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The Power ofPARTNERSHIP

San Miguel Power Association, Inc. 2011 Annual Report

1 | SMPA 2011 Annual Report

2011 at-a-glance 2

Letter to the Membership 3Rube Felicelli, SMPA Board President Kevin Ritter, SMPA General Manager

Board of Directors and General Manager 4

2010 Annual Meeting Minutes 5 - 6

2011 Financial Statement 7 - 8

Naturita Pair Snags Free Energy Upgrades 9 - 10Low Income Weatherization ProgramBecky Mashburn, SMPA Communications Executive

Here Comes the Sun 11 - 12SMPA Community SolarBecky Mashburn, SMPA Communications Executive

2011 Rebate Round-up 12 2012 Scholarship Recipients 13

Our Loyal Employees 14

table of contents

Management Team

Kevin RitterGeneral Manager/CEO

Cal RutherfordManager of Finance

Terry DaleyManager of Engineering & Operations

Carla SpanglerManager of Administration & Human Resources

Steve ZamarripaManager of Information Technology

Brad ZaporskiManager of Member Services & Marketing

Toni BertorelloExecutive Assistant

Annual Report Layout & Design

Becky MashburnCommunications Executive

Contact Information

Mailing AddressPO Box 817 | Nucla, CO 81424PO Box 1150 | Ridgway, CO 81432

Street Address170 W. 10th Ave. | Nucla, CO 81424720 N. Railroad St. | Ridgway, CO 81432

Phone(970) 864-7311 | Nucla(970) 626-5549 | Ridgway

Toll Free Phone1-800-864-72561-877-864-7311

Hours of OperationNucla | M - TH; 7:00 a.m. - 5:30 p.m.Ridgway | T - F; 7:00 a.m. - 5:30 p.m.

www.smpa.com

[ ]on the cover...Students Halli Benasutti of Ridgway, Lindsey Stindt of Norwood and Megan Denno of Dove Creek take part in the Craig Station power plant tour during the 2011 Cooperative Youth Leadership Camp.

Every year, San Miguel Power partners with our statewide association, Tri-State Generation and Transmission and other Colorado cooperatives to enrich the lives of hundreds of high school stu-dents from Colorado, Wyoming, Kansas and Okla-homa. The students spend a week near Steamboat Springs, Colo., learning lifelong leadership skills and gaining a better understanding of electric cooperatives and their role in today’s world.

SMPA 2011 Annual Report | 2

Annual Kilowatt Hour Sales: 2001 - 2011

pedal power...A student learns just how much pedal power it takes to light up a row of bulbs. San Miguel Power partnered with the Pinhead Institute to bring the Durango Discovery Museum’s Solar Roller to our area schools to help teach students about electricity and where it comes from. [ ]

2011 at-a-glance

60employees

13,017members/meters

1,904miles of line

6.84members per mile

$0.13023residential kWh rate

195.6kWh sold in millions

835average kWh per

residence

112net metered accts.

1938year incorporated

7counties served

DoloresHinsdale

MesaMontrose

OuraySan Juan

San Miguel

46,482peak KW demand

Tri-Statepower supplier

Year

Kilo

wat

t Hou

r Sal

es


2011 was no doubt a year of successful partnerships for San Miguel Power. We paired up with the Clean Energy Collective to begin developing a one-megawatt community-owned solar farm. We launched an all-inclusive energy efficiency program with the International Center for Appropriate and Sustainable Technologies (iCAST). We worked with Housing Resources of Western Colorado and the Governor’s Energy Office to extend the impact of the Low Income Weatherization program – doubling the number of families in our territory who received free upgrades to their homes.

We built on our partnership with our local schools by providing free energy efficiency classroom tool kits for elementary teachers, sending outstanding high school students to leadership programs and awarding $14,000 in academic scholarships to graduating seniors. It’s partnerships like these that shape SMPA into a successful cooperative. They allow us to provide additional services that improve the quality of life in our communities.

