the electric cooperative community he was awarded the Earl Christensen Award at the 2012 Annual Meeting in Gillette. Presented by Earl’s son, PRECorp Board Vice-president Walt Christensen, the Earl Christensen Award was given as gesture of thanks for Tarver’s dedication of

the precorp earl christensen award

The Earl Christensen award is named after Senator Earl Christensen of Weston County, Wyoming. The award is presented to those who through their hard work, dedication, and perseverance have furthered the purpose and goals of the rural electric cooperative program.

In 1945 Earl and six others were the original incorporators of Tri-County Electric Association, a rural cooperative that would grow and merge with Sheridan-Johnson REA to become PRECorp. In 1945 a rural home or farm with electricity was as hard to fathom as it is to imagine one without electricity today. An original board member had to be part lobbyist and part salesman. It took complete perseverance to make that dream a reality. Earl continued his work for the co-op through his time with the Wyoming Legislature as a state senator.

P R E C O R P N E W S4

velops rates that fit their operating conditions. One of the cooperatives on the PSC website with lower rates than PRECorp is a small organiza-tion with only 50 members, and its electricity comes entirely from low cost hydro-electric genera-tion. Municipal utilities generally provide services to customers who are close together and sharing the infrastructure needed to serve them, while PRECorp serves rural and in-dustrial customers spread out over five counties. These are the sorts of factors that will go into determining appropriate rates.

The Diehls point out another impor-tant factor.

Unlike an IOU - such as Rocky Mountain Power, Black Hills Power,

or Montana-Dakota Utilities - PRE-Corp does not seek to maximize profits.

What distinguishes our electri-cal distribution cooperative from some other utilities is the absence of a profit motive. The IOU returns excess revenues to its shareholders, not its customers. As a non-profit organization, the goal of Powder River Energy is to provide high-quality, competitively-priced electric service to our member-owners.

PRECorp will continue to work to maintain high quality power with competitive rates. We are constantly seeking savings through diligent planning and efficiencies. At the end of the year, if our revenues exceed the expenses incurred in

the year to deliver electricity to the membership, then the excess rev-enue is allocated back to our mem-bers as Capital Credits. PRECorp’s Board of Directors, at their discre-tion, may then decide to retire those capital credits as a cash payment to the member.

The most significant part of the rates you pay is the cost of the electricity PRECorp purchases. Basin Electric generates the electricity and sells it to PRECorp, and we distribute it to our members. More than three-fourths of every dollar of revenue provided by your power bill goes to the cost of that power. Power cost is a part of the rate each class pays, and the annual Cost of Power Adjustment (COPA) is used to align rates with the rates Basin Electric charges PRECorp. When Basin increases its rates, the COPA applies that cost of power to the member-ship, but only enough to recover the cost increase. COPA revenues do not pay for trucks, wages, or for anything other than the cost of electricity purchased from Basin Electric.

The next article in our series will highlight our relationship with Basin, and provide information on the electricity it supplies to PRE-Corp customers. It will also discuss the COPA in greater detail. As 2012 comes to a close, we will calculate the next COPA, which will take effect in January. The COPA will be filed with the Wyoming Public Service Commission in late Novem-ber or early December, and we will announce details on the change as soon as they are available.

rates... From page 1.

Average Prices for Residential Electricity 2010 �gures, in cents per kWh

Source: U.S. Energy Information Administration Numbers rounded to nearest tenth of a cent

Updated January 2012

U.S. Average: 11.5¢ per kWh

Residential Average Price(cents per kilowatt-hour)

Under 9¢9¢ to 12¢

Over 12¢

VT: 15.6¢NH: 16.3¢MA: 14.6¢RI: 15.9¢CT: 19.3¢

NJ: 16.6¢DE: 13.8¢MD: 14.3¢DC: 14.0¢

ME15.7¢

NY18.7¢

PA12.7¢OH

11.3¢

MI12.5¢

IN9.6¢

IL11.5¢

WI12.7¢

MN10.6¢

IA10.4¢

MO9.1¢

AR8.9¢

AL10.7¢

KS10.0¢

TX11.6¢

NM10.5¢

MS9.9¢ LA

9.0¢

NE8.9¢

SD9.0¢

ND8.1¢

CO11.0¢

TN9.2¢

FL11.4¢

GA10.1¢

SC10.5¢

NC10.1¢

VA10.5¢KY

8.6¢

WV8.8¢

AZ11.0¢

UT8.7¢

NV12.4¢

CA14.8¢

WY8.8¢

MT9.2¢

ID8.0¢

OR8.9¢

WA8.0¢

AK16.3¢

HI28.1¢

OK9.1¢

P R E C O R P N E W S 5

electric utility vendors team up for foundationBy Kristin Kelly, PRECorp Marketing and Communications

