Sales down. Cloverland Electric wants to boost rates

NEWS RELEASE

CLOVERLAND ELECTRIC COOPERATIVE

************************* Cloverland Electric requests TIER rate adjustment From MPSC

LANSING, MI - (April 26, 2010) - Cloverland Electric Cooperative recently filed a request with the Michigan Public Service Commission seeking an adjustment to its electric rates under the commission’s TIER ratemaking rules.

The request is the result of a decline in 2009 electricity sales, and subsequently, reduced revenues.

If approved, the adjustment would increase electric rates approximately 6.4 percent.

For a residential account using 850 kwh of electricity per month, that would add approximately $6.44 to the monthly bill.

The TIER (Times Interest Earned Ratio) ratemaking procedure uses an objective mathematical formula to determine what electric rates should be.

Each year, Cloverland Electric and other Michigan electric cooperatives examine their rates using the formula.

If the formula suggests the TIER is either too high or too low, the TIER is adjusted as appropriate to fit within an acceptable range.

In 2009, Cloverland Electric did not achieve the minimum required TIER authorized by the MPSC.

As a result, the cooperative is seeking a rate adjustment to bring its TIER back into the approved range.

The TIER procedure was established to help electric cooperatives keep rates as low as possible while still ensuring they have the funds required to maintain a safe and reliable electric system and meet their financial obligations.

“The combination of a soft economy and increased conservation has reduced our energy sales and prompted this request,” said Dan Dasho, executive vice president and general manager of Cloverland Electric. “I want to assure our members that this filing is unrelated to our proposed acquisition of Edison Sault Electric. In fact, one of the biggest reasons we are pursuing the acquisition is to increase efficiency and help mitigate the need for future adjustments like this.”

Review of a TIER rate case by the MPSC typically takes four to eight months.

Rates will remain unchanged until the commission has completed its review and issued an order.

If approved, the change will apply only to those areas served by Cloverland Electric prior to the completion of its pending acquisition of Edison Sault Electric.

When the transaction is complete, all Edison Sault customers will become members of Cloverland Electric.

However, the cooperative will maintain separate sets of rates for the two systems for a period of time.

Established in 1938, Cloverland Electric Cooperative is a not-for-profit utility located in Michigan’s Upper Peninsula delivering safe, reliable and affordable electricity to approximately 19,500 homes and businesses in Chippewa, Mackinac, Luce, and Schoolcraft counties.

The cooperative is headquartered in Dafter and maintains district offices in DeTour and Newberry.

In addition to its principal electric business, Cloverland Electric operates Lighthouse.Net, a wholly-owned subsidiary providing broadband service to the Upper Peninsula.

For more information, visit here.

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