In addition, we’re also proud to announce that SMPA accomplished many of the goals we set for ourself in the previous years. For example:

• We took the first step in improving the way we deliver power by investing in Advanced Metering Infrastructure technologies and installing advanced meters.• Our staff worked with our consultant to conduct an in-depth cost of service study to address member concerns regarding our demand rates and respond to the rising costs of doing business. This was just finalized in early 2012.• Our staff began working with a consultant to develop capital credit retirement and equity management plans for SMPA’s board to consider. These will be adopted in 2012.• We conducted a thorough operational analysis to improve the company’s internal efficiency, which has lead to improved communication and operational processes.• Our communication staff was again recognized nationally for the quality and content of our communication programs.• We helped members invest in and install their own renewable energy systems and now have more than 100 net meter accounts.• We expanded our power supply mix, adding 900 kilowatts of local hydro power from the Ouray Hydro. We also completed a contract with Idarado Mining Company to secure an additional 500 kilowatts from Bridal Veil Hydro in Telluride.• We are currently working with Tri-County Water and Tri-State to organize a purchase of up to seven megawatts of hydro energy from the Ridgway Dam by Tri-State.

We are proud of what San Miguel Power accomplished in 2011. We faced many challenges, but in the true cooperative spirit our employees overcame those challenges through compassion, determina-tion and the belief that what we do improves the lives of our members.The future will hold additional changes for San Miguel Power. Simply put, rates increased in 2012. And we’ll likely see more changes in the near future due to a number of reasons, including rising fuel costs, federal regulations and additional changes in the way we purchase wholesale power.

We will also continue our work to improve our operational efficiency and communication, both internally and externally. Our goal is to make your cooperative as efficient and effective as possible.Above all, we can assure you that the board of directors and employees of San Miguel Power will continue to work with your best interests at heart.

message to the members

Rube FelicelliPresident

Kevin RitterGeneral Manager

A Year of PartnershipsA message from your President and General Manager

Ken BarnesAsst. Secretary/Treasurer

District 1

Dave AlexanderDistrict 3

Michael SaftlerSecretary/Treasurer

District 4

Wes PerrinDistrict 2

Rube FelicelliPresidentDistrict 5

Marcus WilsonDistrict 6

Jerry HofferVice President

District 7

Kevin RitterGeneral Manager


board of directors & general manager

[ ]vroom vroom...SMPA Board President Rube Felicelli gets a crash course on driving a solar car from members of the Sunshine Mountain Travelers.

SMPA partners with the local high school group every year and helps send them to the national Winston Solar Car Challenge in Texas. It is the only high school solar car team in the state.


1. Call to Order: The 72nd Annual Meeting of the San Miguel Power Association members was called to order by Board President Wes Perrin at 10:00 a.m. at the Michael D. Palm Theatre, 721 W. Colorado Avenue, Telluride, Colorado.

2. Reading of the Notice of the Meeting and Proof of Publication and/or Mailing thereof: Secretary/Treasurer Michael Saftler advised members that the appropriate legal notices regarding the meeting have been published in all newspapers within the service territory. He advised members that the notices were available for inspection if a member so wished.

3. Determination of a Quorum: President Perrin announced that a quorum of at least 50 members is required to con-duct business. SMPA staff advised President Perrin that at least 50 members were registered and in attendance at the meeting.

4. Introduction of Guests: President Perrin introduced honored guests in attendance. The SMPA Board of Directors, the General Manager/CEO, and General Counsel were introduced.

5. Reading of the Unapproved Minutes of the 2009 Annual Meeting of the Members and the Taking of Necessary Action Thereon: The 2009 annual meeting minutes were published in the annual report. A motion was made and sec-onded from the floor to dispense with the reading of the minutes. The motion was voted and carried.

6. Treasurer’s Report: The treasurer’s financial report was detailed in the annual report that all members in attendance at the annual meeting were provided a copy of upon check in. A motion was made and seconded from the floor to forgo the reading of the treasurer report. No discussion was presented. The motion was voted on and carried.

7. President’s Report: President Perrin welcomed SMPA members to the 72nd annual meeting. He said the theme of the annual meeting “Together We Save” is also the current theme of Touchstone Energy and one of its latest programs. He explained that this message is behind every decision that the SMPA Board of Directors has made over the last couple of years. Through the use of energy conservation and efficiency measures, and the wise use of renewable energy – we can save.