Each year the Powder River Energy Foundation organizes a golf tournament to raise funds for the foundation’s mission of community support. The Foundation gives to charities ranging from early childhood education, elderly care, community development and programs for those in economic need. Vendors and suppliers to Powder River Energy Corporation sponsor the tournament. These vendors provide products and services ranging from engineering and consulting, to poles and materials, wiring, and other inventory that builds and maintains the PRECorp distribution system. This year’s event was held at the award-winning Powder Horn Golf Course on September 7. Foursomes played a scramble format, matching vendors with PRECorp employees and guests. Pin prizes and team awards were handed out, including “most honest,” for the highest scoring team. Les Penning, General Manager of PRECorp and Executive Director of the Foundation, thanked the golfers and sponsors after the round. Les explained to vendors how being a part of the PRECorp cooperative system and supporting the community nonprofits and

services through their sponsorship made a big difference for PRECorp members and communities in northeast Wyoming. By enjoying a day of golf and supporting the fundraiser, they were in turn supporting a legacy of cooperative commitment to members, helping so many with the funds raised. Through team sponsorships, pin prize sponsorships and outright donations, more than $9,000 was raised for the Foundation.The Foundation has supported reading readiness programs for pre-school children, and recovery programs in Campbell, Crook, Johnson, Sheridan and Weston counties.ace sponsors Bell Lumber & Pole - Blpole.comBell Lumber & Pole of New Brighton, Minn., has been supplying wood utility poles to

North American utility markets for more than a century. Since 1909 the family-owned business has manufactured utility poles for sale to rural electric cooperatives throughout the United States. Their mission statement is: “Stewardship – Excellence – Entrepreneurial Spirit.” HD Supply - www.hdsupply.com A true supporter of the Foundation since the beginning, HD Supply’s regional representative Jim Brown serves as the main organizer of the tournament. From contacting sponsors to providing promotional items for golfers to making teams, Jim’s work makes the tournament a success. HD Supply Facilities Maintenance is a leading supplier of maintenance, repair and operations (MRO) products to a variety of industries.“We have a responsibility to everyone who contributes to our success-our investors, customers, suppliers, associates and communities. As we drive toward becoming the distributor of choice to grow with and trust to always be there – strengthening and enriching our communities is an integral part of making that happen. “ - Joe DeAngelo, CEO HD Supply

continued on page 7

Photos by Kristin Kelly, PRECorp.

Left: PRECorp employees Tracy Jones and Matt Davis; Middle: The Climate Solutions team wins the 2012 tournament; Right: The picturesque Powder Horn.

P R E C O R P N E W S6

his time and energy to Powder River Energy.

Bob Tarver was born in Sheridan, Wyoming, but has lived most of his life in Campbell County. He is a graduate of Campbell County High School and has a B. S. Degree in accounting from Colorado State University. After a tour in the US Army, he returned to Campbell County where he has been ranching since 1964. For the past 48 years the ranch has been serviced by an electric cooperative.

Bob Tarver was elected to the Board of Tri-County Electric Association in 1988. He served on that board and then was elected to serve on the Powder River Energy Corporation Board until 2009. His years of service on both boards totals 21 years. Bob was appointed to serve on the Wyoming Rural Electric Board as PRECorp’s representative from 2005 until 2009.

Bob is a statesman and is respected by his peers for his studied and thoughtful perspective. His experience provided guidance during many decisions and during many meetings.

Bob and his wife, Nancy, have three sons: Mike, Robert, and James. The Tarver family, including spouses and grandchildren, uses Powder River Energy electricity in their residence and on their ranch 56 miles north of Gillette.

“I’m lucky that my kids could come back and I’ve got the whole family, grandchildren, all here with me at the same place I’ve been most of my life,” he said.

