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The State of WPPI Energy in 2009

Thilly reports continued strength

Roy Thilly, President and CEO WPPI Energy

WPPI Energy is the nonprofit power supplier for community-owned Sturgeon Bay Utilities. As a public power utility, we are member-owned and member-driven, which means that Sturgeon Bay’s citizens have a vested interest in how WPPI Energy is faring. Therefore, it is my privilege to summarize for you my recent annual meeting “State of WPPI Energy” address to members.

The past 12 months have been especially challenging for our member communities. As members continue to recover from the worst economic downturn since the Great Depression, WPPI Energy is focused on the need to control costs and provide excellent service while maintaining our long-term, strategic focus.

Fortunately, our shared strength – we now serve 51 communities in three states – and the unity of purpose and member participation that drive our joint action agency have put WPPI Energy in a very strong position today and going forward. The business plan our Board of Directors has developed provides the direction that enables WPPI Energy to act effectively to provide our communities with reliable, affordable power for the long term.

Three critical strategic decisions the Board has approved in recent years have positioned us with our members to provide excellent, competitive electric service for the long term.

First, one of our most important business plan objectives is to help customers use electricity much more efficiently and eliminate waste. Energy efficiency is the most cost effective solution for the long-term economic health and competitiveness of our communities, our region and our nation. In helping our customers save energy, we can:

  • Help customers keep their bills down
  • Defer investing in expensive new generation resources
  • Reduce our carbon footprint
  • Build our credibility with key regulators and legislators, and
  • Limit our future costs under impending greenhouse gas regulation.

Our decision to increase efficiency program spending by almost 300 percent over the last three years is helping all of our customers – large and small – cut waste and lower their energy bills.

Second, to meet Wisconsin and Michigan Renewable Portfolio Standard (RPS) mandates, which require that 10 percent of electric power provided to retail customers be supplied from renewable resources by 2015, we made the strategic decision to lock in 20-year renewable energy contracts early at favorable rates. WPPI Energy has resources in place now – six years early – to meet the RPS requirements. This will not only help lower costs, it will also help us manage whatever climate change regulations Washington, D.C. enacts in the next year or two.

Finally, we have carefully planned power supply resources to affordably and reliably meet members’ needs. We have sufficient resources in place to meet projected loads through at least 2020, providing us with valuable flexibility in a time of regulatory uncertainty. We are able to substitute beneficial new resources but we are not in the position of being forced to act at a bad time.

Our power supply is flexible, allowing us to take advantage of attractive, short-term market energy prices. In recent months, this has made a tremendous difference in helping offset upward cost pressures related to the economic recession.

Furthermore, our power supply will be among the cleanest and most efficient in the Midwest. Our strategic investment in the new Elm Road Generating Station will pay dividends for years to come. When these two units come online over the next 12 months, WPPI Energy’s generation fleet will position us well going forward, as older, less clean plants will face higher carbon regulation costs and the possibility of early retirement.

We also continue to work hard to provide leadership and have a seat at the table in policy and legislative arenas. Our engagement in our state capitols and Washington, D.C. this year has been predicated on one over-arching principle: protecting our customers. The Midwest relies heavily on coal to power our factories and offices, which makes us a carbon-intensive region. We must ensure that climate change legislation is shaped to mitigate costs to the maximum extent possible for Midwestern consumers and that our members have the tools they need to help customers through the transition ahead. We will continue to strongly advocate policies that work for our small electric systems and public power utilities.

Going forward, we must plan ahead for a carbon-constrained future. The electric industry is moving toward technological change on all fronts, from new renewable applications, energy storage, carbon sequestration and new nuclear plant designs to mechanisms that will give customers more control of their energy consumption. These research and development efforts are promising, but expensive. We must make the right choices, providing customers with new services while maintaining affordability.

At the end of the day, our shared strength and the collective leadership of our staff and our 51 members have put WPPI Energy in a good position to maintain the strong, locally controlled public power advantage that is so beneficial to our communities and to meet the difficult challenges ahead.

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Roy Thilly is President and CEO of WPPI Energy, a regional power company serving 51 customer-owned electric utilities. Through WPPI Energy, these public power utilities share resources and own generation facilities to provide reliable, affordable electricity to more than 192,000 homes and businesses in Wisconsin, Upper Michigan and Iowa. Sturgeon Bay Utilities is a member of WPPI Energy.

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