SMPA members took part in an interactive poll. President Perrin asked general questions concerning SMPA and electric generation. Audience members submitted their response via a hand held remote control. The results from the audience were quickly displayed on the video monitors and screens. One of the questions in the poll described the motives of the Board of Directors pursuing the development of renewable energy in our service territory. Renewable energy develop-ments will help meet the requirements of our state renewable portfolio standard, the member survey results indicate that is what most of the members want, and renewable energy will provide long term economical benefits to our area. SMPA currently has thirty-two renewable energy programs. The members learned many other fun facts and information about energy efficiency, conservation, and generation.

General Manager’s Report: Kevin Ritter, General Manager/CEO opened the report defining the theme “Together We Save,” which focuses on energy efficiency and ways to help members save money and energy and how to use energy wisely. He added that his report will concentrate on SMPA’s commitment of having a strong company and the benefits of having an efficiently operating business.

Manager Ritter was pleased to report the cooperative is financially healthy and strong. The Nucla – Telluride project is in the second year of construction. SMPA will be putting in five miles of distribution and working with Tri-State to rebuild a couple of substations. A four-year construction work plan which outlines system improvement projects for the next four years has been completed. This plan aims toward meeting growth, maintaining system reliability and the system’s ability to meet the members’ needs. These are all indicators of SMPA’s commitment to our core business, which is providing safe and reliable electric energy.

annual meeting minutes


The smart grid task force has been moving forward with the advanced metering infrastructure (AMI) implementation plan. They are also studying and improving the supervisory control and data acquisition (SCADA) system.

SMPA is conducting an organizational analysis to evaluate operational efficiencies. SMPA is looking at hiring an outside firm to do a top to bottom efficiency analysis of the company by the end of 2011.

SMPA is continuing communication with members through monthly newsletters, website, Plum TV ads, and school programs. New programs added are community chats, member information updates, summer student workers, student career mentoring, and a holiday card contest. He reported the SMPA Annual Report that was generated last year has received national award recognition of excellence for the quality, content and layout of the program. He gave a special thank you to Becky Mashburn, Communications Executive, for the great effort and work that goes into the communica-tions program.

Manager Ritter reported on various rate issues. The time-of-use rate was implemented last year. There has been a lot of interest in storage heating. The use of storage heating is encouraged because it is very efficient, but it also sets a fairly high demand. The demand rate tariffs were formalized last year. Tri–State is looking into a wholesale rate structure change. In addition, SMPA will be doing an in-house rate study and retaining a rate consultant next year.

Manager Ritter reported on other items. SMPA offers several green programs and energy efficiency rebates including LED light rebates and appliance rebates. He also reported the change in the appliance rebates. Appliances eligible for the rebate must be replacing an old appliance. Proof of disposal of the old appliance is required to receive the rebate. The goal of this incentive is to reduce the amount of inefficient appliances on the grid. SMPA has signed an agreement with GEO for rebates on commercial and residential PV systems. SMPA has signed a contract with Ouray Hydro and is currently purchasing power from the facility. The Telluride Wastewater PV is online and offsetting energy at that loca-tion, as well as the Ouray Hot Springs Pool Hydro. Future hydro projects developing in the service territory include the Ridgway Dam Hydro and other plants in the Ouray, Telluride, Nucla and Naturita areas.

Manager Ritter thanked members for taking their valuable time to attend the annual meeting. He also thanked all em-ployees in attendance for their hard work and dedication to San Miguel Power Association.

8. Unfinished Business: None presented

9. New Business, Question and Answer Session: Questions were taken from the audience on the following topics: Online bill payments and automatic payment options, community solar farm proposals, residential and commercial kWh consumption and revenue comparisons, future load expectation, billing demand rate changes and communications, net metering return rates and true-up month changes.

10. Presentation of Scholarship Checks: Scholarship checks totaling $10,000 were presented to five graduating seniors in SMPA’s service territory. $2,000 in scholarships were presented to three graduating seniors, on behalf of Tri-State Generation & Transmission and Basin Electric.

11. Door Prizes: Miscellaneous door prizes were drawn. The grand prize was a $1,000 Marathon Water Heater gift certificate.

