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Thank You, Roger; District 2 Director Needed

Cooperatives operate according to a set of seven core principles. One of those principles is Democratic member control. What that means is that we are governed by policy-driven initiatives set by a board of directors made up of member-owners. Member participation in electing that board of directors, as well as serving on the board of directors, are key factors in ensuring the cooperative is operated according to the expectations of our member-owners.

In the coming weeks, members of District 2 have a unique opportunity to help your cooperative by serving on its board of directors. Longtime director Roger Diehl has retired from the board after dedicating 40-plus years of service to Nodak, leaving a vacancy on our board. According to our bylaws, the remaining board members must appoint a replacement to serve in director Diehl’s position until the next election in April 2017. Accordingly, the board is asking interested parties to let their interest be known.

Your board of directors fulfills many vital roles for the cooperative that can be both challenging yet rewarding. Not only are they the ultimate decision-makers when it comes to setting the direction of the cooperative, they are also the local connection to the cooperative membership. Board members represent our eyes and ears throughout our service area. They bring back member concerns and suggestions, provide a local neighbor for you to discuss cooperative business with and represent your interests at the board table.

In the coming years, the co-op board and management will face many challenges working to provide reliable service at affordable rates while navigating the onslaught of new regulations and a push toward a carbon-constrained world. Your cooperative can only be as strong as the people who actively participate in it, so your board of directors is looking for someone with a strong commitment and a desire to help Nodak through the challenges that lie ahead.

If you are a Nodak member residing in District 2, meet the qualifications to be a director and want to help shape Nodak’s future, please let us know. Send us a letter expressing your interest and explaining your unique abilities for serving as a Nodak director. For more information regarding the requirements and process for submitting your letter of interest, refer to the notice on page 2 or go to our website at www.nodakelectric.com.

And finally, I want to express our heartfelt gratitude and thanks to director Diehl for his many years of service on our board and his unwavering support to Nodak Electric and cooperatives in general. He has been a zealous advocate for the betterment of our cooperative and his contributions to making Nodak what it is today will be a lasting legacy. Thank you, Roger.

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Facility charge explained

Undoubtedly, the most unappreciated and misunderstood part of anyone’s electric bill is the facility charge, the monthly fee that is there no matter how much electricity we use. From a rate perspective, it’s one of the most frequent things we get questioned about, so I thought I would use my space here to shed some light on this part of your monthly bill.

There are two basic components to most power bills – the fixed monthly charges and the charges that vary with how much electricity you use. Facility charges are the fixed part of the rate that is there to help ensure equity among ratepayers. If you think about your own property – whether it is a house, farm or business – you will realize that for each of them Nodak has made a significant investment to bring power to that location.

In addition to these site-specific investments to bring power to your home or business, there are also investments needed to serve everyone and are shared by the entire system. All this initial infrastructure cost must be somehow recovered in our rates and be constantly maintained to provide safe, reliable power to our members.

In addition to the electric infrastructure investment, there are a whole host of expenses we incur that have nothing to do with how much electricity each member uses. One very simple example: at the end of each month, we read your meter, calculate and audit your bill, and have it printed and mailed to each consumer. This is a relatively small cost, but illustrates that with some expenses, regardless of how much electricity you use, it costs approximately the same to perform this function for all members in each rate class. Because of this, we include those expenses in the facility charge for each of those rate classes.

If we didn’t include these costs in the facility charge, they would have to be included in the cost of power so Nodak could bring in the proper amount of revenue each month. If we used that approach, the average energy user would pay about the same as they do now, while those who use very little electricity would pay significantly less than their share of the fixed costs of operating the business, and large users would end up paying many, many times more than their fair share of those costs.

I like to think of it in terms of billing you for the power cost in one part of your bill and billing you for what it costs us to deliver the power in another area. The facility charge is meant to cover what it costs to deliver the power to you, and the rest of the charges are meant to cover the cost of the electricity we purchase on your behalf.

Obviously, the cost to deliver power to members can vary significantly. In high-density urban areas, we typically have multiple accounts fed off the same transformer, and we use much less distribution line per metering point than we would for a rural account that has its own transformer and significantly more dedicated distribution facilities. Conversely, some of our largest accounts have an entire substation dedicated to a single account because they have such large power requirements. For this reason, we have different monthly facility charges for the various rate classes based on the cost we incur to deliver power to members of that rate class, independent of how much power is consumed.

