2011 Annual Report

Welcome from the CEO

The National energy policy of the mid-1970s and 1980s encouraged utilities to use America's abundant coal reserves for generating electricity. The Federal government, as a matter of policy, discouraged use of imported oil and natural gas while encouraging coal combustion and nuclear fission for electricity production, and exploring the use of tar sands and oil shale, renewable resources, and coal gasification.

This was precisely the era during which rural electric cooperatives and municipal utilities – which had enjoyed preference in the use of hydropower generated at Federal dams – were told no new commitments would be made in development of additional hydropower projects. If they needed more electricity (and they did), they would have to produce it themselves. In response, consumer-owned utilities invested close to $40 billion in state-of-the-art coal-fired power plants, coal mines, and coal transportation facilities. During the same period, rail carriers and coal producers invested billions more to effectively tap America's most vibrant coal resource, the Powder River Basin of Wyoming and Montana, and bring them to market. Western Fuels proudly became part of that fuel chain in 1973.

Western Fuels is a cooperative enterprise operating on a not-for-profit basis to provide coal and other services for the generation of electricity by consumer owned utilities. Our member-owners are rural electric generation and transmission cooperatives, municipal utilities and other public power entities that, not unlike in the 70's, are diverse and progressive entities striving to provide low cost electric power to their respective customers.

During 2011 Western Fuels was responsible for the production and or procurement and delivery of over eighteen million tons of coal. We manage and operate three coal mines on behalf of our members, through agreements dating back as far as 20 years, and appreciate their continued confidence in Western Fuels as both a supplier of coal and as a partner. WFA utilizes coal from nearly every producer in the Southern Powder River Basin, manages a rail fleet of over 1800 rail cars and are well equipped to navigate the vagaries of the industry on behalf of our members.

As we look to the future Western Fuels is well positioned to expand the reach of our fuel chain management services to include new members from not just the public power sector but also to investor owned utilities and industrial consumers of coal. As circumstances change within our dynamic industry, Western Fuels can play an important and expanded role in providing comprehensive fuel chain management to coal consumers interested in cost effective and concientious alternatives.

We appreciate your interest in Western Fuels Association and welcome you to our website!

Duane Richards, CEO & GM