12. Meeting Adjourned: A motion to adjourn the meeting was made and seconded from the floor. The meeting was adjourned at 11:35 a.m.

june 4, 2011 | telluride, co


Statement of Operations

Revenues 2011 2010Residential $14,999,032 $14,692,822 Commercial $10,970,338 $11,014,259 Large Power Primary $0 $0 Irrigation $128,161 $127,476 Street Lights $60,792 $60,312 Other Revenue $167,975 $202,781 Total Operating Revenue $26,326,298 $26,097,650

Expenditures 2011 2010Cost of Purchased Power $13,681,785 $13,642,973 Transmission Expense $134,006 $141,962 Distribution Expense $4,324,362 $4,623,601 Consumer Accounting Exp. $1,419,113 $1,168,834 Consumer Service & General Expense $165,463 $255,919 Administration & General Expense $1,927,119 $2,047,680 Depreciation $2,224,718 $2,089,115 Tax Expense $0 $0 Interest Expense $1,243,014 $1,397,691 Other $309,919 $344,808 Total Cost of Electric Service $25,429,499 $25,712,583

Margins 2011 2010Operating Margin $896,799 $385,067 Non - Operating Margin $96,327 $247,858 Capital Credits $990,915 $1,143,706 Extraordinary Items $0 $0 Net Margin or Patronage Capital $1,984,041 $1,776,631

2011 financial statement

Where Your Dollars Comes From

Other - 0.64%Irrigation - 0.49%Street lights - 0.23%

$$$$$$$$$$$$$$$$$$$Res

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56.9

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Com

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41.6

7%


Comparative Balance Sheet

Assets 2011 2010Total Utility Plant $73, 094,000 $67,450,589 Less: Reserve for Depreciation $23,584,836 $21,929,813 Net Utility Plant $49,509,164 $45,520,776 Reserve Funds & Investments $17,046,933 $16,609,098 Other Investments $136,888 $140,916 General Funds $2,646,237 $3,258,913 Special Deposits $1,478,727 $275,109 Accounts Receivable $3,014,634 $2,952,255 Material Inventory $1,033,448 $962,736Prepayment & other Assets $112,547 $487,158 Total Assets $74,978,578 $70,206,961

Liabilities & Equities 2011 2010Total Equities & Margins $38,858,927 $36,884,885 Total Long Term Debt $26,433,387 $25,699,053 Notes Payable $0 $0 Current & Accrued Liabilities $5,755,179 $4,885,641 Deferred Credits $3,931,085 $2,737,382 Total Liabilities & Equities $74,978,578 $70,206,961

Where Your Dollars are Spent

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Naturita Pair SnagsFree Energy Upgrades by Becky Mashburn, Communications Executive


JoAnn and Menno Gripe live in a modest 1,280 square foot modular home in Naturita, Colo. From the outside it looks much like the rest of the homes in their neighborhood, but it’s what you can’t see that really makes a difference.

The Gripes were one of 42 families who participated in San Miguel Power’s Low Income Weatherization Program in 2011. The program was made possible through a partnership among SMPA, the Colorado Governor’s Energy Office and Housing Resources of Western Colorado. It provides free energy efficiency improvements to eligible low-income San Miguel Power members.

The Gripes received energy efficiency improvements such as duct sealing, a new window, insulation, a new refrigerator, exhaust fans and a programmable thermostat all for the low price of zero dollars. In addition, each home that qualifies for improvements is also evaluated for safety. The Gripe’s furnace was given a complete safety check and the home was equipped with carbon monoxide detectors – again, all at no cost to the couple.

“The changes made our home a lot more comfortable. We don’t feel drafts anymore, and we have peace of mind know-ing that things were done right,” said Menno.

The Gripes have lived in Naturita for well over 50 years, long enough to make them true locals. Menno spent his days as a miner and school custodian, while JoAnn worked in local cafes and cleaned houses. Their most important job was raising their two daughters, Tammi and Teri. And, although the couple is now retired they’re enjoying their current gig as full-time grandparents.

As is the case with many SMPA members, the Gripes under-stood the benefits of improving the efficiency of their home, but lacked the disposable income to make the changes.

