May 2008

Rising to the Challenge
Looking out for you

At Connexus Energy's annual meeting, Board Chair Peter Wojciechowski (pictured right) addressed the issue of proposed climate change legislation, its impact on electric rates, and the challenges we face.

"Electric utilities nationwide are facing a time of rising power prices. Three things are contributing to this situation. On the one hand, we are running out of generation capacity. We need to build
additional generation in order to meet the needs of our customers. At the same time, the Department of Energy tells us that over the next 25 years, we can expect the demand for electricity to increase by some 40 percent over where it is today. A shortage of capacity, a huge increase in demand - that's difficult enough. Then, when you add the other ingredient, namely - climate change legislation - imposed by federal, state, and local governments, it becomes a very complicated situation.

Some see renewable energy, as well as postponing or barring the construction of new power plants, as the answer to reducing carbon dioxide emissions. Others urge to reduce demand through energy-efficiency programs. Connexus has long embraced both renewable resources and energy-efficiency programs. However, these options are only a small part of the solution. And, unfortunately, there is no single, inexpensive, quick-fix solution.

The cost of climate change is expected to be significant. Pending federal legislation, commonly referred to as the Lieberman-Warner bill, would raise electric rates by as much as 150% in the long term. Other federal and state proposals could also have a huge impact on electric utilities' costs. With all the talk about carbon taxes and energy and conservation mandates, price increases are inevitable. And, those increases won't be small.

So what are we doing? Connexus Energy, along with hundreds of other cooperatives around the country, is working to get governments to consider the impact climate change legislation will have on our customers. We support legislation that will balance consumers' electric bills, the health of the economy, and the needs of the environment. Connexus' rates are still among the lowest in Minnesota. We want to keep it that way. We will be looking out for you to make sure that you are not forgotten in these challenging times."