May 3, 2012

The Honorable Norm Dicks Ranking Member Committee on Appropriations 2467 Rayburn House Office Building Washington, DC 20515 Dear Ranking Member Dicks: On behalf of the American Public Power Association (APPA), I would like to thank you for your support of Representative Rehbergs amendment to the Fiscal Year (FY) 2013 Energy and Water Development Appropriations bill to prevent the implementation of directives contained in a memo from Department of Energy Secretary Chu dated March 16, 2012. APPA is the national service organization representing the interests of over 2,000 publicly-owned, not-for-profit electric utilities in 49 states. As you know, the memorandum issued by Secretary Chu described several structural changes he intends to make to the federal Power Marketing Administrations (PMAs), the entities tasked with marketing hydropower from large, federal, multi-purpose dams. This memo, drafted without consultation with Congress or with the federal power customers who purchase the hydropower from the PMAs, largely comprised of APPA members and rural electric cooperatives, represents a direct threat to the structure of the federal power program. The federal power program has been highly successful and we wish it to remain so. Should the changes Secretary Chu describes in his memo be adopted, the costs to purchase federal power will certainly increase. Not only will this result in higher electricity rates, but Secretary Chus proposed changes could also cause a shift away from the beneficiary pays principle that has governed successful PMA operations for so long, and instead institute a system whereby approximately 40 million electric ratepayers would subsidize activities, such as wind development and electric vehicle deployment, for which they will receive no benefit. For these reasons, APPA members are particularly appreciative of the steps you took to ensure that the Fiscal Year 2013 Energy and Water Appropriations bill contained language preventing Secretary Chu from implementing the broad changes proposed in his March 16 memo. We hope that the timely actions taken by you and other Members of Congress will force Secretary Chu to slow down his aggressive plans for the PMAs. While he has not consulted with Congress or with PMA customers up to this point, we are hopeful that your actions will remind him of the need to do so from this point forward. Thank you for your help in protecting customers of the federal Power Marketing Administrations. Sincerely,

Mark Crisson President & CEO MC/WC