Juggling ranch duties, grandchildren, and other family, Bob and Nancy still find time to both be involved in their community. “As a PRECorp

board member, you work with lots of people. Every member has a vote, individual members, small businesses, industrial, seasonal, you name it,” Bob said. Though Bob no longer serves on the PRECorp Board, he has vivid memories of what life was like before and after electrical service reached his ranch. “A lot of people wouldn’t be able to have the cattle back then if it wasn’t for electricity, what with drought and ponds and grazing. With rural electricity, I’ve got stock wells, electric fences, you name it.”

The first lines on the Tarver ranch covered more than one mile to a pump at a water well for livestock. It cost $12 a month. An oil company drilled wells which later provided water for the Tarver’s when the drilling operation was completed.

The steep hills and deep ravines on the Tarver ranch are examples of the rugged country PRECorp service touches. He drives a four-wheeler

to check the cattle and fences over a pine dotted landscape. “It’s beautiful country. You can see all the way to Montana,” he says with a smile.

Bob’s comments make it obvious that his family, his ranch, his community, and the co-op have always been close to his heart. When he talks about the “co-op family” he includes members and talks about memories of neighbors getting power, community events the co-op supported, enjoyable times at the 4-H livestock sales supported by PRECorp, Annual Meetings catching up with friends from across five counties. “I sure do miss it,” he adds.

“I really admired the employees of PRECorp and their dedication,” Bob said. “I’ve seen linemen after they’ve been out in a storm for 30 hours straight, just getting the lines fixed. They’re beat to a pulp. But they just keep going. It’s a tough job, but they fix it, getting the electricity back.”

Photo by Tim Velder, PRECorp.

The Earl Christensen Award is presented to Bob Tarver, right, at the 2012 Annual Meeting in Gillette, by Earl’s son, PRECorp Board Vice-president Walt Christensen, left.

tarver... From page 3.

P R E C O R P N E W S 7

Other Vendors included Team and Hole Sponsors:

Climate Solutions - Climate Solutions, LLC is locally owned and operated in Gillette. They offer heating and air conditioning products and service and repair on all makes and models as well as providing options for maximum energy efficiency when it comes to climate control. www.climatesolutionswyo.com Solomon Corporation - A family-owned business since 1971, Solomon Corporation offers comprehensive solutions for all transformer repair, maintenance, recycling, and disposal needs. They have 4 locations and 500 employees. www.solomoncorp.com Hubbell - Hubbell Incorporated engages in the design, manufacture, and sale of electrical and electronic products in the United States and internationally. www.hubbellpowersystems.com Kaddas Enterprises, Inc. – A family-owned business, Kaddas creates products which assist electrical companies in protecting migratory birds and raptors with avian protection products. www.kaddas.com Lancaster SML, LLC - Stephens, McCarthy, Lancaster, LLC (SML) serves electric utility customers in Alaska, California, Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming. The firm consists of three partners Chris Stephens, Kevin McCarthy, and Glenn Lancaster. They focus on substation, transmission, distribution, and communications products. www.stephens-mccarthy-lancaster.com/Cooper Power Systems - Cooper Power Systems is a global

manufacturer and provider of world-class power delivery apparatus and solutions for the utility, commercial, and industrial markets. www.cooperindustries.com Mountain States Utility Sales is a manufacturer’s representative serving the utility industry in the western region. www.msutilitysales.comKadrmas, Lee & Jackson – Founded in 1938 KLJ offers engineering services across the Dakotas and Montana. Today, KL&J is an employee-owned company which is loyal to the company’s founding principles: dedication to nurturing and building long-term client relationships and providing quality service. Today they operate in 15 offices across a five-state region.www.kljeng.com Baccari and Associates – Baccari & Associates, LLC (B&A) has been providing planning, engineering and project management services to the energy industry since its founding in 1981. Based in Sheridan, B&A provides a broad range of engineering and project management services, for projects including local utility substations and transmission lines. They provide services including project planning and permitting, engineering, construction, start-up, and commissioning. www.baccari.biz/Hamilton Associates - Since 1934 Hamilton Associates represents manufacturers of electric utility products whether directly to the end-user or through distribution channels. Their in-house staff, along with their outside employees, builds relationships between the

manufacturers and customers. www.hadenver.com Sundance State Bank - Serving northeastern Wyoming Since 1895, Sundance State Bank remains a locally-owned bank dedicated to serving the financial needs of northeastern Wyoming and is a strong supporter of communities. www.sundancestatebank.com Powder River Construction is a building company based in Gillette that provides industrial construction services to PRECorp.The Okonite Company - The Okonite Company was founded in 1878 and is a premier U.S. manufacturer of high quality insulated electric wire and cable, specializing in high voltage cable, medium voltage cables, and low voltage power, control and instrumentation cables. www.okonite.com Schulz Consulting – Schulz Consulting based in Denver, CO has assisted many organizations including electric cooperatives. Their services include training, resource talent development, organizational and leadership solutions, organizational development, meeting facilitation, evaluation development, and corporate coaching. www.schulzconulting.biz General Cable is a global leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty and communications markets around the world. www.generalcable.com

foundation... From page 5.

