In August 2005, The Energy Policy Act of 2005 (EPAct) became law. The law seeks to encourage energy conservation and efficiency, to improve electric reliability, and to promote alternative sources of energy. EPAct added five new federal standards to the Public Utility Regulatory Policy Act of 1978 (PURPA). As a nonregulated electric utility, PEC was required to consider the five new standards in light of the three purposes stated in PURPA. The PURPA purposes are to encourage conservation of energy supplied by electric utilities, to encourage optimal efficiency of electric utility facilities and resources, and to encourage equitable rates for electric consumers. Following public notice and a hearing, PEC was required to make a determination based on its findings and upon the evidence presented at the hearing.

The text of the Energy Policy Act of 2005 may be found on PEC's web site, at www.pec.coop. You may also request a copy of EPAct in person at PEC headquarters located at 201 South Avenue F, Johnson City, TX 78636 (headquarters) or by calling headquarters at 1-888-554-4732. The requested copy will be provided for a nominal fee.

As part of the consideration process, PEC hosted a hearing so that its members had an opportunity to participate. Following the hearing and submission of comments, PEC made a determination in writing for each of the five new standards based upon its findings and upon the evidence presented at the hearing. If PEC declines to implement a standard, it will explain its reasons for doing so in writing. The final determination is posted on PEC's web site and is available at its headquarters. You may request a copy of the final determination for a nominal fee.