“The more you do to cut back, the better,” said JoAnn. “We’re really proud of the improvements that have been made in our home. It’s done great things for us, and we want our friends and neighbors to know that it’s possible to make improvements. You just have to be willing to ask for help and sign up for the program.”

SMPA members who are qualified homeowners or rent-ers can apply for the Low Income Weatherization Program by contacting their local weatherization agency. Montrose, Ouray, San Miguel and Hinsdale County residents contact MADA, (970) 249-4774. San Juan and Dolores County resi-dents contact 4Core, (970) 259-1916. Mesa County residents contact Housing Resources, (970) 241-2871

cha-ching...Menno and JoAnn Gripe are saving energy and money after participating in San Miguel Power’s Low In-come Weatherization Program. Below the pair shows off a new window and programmable thermostat.

The program was made possible by a partnership among SMPA, the Colorado Governor’s Energy Office and Housing Resources of Western Colorado.[ ]

2011 financial statement


Here Comes the SunIn the fall of 2011 San Miguel Power announced its next big partnership which will ultimately bring clean, green and affordable energy to its members. SMPA teamed up with the Clean Energy Collective (CEC) of Carbondale, Colo., to develop a one-megawatt community-owned solar farm in Paradox Valley.

The solar farm is to be constructed on the northeast corner of the valley, approximately 15 miles west of Naturita, Colo. When finished more than 4,000 solar photovoltaic panels will blanket the arid floor of the valley, convert the sun’s rays to electricity and pump that power to local homes and business. It is estimated the farm will produce enough energy to power approximately 180 average homes continuously.

What’s unique about SMPA’s solar farm is the community-owned aspect. Members can buy into the farm by purchas-

ing their own solar panel from the CEC. This system al-lows members who may rent their home, have a poor solar location or cannot afford their own system to enjoy the benefits of local solar power. In addition, since CEC will own, operate and maintain the solar facility, the member incurs no operation or maintenance costs. They can simply sit back and watch their panel soak up the sun.

A member can purchase a 235-watt panel for $705. SMPA will then credit that member’s bill each month for the amount of power their panel produces.

CEC is currently taking reservations for panels. They work directly with members to determine how many panels fit with the members’ budgets and energy use patterns. CEC also offers interest-free financing for qualified members. To purchase a panel contact CEC at [email protected] or 1-888-208-5858.

by Becky Mashburn, Communications Executive

San Miguel Power offers a variety of rebates that help offset the cost of making your home or business more energy efficient. In 2011 we awarded the following rebates.

Rebate # Issued Total $Water Heater 16 $2,125Clothes Washer 83 $7,200Refrigerator 81 $9,820Dish Washer 90 $4,980Solar PV (residential) 27 $297,060

Solar PV (commercial) 5 $80,700Insulate & Air Seal 7 $3,402Home Energy Audit 10 $875LED Tube Lights 7 $2,100

Just by installing Energy Star appliances, our members saved more than 88,000 kilowatt hours alone. At our residential rate that’s $11,460 that stayed in our members’ pockets in addition to the money SMPA gave back in the form of rebates.

SMPA is offering similar rebates in 2012, and we’ve added even more. SMPA now also offers rebates for Energy Star LED light bulbs, duct sealing, residential solar hot water and small wind.

But none of these rebates would be possible without a strong partnership with our whole-sale power provider, Tri-State Generation and Transmission Association and the statewide non-profit organization Recharge Colorado.

Here Comes the Sun2011 Rebate Recap

[ ]our partners...


the hot spot...SMPA Service Planner Marvin Walisky shows off the selected site for SMPA’s Community Solar project in Paradox Val-ley.

The project will sit on the north side of U.S. State Highway 90 near the northeast corner of the valley. When complete, more than 4,000 solar photovoltaic pan-els will be pumping power to area homes and businesses.[ ]

2012 scholarships


San Miguel Power Scholarship: SMPA awards one $2,000 schol-arship to one graduating senior from each of our area high schools.

