Ken Anderson

Executive Vice President/General Manager

Winter 2012

2011 a productive, successful year

As we enter a new year, I wanted to take a moment to look back on a solid year of accomplishments made possible by our dedicated board, staff and membership, and look forward to 2012.

Last fall, Western Fuels-Colorado — a fuel supplier to and subsidiary of Tri-State — purchased the Colowyo Mine in northwest Colorado, where Western Fuels-Colorado already delivers coal produced at the mine to nearby Craig Station. The asset ownership ensures a reliable and stable supply of fuel for the life of the plant, which plays a key role in keeping rates affordable to our member systems.

We also completed the purchase of a 272-megawatt natural-gas fired, combined-cycle generating facility in Fort Lupton, Colo. This plant will help meet our need to add intermediate generation and provide important load-following capabilities in a high-growth area of our system.

Tri-State’s generation fleet recorded an exemplary year. In all cases, Tri-State’s generating units exceeded industry standards for unit availability, while our plant and field location workforce recorded improved safety performance at many of our sites. I believe Tri-State is well positioned to meet the growing energy requirements of our membership as we continue to mature the programs and processes that we have in place. At Craig Station, the largest facility operated by Tri-State, turbine efficiency upgrades and other improvements have resulted in increased production without increased fuel consumption.

On the renewable side of our generation portfolio, 2011 marked the first full year of operation for the 51-megawatt Kit Carson Windpower Project in eastern Colorado and the 30-megawatt Cimarron Solar Facility in New Mexico. Both of these generating sites, from which Tri-State holds long-term power purchase agreements, significantly exceeded performance projections during the year. We continue to support — through our board policies — the many new local renewable projects that our members have brought on line during the last several years, including the first landfill gas plant to serve one of our member cooperatives.

In our continuing effort to meet the growing load requirements of our membership, Tri-State maintenance crews and contractors have been engaged in numerous transmission and substation projects throughout the association’s 200,000 square-mile power delivery system. Tri-State also is working closely with all of our members who have chosen to participate in the asset transfer of all or a portion of their 100-kilovolt and greater facilities to Tri-State ownership. This undertaking will ultimately transfer up to 260 transformers and 500 miles of transmission line to Tri-State, which will better standardize our system and more effectively manage federal regulatory compliance rules.

Additionally, member system co-ops received $20 million in capital credits from Tri-State, marking the 23rd consecutive year that the G&T has returned capital credits to the membership.

Going forward, we continue to address the threats that could limit future fuel choices as we plan for new resources or could even threaten our ability to provide affordable power from our existing fleet. That is why we aggressively are investing in new technology and support the “Keep Electricity Affordable” campaign aimed at raising public awareness of how misguided regulations could affect our valuable product and hurt rural economies.

We will also work closely with our membership as we prepare for a new rate design in January 2013, and as we develop the energy products and services that will help our member-owners to better manage electricity use.

Working together across our cooperative family, I believe Tri-State is well positioned to meet the growing energy requirements of our membership.

Updated: January 12, 2012