Consequently, urban accounts pay a lower monthly fee than rural accounts do, while commercial accounts require a higher monthly fee due to the more expensive metering and large transformers required for those accounts. All this is done in an attempt to bill each rate class an amount closely resembling what it costs to serve that particular rate class.

Hopefully, you can see that a lot goes into designing rates that are both fair and equitable among our members and between different rate classes. Nobody really likes the facility charge, but it is necessary to ensure we have rate equity.

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Staying Connected

When we gather to celebrate the 76th annual meeting of Nodak Electric Cooperative, you’ll see the theme chosen for our event is “staying connected.” As members of an electric cooperative, staying connected is an important notion. Staying connected with your cooperative by attending the annual meeting, participating in cooperative governance and using the latest technology to do business with your co-op are all ways to assist in ensuring Nodak provides the level and quality of service you desire as an owner.

Staying connected with the other member-owners of your cooperative through meeting attendance, political action committee membership and social media engagement brings us all together as a grassroots advocacy group that has strong influence with lawmakers in Bismarck and Washington, D.C. This co-op connection is an important resource for us as we continue to advocate on behalf of our membership to state and federal leaders and regulators.

In 2015, the EPA issued what’s being considered its most far-reaching environmental regulation ever, the Clean Power Plan. Enacted at the direction of the Obama Administration, the Clean Power Plan calls for reductions in carbon dioxide emissions from existing fossil fuel power plants averaging 32 percent across the United States. Each state was given a target level of reduction to collectively achieve the President’s goal. North Dakota was saddled with one of the highest reductions across the entire country at 45 percent! In light of the fact that more than 30 percent of the power we serve to our members already comes from renewable wind and hydroelectric resources, we feel this federal push away from coal goes too far. Nodak has always supported a resource mix that uses all of North Dakota’s bountiful natural resources in a thoughtful, deliberate way. That is why we continue to fight on your behalf and support the 28 states and dozens of others who are litigating this overly burdensome rule.

Another way we work on your behalf is our efforts to keep rates affordable through sound planning for the future. At the end of 2014, we embarked on a long-range plan to help stabilize your electric rates by creating a revenue deferral plan. Through this plan, $4 million was placed in an account to be used in future years to ease the effects of wholesale power cost increases. In 2015, our wholesale power provider put in place a 5 percent rate increase that would ultimately raise the cost of our wholesale power by $3.1 million in 2015. Half of the revenue deferred from previous years was brought back onto our operating statement in 2015 to help delay the need to pass along that wholesale rate increase to our members. Wholesale power costs make up 85 percent of our total operating costs, so being able to soften the effects of wholesale power cost increases is only possible through this long-term planning. Your retail cost of power from Nodak did not increase in 2015.

Technology continues to play a key role in our efforts to provide information and interaction with our membership. In 2015, we added the pay-by-phone feature where members have 24-hour access to account information and payment options right over the phone. We also added our interactive outage map to our web pages so in the event of service disruption, members with Internet access are able to assess the extent of the problem. These new features are just a few examples of how we continually strive to make connections with your cooperative easy and informative. For quite some time now, members have been able to view and pay bills online, sign up for services, read The Nodak Neighbor and much, much more. Of course, you can always pick up the phone or stop into our office and we will be happy to serve you the old-fashioned way – face to face.

The future looks bright for your cooperative. Although weather created a small dip in sales for 2015, we grew by almost 500 new services and our crews installed more than 210 miles of new line. Steady growth in our membership is the key to keeping costs in check. As costs escalate over time, the ability to share those among a larger, more diverse group benefits everyone. On behalf of the board and the staff at Nodak, we want to thank you for the opportunity to serve the membership and manage our growing cooperative.

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Nodak Electric Cooperative

Nodak Electric Cooperative is dedicated to being an efficient provider of quality electric service with leadership that demonstrates the highest regard for its members/owners.


To report an outage call
800-732-4373 or 701-746-4461

Nov/Dec 2016

The Official Publication of Nodak Electric Cooperative

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