SMPA Scholarship RecipientsStudent School AmountAmanda Souther Norwood $2,000Alexis White Nucla $2,000Emily Fritz Ouray $2,000Halli Benasutti Ridgway $2,000Nikole Aikin Silverton $2,000Emy Ludwig Telluride $2,000

Tri-State Scholarship: Tri-State Generation & Transmission, SMPA’s wholesale power supplier, allows SMPA to award two $500 scholarships to academically deserving students from across our service territory.

Tri-State Scholarship RecipientsStudent School AmountCody Tatum Nucla $500Harley Narramore Nucla $500

Basin electric Scholarship: As a member of Tri-State, SMPA isalso member of Basin Electric Cooperative in Bismarck, ND. SMPA selects one student from across our service territory and awards a $1,000 scholarship.

Basin Electric Scholarship RecipientStudent School AmountHalli Benasutti Ridgway $1,000

Every year SMPA awards college scholarships

to students who are served by the cooperative.

The scholarships are awarded based on overall

academic performance, community involvement,

student need and a brief essay. Please help us

congratulate this year’s recipients. Amanda Souther

NorwoodAlexis White

Nucla

Emily FritzOuray

Halli BenasuttiRidgway

Cody TatumNucla

Emy LudwigTelluride

Nikole AikinSilverton

Harley NarramoreNucla

our loyal employees

Becky Holybee, Customer Service RepresentativeCortney Loyd, Customer Service RepresentativeKen Haynes, Key Accounts ExecutiveJoshua Hainey, Human Resources Assistant

38 YearsDavid Kelly, System Planner

33 YearsKevin Broderick, Service Planner Supervisor

30 YearsThomas Loczy, Meter Technician

25 - 29 YearsDuane DeVeny, Outside Services SupervisorRick Gabriel, Purchasing/Stores Supervisor

20 - 24 YearsPaul Enstrom, Operations SuperintendentSherry Spor, Accounts Payables AccountantScott Davidson, Journey Line Technician

15 - 19 YearsChuck Holecek, MechanicFrances Lendin-Graybeal, Customer Service RepresentativeClint Colson, Lead Line TechnicianClaude Barrett, Journey Line TechnicianShawna Sinks, GIS SpecialistLester Oltjenbruns, Meter SupervisorTammi Magallon, Plant AccountantMarvin Walisky, Service PlannerLeif Karo, Lead Line TechnicianDaniel Hubert, Journey Line Technician

10 - 14 YearsGay Carver, Billing RepresentativeCarla Spangler, Manager of Administration & HRKeri Kling, Customer Service RepresentativeDana Souther, Customer Service RepresentativeRenee Koski, CustodianMark Castle, Journey Line TechnicianGary Crawford, MechanicGrant Kennedy, Meter Reader

Jonathan Puderbaugh, Journey Line Technician Preston Joseph, Journey Line Technician Cal Rutherford, Manager of Finance & Accounting

5 - 9 YearsSteve Zamarripa, Manager of ITJohnathan Smith, Journey Line Technician Penny Gabardi, Customer Service Representative Mike Morlang, Journey Line TechnicianKJ Johnson , Journey Line TechnicianSam Purcell, Journey Line TechnicianBart Reams, Journey Line TechnicianEric Pottorff, Journey Line Technician Brad Boulden, Lead Line TechnicianBob Coulson, Facilities Maintenance TechnicianKim Nickolaus, Meter ReaderJackie Scherrer, GIS SpecialistPatsy Tankersley, Service PlannerColeman Summers, Journey Line TechnicianToni Bertorello, Executive AssistantTom McLeod, Journey Line Technician

0 - 4 YearsByrd Williams, Journey Line TechnicianDarcy Weimer, Journey Line TechnicianKevin Ritter, General Manager/CEOJeff Shea, Lead Line TechnicianBecky Mashburn, Communications ExecutiveBrad Zaporski, Manager of Member Services & MarketingMark Templeton, Meter ReaderAmy Sickles, Customer Service RepresentativeTerry Daley, Manager of Engineering & OperationsScott Reed, Journey Substation TechnicianBill Riley, Staff EngineerBecky Holybee, Customer Service RepresentativeCortney Loyd, Customer Service RepresentativeKen Haynes, Key Accounts ExecutiveJoshua Hainey, Human Resources Assistant


This report is printed on recycled paper. Please recycle it when finished.

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