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WE ARE LEADING THE WAY IN ENVIRONMENTAL STEWARDSHIP. A REPORT FROM MANAGEMENT.The past year has Additionally, our generating facilities are among the been marked by significant challenges, important most reliable in California. Our Geothermal plant opportunities and remarkable accomplishments for operates at 99%availability. NCPA.As we look to the future with regard to envi- ronmental responsibility and meeting the needs of This year, NCPA was recognized by rating agencies our members' customers, NCPA continues to dem- for its stability and proactive management which onstrate vision, leadership and accountability that led to firming of our credit rating from Standard has been the hallmark of our successes and paves and Poor's and Fitch ratings.Also,we have worked the way for the future. to recover $2.4 Million through the successful reso- lution of settlement disputes with the California Working through joint action we continue to lead Independent Systems Operator. the way in environmental stewardship.We are mak- ing new investments in clean renewable resources This has been a year of success and accomplish- to complement our already 96% carbon free gen- ment. All we do to meet the demands of today's eration portfolio. We have begun plans for a new electricity industry and the needs of our project owners is guided by one central purpose, serving state-of- the-art clean, natural gas energy plant to be built near Lodi, California. While exploring re- the customer. Every day we work to ensure that newable opportunities, this will help meet our growing demands, promote reliability and ensure price stability for NCPA project owners while employing the latest environmental technologies. NCPA member utilities have been making vital energy efficiency gains 1 by promoting solar energy. We are leading the way with our overall ; renewable portfolio of 67% and growing. NCPA's Commissioners have had a long re- our member/owners receive reliable, affordable cord of environmental stewardship and we continue and clean energy that is vital to the success of their to set the bar high for the future. We have worked communities. with State Leaders to ensure that California is the first to shape policies to manage Climate Change. Certainly, 2008 will bring new opportunities, chal- lenges. We are confident that through joint action We have operated our generation facilities with re- we will achieve even greater accomplishments and markable safety records and thanks to the hard work deliver sustainable value. of the men and women who operate our plants we are approaching one full year without any on the James H. Pope, NCPA General Mananger job injuries, one of the best records in the industry. Patrick Kolstad, 07-08 NCPA Chairman, City of Santa Clara