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Electrical
Service
1.
GENERAL Henry
County REMC, a consumer-owned electric
cooperative, provides electrical service to the New
Castle Henry County Industrial Park. The REMC is a
member of the Hoosier Power Network. Hoosier
Energy Rural Electric Cooperative, Inc., owns two
coal-fired plants that represent the largest
percentage of "scrubbed" generation in the
state of Indiana. As such, Hoosier Energy Power
Network members will not be adversely affected by
the implementation of Clean Air Act provisions
effective 1995 and 2000. By comparison, many
Midwestern utilities have filed for rate increases
to comply with these requirements. The
Network's two power plants provide sufficient
electric production capacity to supply the baseload
needs of member systems into the future. Since
Hoosier Energy does not foresee the need to
construct expensive new baseload generating
capacity, power network customers enjoy the comfort
of stable rate projections well into the foreseeable
future. In
fact, in addition to members' systems' needs,
Hoosier Energy sells over 500 megawatts on wholesale
contract to other electric utilities in the east and
Midwest. These sales help reduce the base costs for
facilities which are charged to customers. As
demands increase and these contracts expire, Hoosier
Energy is positioned to reallocate some of the
capacity to its members systems to meet customers'
growth needs, as well as to continue to sell
contract wholesale power, thereby continuing to
maintain a low cost basis charged to customers. 2.
ELECTRICAL RATES
A.
Economic Development Rate #3
The Hoosier Energy Power Network offers a six-year
contracted incentive rate (Economic Development Rate
#3, or EDR) which lowers and guarantees demand rates
for a six-year contract term for customers meeting
minimum demand (500kw) and load factor (45%)
requirements. This six year term is the longest
incentive rate term among Indiana electric
utilities. Hoosier
Energy will provide electric rate estimates upon
request for given electric load and usage
characteristics. B.
Industrial Power Tariff
Effective October 4, 1994, the Indiana Utility
Regulatory Commission (IURC) approved an option
wholesale Industrial Power Tariff for Hoosier Energy
member distribution systems. This tariff allows
Henry County REMC to file a retail rate tariff with
IURC, based on the costs of serving a specific
customer, such as the proposed distribution center,
under the optional wholesale tariff. This retail
filing is expected to be accomplished on a 30-day
basis. Again,
upon request, Hoosier Energy will prepare electric
rate estimates given electric load and usage
characteristics. Power
Factor Correction. Customers whose power factors
are less than 935 are assessed additional demand
charges on the power bill under either the EDR or
the Industrial Power Tariff. This assessment is
calculated by multiplying the metered demand times a
factor of .93, divided by the average monthly power
factor. C.
Scheduled Fuel Cost Adjustment Reduction
Due to increased efficiencies in purchasing fuel,
the Hoosier Energy Power Network is scheduled to
reduce its fuel costs effective August 1995. This
adjustment will be applied equally to the wholesale
and retail rates, resulting in a reduction, already
scheduled and approved, of approximately $002 per
KWH. D.
General Wholesale Rate Reduction
In addition to the Industrial Power Tariff, Hoosier
Energy received approval from the IURC for an 8%
general wholesale rate reduction effective October
1, 1994. The impact on retail rates will vary
depending on a number of factors, but is generally
anticipated to result in reductions ranging from
approximately 3% to 5% over previous Henry County
REMC rates. These reductions, while not affecting
the EDR or the Industrial Power Tariff, will provide
electric rate reductions to customers who do not
qualify for the incentive of large power tariffs.
They further demonstrate the downward pressure on
rates for Hoosier Energy Power Network members, in
direct opposition to many industry trends.
3.
SITE DEVELOPMENT ASSISTANCE In
addition to the electric service advantages of Henry
County REMC, the Hoosier Energy Power Network is
prepared to assist in site readiness by
participating in the costs of Phase I Environmental
Reviews and soil boring tests to determine a site's
suitability for development. These might include
soil compaction, load bearing capability, and
permeability testing. These services will be offered
by Henry County REMC in response to your intent to
purchase and develop specific site(s) pending
favorable environmental and geotechnical conditions. Return
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