P R E C O R P N E W S8 ceo straight talk

M I K E E A S L E y , C E O

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

POWDER RIVER ENERGY

CORPORATION

In last month’s article I began to lay the groundwork of PRECorp’s restated Mission and Vision. I also suggested that you visit our website to look at PRECorp’s new Strategy Map. A video of my 2012 CEO Report from the Annual Meeting is also posted. In my report I introduced our restated Mission and Vision to our members in attendance and I began to describe PRECorp’s strategy for moving forward.

We have spent a lot of time and energy to lay out not only a strategy, but a plan to execute this strategy. It is not enough just to have a strategy. You must be able to execute the strategy as well. This is not as easy as it seems and companies that can actually execute on their strategy are more the exception than the rule. It is important that everyone in the company has a clear understanding of how their work contributes to the successful execution of our mission and vision, and I think our Team feels very engaged and aligned with our strategic goals.

There are a few things that I think are very important for you to understand about our Mission and our Vision. First, our restated Mission does a great job of capturing much of the original purpose that our founders established 67 years ago. This is reflected in the Mission by the statement that we will enhance the quality of life by providing leadership and service in our communities. Our original founders certainly embodied service and leadership in these early days and we are proud to continue to focus on that legacy.

There are two statements in our Vision that I would also like to highlight. The first statement has to do with involvement of our stakeholders. You as a member are the most important stakeholder we have and without

your involvement in the affairs of the cooperative, we simply will be unable to function as a cooperative. This was very evident in this year’s Annual Meeting since we were unable to achieve a quorum of 100 members in time to conduct our election. This is the first time in my tenure at PRECorp that this has happened. I hope that our renewed focus on Member engagement will ensure that we can attain a quorum at future Annual Meetings. Our director terms will be extended by one year and hopefully next year we will be able to conduct an election so that the cooperative governance process remains robust.

The other aspect of our Vision statement that I would like to draw your attention to is the statement that PRECorp will be an innovative leader through growth in territory, service, and membership. This part of our vision statement is to make sure that we continue to maintain our openness to opportunities for growth. Over the past decade we have been successful in growing our territory, our service, and our membership and we think that this is also an important part of our future.

We are currently looking at opportunities in Montana that have come up due the bankruptcy of a power supply cooperative named Southern Montana. There are some distribution cooperatives that could have significant hardship depending on the outcome of the bankruptcy process. We are hoping to leverage our relationship with Basin Electric, our power supplier, to help these cooperatives through these difficult times. Cooperatives were founded on the principles of neighbor helping neighbor, and our efforts to help our neighbors may also result in our ability to realize an important element of our vision by positioning PRECorp to grow in territory, membership, or services. As we have learned over the past decade, growth has been a good thing for our cooperative as it has helped us to maintain lower rates that would not have been possible without that growth.

Please tune in for more on this next month as we will continue to work on this situation while keeping you informed. I really hope that you have an opportunity to view the annual meeting address that is posted on our website and I look forward to our time next month.

• PRECorpwillbeaninnovativeleaderthroughgrowthinterritory,services,andmembership.• Wewillbestrategicallyalignedasweincreaseeconomiesofscale,leverageopportunitiesfor

diversification,andimproveteamengagement.• Wewillstrivetoinfluenceregulationandpoliticalpoliciesatalllevelsofgovernmentthroughinvolvementofourstakeholders.

• Wewillbeanexampleofexcellencetoourcooperativenetworkandwillbetheelectricalpowerserviceprovider,andemployerofchoiceintheregion.

precorp Mission Powder River Energy, your electric cooperative, will deliver high quality,

competitively-priced electric power and services to our member-owners, while enhancing the quality of life by providing leadership and service in our communities.

watch my 2012 annual Meeting report at www.precorp.coop/stakeholder-

updates