From: Kenneth Winder [mailto:kwinder@mleainc.com]

Sent: Sunday, November 06, 2011 11:35 PM

To: Robert Berman

Cc: Corkran, Jerry L; Christopher Bolduc; Richard Parker; rick.anderson@faypwc.com; tballo@earthjustice.org; ScottB@lvmetals.com; john.caskey@nema.org; jo hn.cymbalsky@ee.doe.gov; adelaski@standardsasap.org; Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; rgreeson@federalpacific.com; bruce.r.hirsch@bge .com; jhodge@howard.com; mhyland@appanet.org; dave.millure@metglas.com; snadel@aceee.org; wes.pa tterson@us.abb.com; Eric.Petersen@aksteel.com; Raymond.Polinski@atimetals.com; artrosenfeld@g mail.com; srosenstock@eei.org; rroy@nrdc.org; robert.saint@nreca.coop; chuck.simmons@ pgnmail.com; Daniel.Cohen@hq.doe.gov; greg.coulter405@gmail.com; Jim.creevy @nema.org; ahofmann@publicpower.org; pkumar@publicpower.org; jmauer@standardsasap .org; Meyers, Aaron; jrossetti@mlgw.org; Paul.Ryan@hitmet.com; jerry.schoen@aksteel.com; bsmith@federalpacific.com; mwaltner@nrdc.org; Brian Coffey; kcoughlin@lbl.gov; brenda.edwards@ee. doe.gov; jeremiah.freem an@ee.doe.gov; Caitlin Johnson; Zhimei Luo; emily.marchetti@ee.doe. gov; Michael Rivest; gjrosenquist@lbl.gov; charlied@uus.org; phopkinson@hv olt.com; James.Lass@cleco.com ; maheshsampat@bellsouth.net; DYoung@energy-solution.com; chad.kennedy@us.schn eider-electric.com; eduardorobles@eaton.com; vijay.tendulkar@onyxpower.com; thomas .patzner@us.schneider-electric.com; carlosgsiqueiros@eaton.com; Raba, Jim Subject: Re: A Note on Pole Change Out Cost:



### Robert: We are a Cooperative and therefore, we must borrow our money from various approved sources. At the present time, we do not borrow from the Rural Uti lities Services of the Federal Government. We borrow from the Cooperative Fina nce Corporation. That is their current rate. We do not issue bonds as a municipa l utility might do as a source of funds.

Ken On 11/6/2011 6:27 PM, Robe rt Berman wrote:
Ken,

Does your Coop really issue 7% bonds? What's your rating? Can you put my email on your distribution list for your next issue?



### Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)
BermanEconomics@gmail.com

### On Nov 6, 2011, at 7:40 PM, Kenneth Winder wrote:

Jerry and Committee: At our Cooperative, we use Western Red Ce dar and try to get 60 years from a distribution pole. We can achieve that because of the type of wood that is available and the climate in the

Rockies. That is not the same in other parts of the country. Ot her utilities can re spond with their experience.

We use 7% as our current cost of m oney in our economic studies, if we are borrowing.

Ken Winder

On 11/6/2011 2:40 PM, Cork ran, Jerry L wrote:

Knowing not too much about pole life, I would expect the poles will last about 60 years provided the

transformer weight and wind profile does not increase.



###  Would some of the utility people who have knowledge about give us an estimate of the typical
pole life?



###  Does the pole life vary across the country from the wet to the dry regions?



###  Also the utility person is requested to comment about what is their cost of money.



###  Is the 7% cost of money about right as we have suggested?

Regards,

Jerry Corkran

Jerry

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Sunday, November 06, 2011 12:23 PM

To: Christopher Bolduc

Cc: Richard Parker; rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@lvmetals.com ; john.caskey@nema.org ; Corkran, Jerry L; john.cymbalsky@ee.doe.gov ; adelaski@standardsasap.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; rgreeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; mhyland@appanet.org ; dave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ; Raymond.Polinski@atimetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; BermanEconomics@gmail.com ; Daniel.Cohen@hq.doe.gov ; greg.coulter405@gmail.com ; Jim.creevy@nema.org ; ahofmann@publicpower.org ; pkumar@publicpower.org ; jmauer@standardsasap.org ; Meyers, Aaron; jrossetti@mlgw.org ; Paul.Ryan@hitmet.com ; jerry.schoen@aksteel.com ; bsmith@federalpacific.com ; mwaltner@nrdc.org ; kwinder@mleainc.com ; brian.coffey@navigant.com ; kcoughlin@lbl.gov ; brenda.edwards@ee.doe.gov ; jeremiah.freeman@ee.doe.gov ; caitlin.johnson@navigant.com ; zhimei.luo@navigant.com ; emily.marchetti@ee.doe.gov ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; charlied@uus.org ; phopkinson@hvolt.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; DYoung@energy-solution.com ; chad.kennedy@us.schneider-electric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schneider-electric.com ; carlosgsiqueiros@eaton.com ; Raba, Jim Subject: A Note on Pole Change Out Cost:

### Hi Chris,

A quick note on the nature of pole change-out costs, and to what extent efficiency increases are

cost-causitive.

Poles do not last forever. They have a limite d life. Indeed, many utilities are replacing / reinforcing older wood poles as part of a general infrastructure improvement program. Commonwealth Edison is currently replacing 15,000 poles for just this purpose, according to Terry Donnelly, the Exec. VP for Operations.

While an increase in efficiency may hasten the change-out, under some conditions, it is not costcausative of a pole change -- only of moving that change forward in time. For example, if a pole required replacement this year anyway, and there was a more efficient transformer to be installed, one would not suggest the transformer was responsible for the change. More generally, if a pole change were required 10 years earlier than ot herwise due to a heavier transformer, the cost would be the time value of money over the 10 year period, not the full cost of the pole. This time value of money should subject to sharing for the likelihood of a joint pole cost sharing arrangement, and included at its exp ected value (as you are currently doing).

Hope this helps.



### Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)
BermanEconomics@gmail.com