Millions of Americans Enjoy Affordable, Clean Electricity Because of the Successful Partnership Represented by the Power Marketing Administrations

and ConsumerOwned Utilities. More than 1,100 consumer-owned, not-for-profit utilities in 34 states rely on power marketed through the Power Marketing Administrations (PMAs) to help keep electric bills affordable. In the early years of the hydropower program, not-for-profit utilities entered into an agreement with the federal government. We agreed to buy the power at above market rates in exchange for a guarantee of continued access to power and a promise of lower rates over the long term. The partnership between PMAs and consumer-owned utilities enabled economic growth throughout the nation, pulling long neglected communities out of poverty. Coupled with the affordable electricity it offers PMA customers, that partnership continues to help maintain hundreds of thousands of quality jobs that might otherwise go overseas. That partnership remains intact today: Consumers continue to pay for the federal investment in hydropower, and the PMA structure ensures they retain access to reliable, affordable, and renewable hydropower. In addition to repaying all costs incurred to operate the PMAs, revenue from customers also ensures the ongoing success of other purposes of the system including flood control, recreation, irrigation, and navigation, among others. Without the PMAs, the federal government could not continue to operate these multi-purpose facilities without significant increases in user fees or taxes. DOEs Proposed Plan to Alter the PMAs Undermines their Success. Increases costs for consumers: The plan outlined March 16, 2012 by DOE would force PMAs to implement policies that are inconsistent with their primary purpose: the lowest possible rates consistent with sound business principles. The PMAs would serve as expensive laboratories to test Washingtons fluctuating energy initiatives, and PMA consumers who do not benefit from the policies would bear their costs. Threatens local control: Creating an Energy Imbalance Market will likely increase electric bills for consumers and undermine local control over power supply decisions. Violates the beneficiary pays principle at the core of this successful partnership: Requiring local ratepayers to subsidize the transfer of electricity out of the region will drain jobs and money from local economies. Represents Department of Energy overreach: DOEs proposals would significantly alter the PMAs statutory purposes without support from Congress and over the opposition of the PMAs long-time consumers. A Solution in Search of a Problem. PMAs and their federal power customers have already built robust regional transmission grids operated consistently with national reliability standards, led the

nation in integrating renewable resources into their systems, and promoted energy efficiency and demand response. The PMAs continue to explore creative new approaches to better coordinate with their customers and with neighboring systems and to further integrate new resources into their systems. PMAs have developed customer funding approaches unique to the needs of their regions without the need for outside third party financing. (Insert specific example for your region.) The approaches the PMAs have taken and continue to explore have been locally developed to ensure consistency with statutory obligations, efficient integration with local system requirements, and active customer support and participation. (Add specific project examples at your utility) PMA customers have extensive experience and long-standing track record of conducting forward-looking resource planning including the development of renewable energy, energy efficiency programs, and demand-side management programs that are based on careful consideration of the needs and best interest of their customers. The DOEs one-size-fits-all plan is far too broad and prohibitively expensive. Its nothing more than an unproven, untested and costly idea. A nationally directed policy would be unnecessary, costly, inequitable and inconsistent with the legal obligations imposed on the PMAs and the Secretary, and politically unsustainable.