Now that the election is over, I want to use this forum to share some observations.  Up until 2002 only, the opportunity our members had to cast votes for the Board of Directors was to attend our annual meeting. Members that were able to attend the meeting showed up, listened to three minute speeches by each candidate, cast their ballot and the winners were announced.  While this process worked fine and successfully elected candidates each year, it produced a very small voter turnout.  In many cases, less than 10% of eligible voters participated in choosing directors.

In an effort to cast a wider net and engage a larger percentage of members in the election process, mail-in balloting began in 2002.  The addition of mail-in voting has certainly done its job in gaining a wider cross-section of member opinion. Over the last 10 years, voter participation has grown from as low as 2% to approximately 19% of eligible voters in this year’s election.  It has not come without some challenges, however.

There are two essential elements that need to be assured in an election – voter eligibility and voter intent.  Voter intent is generally pretty easy unless we want to talk about the hanging chads from the 2000 presidential election in Florida. Fortunately for us, we just need to have an election committee member look at each ballot, and it’s not difficult to determine the voter’s intent.

Voter eligibility is a different story.  The way we have historically assured ourselves that a mailed ballot came from an eligible voter is with a signature on the ballot itself.  That way we can determine that the ballot came from an eligible voter and that they have only voted once in the election. With the goal of enhancing confidentiality in the voting process, this year we changed to a different system where a  signature was required on the return envelope rather than on the ballot itself, and the ballot was placed in a secrecy envelope inside the return envelope.

Well, for one reason or another, this new process didn’t work out as planned.  Out of the 13,359 eligible voters on our system, we received 2,560 votes, or 19%.  However, 644 of these ballots were disqualified because the voter did not follow the instructions. The most common reason for these ballots not being counted was the lack of a signature on the return envelope.  As I described earlier, the signature is necessary under this system to ensure the ballot came from an eligible voter. Without that positive identification, we cannot honor the ballot.

I personally find this high number of uncounted ballots unacceptable for a number of reasons. Most significantly is because we had members who wanted to express their opinion, but their voice was unheard. We want your participation and input. That was the reason Nodak went to mail-in ballots a number of years ago. We did it to hear from a larger cross section of our membership and engage more of you in the election process.  While that did happen, there were a large number of members who put forth the effort to participate and the process failed them. That is something we need to correct. Our intention is to make the voting process easy, simple, and seamless. At the same time, we also need to ensure the integrity of the election. That is the challenge we have in the coming months.  Our intention is to research all of our available options and put forth the best solution for our membership. We want to work towards having every vote counted, and the board and staff are committed to using an election process that does just that.  Until then, thank you to those of you who participated in this year’s election and annual meeting, and again, congratulations to our new Board of Directors.

One of the exciting things we have to share with you is that Nodak reached a notable milestone in 2012. For the first time, Nodak sold more than 1 billion kilowatt-hours (kWh) in a single year, which represents a 3.7 percent increase in total kWh sold. We started the year with reduced sales from an abnormally warm winter, and also witnessed the closing of the ADM ethanol facility in Walhalla, N.D. However, robust increases in purchases by TransCanada and overall strong sales in the fourth quarter were enough to overcome the slow start.

While sales growth was a significant factor in a positive financial result for Nodak, that was not the typical case for the rest of the Minnkota system. In fact, nine of the 11
co-ops and all 12 municipals that comprise the Minnkota Joint System experienced losses in sales in 2012. In aggregate, Minnkota’s sales to Joint System members fell by 1.7 percent from 2011 to 2012.

The good news is that despite these losses our wholesale rate stabilized in 2012. The new Minnkota budget does not include a wholesale rate increase for 2013, and current projections for 2014 show a similar trend. With wholesale rates finally leveling off, we look forward to some predictability in our costs and therefore our rates.

After several months of careful planning and preparation, we deployed our iPad project in spring 2012. Each of our electrical teams was given an iPad with up-to-date maps of our system and member account information. This innovative use of technology allows our line personnel to access real-time data, enhancing their ability to manage outages as well as streamline many of our processes so we can provide better service to our member-owners.

This constant evaluation of our business practices and scrutiny of our cost of operation is what allows us to be successful on such thin margins. Only a dozen years ago our cost of wholesale power accounted for 58 cents of every dollar our members paid to Nodak. In 2012, 83 cents of every dollar was sent to Minnkota for wholesale power, leaving only 17 cents for the rest of our operation. Finding ways to meet your expectations more cost-effectively is one of our highest priorities here at Nodak – right behind keeping our line crews safe and keeping the lights on.

Another notable event in 2012 was the energizing of the Devils Lake East End Outlet. In June, the massive outlet that consists of five large pumps and a 5-mile pipeline began pumping Devils Lake water into the Tolna Coulee. These pumps will help ease the decades-long flooding that has finally started to show signs of letting up.

Another bright spot for Nodak in 2012 was the continuation of our business relationship with TransCanada and the Keystone pipeline. We saw significant increases in kWh sales during the year to TransCanada, which is now our largest member and represents almost 20 percent of our total sales volume.

From a distribution perspective, I would say 2012 was an excellent year. We accomplished all of our goals with respect to system improvements and line maintenance and our off-peak heating program continues to provide financial benefits to our members.

We encourage you to review the accompanying financial statements along with the report from Secretary-Treasurer David Hagert. We hope you’ll agree that Nodak ended 2012 in sound financial position and that we fulfilled our mission throughout the year by efficiently providing you with quality electric service while keeping you, the member-owner, in the highest regard.

On behalf of the entire Board of Directors and all the employees at Nodak, we want to thank you for your patronage in 2012 and for the opportunity to serve you. We hope to see you at our annual meeting at the Alerus Center in Grand Forks on Thursday, April 11, 2013.

MarApril 2013 NN AR_Web

Hopefully, by now, you have noticed a couple of entries in this issue of the Neighbor on the subject of the upcoming board election. Every election is an important one because it’s your chance to appoint the leadership of your cooperative, but this election holds something that is fairly uncommon, at least here at Nodak. Two of the three director positions decided in this election will not have an incumbent in the race.

We have three districts in our service territory with three directors elected from each district for a total of nine board members. All board members are elected for staggered three-year terms, so each year we have one position in each of the three districts up for election. This year, we have the unique situation where two directors are retiring from service on the board and not seeking reelection.  District 1 Director Bruce Fagerholt and District 3 Director Donna Grotte have both made it known that their intention is not to seek reelection to the board of directors. Director David Kent will be running for reelection to his seat in District 2

Your board fulfills many vital roles for the cooperative.  Not only are they the ultimate decision-makers when it comes to policy-driven initiatives for the cooperative, they are also the local connection to the membership. Board members represent our eyes and ears out in the 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.

If you have ever considered serving your cooperative through board governance, those of you living in Districts 1 and 3 have a unique opportunity. While board membership can be very challenging at times and certainly shouldn’t be taken lightly, it can be a very rewarding experience. Your cooperative can only be as strong as the people who actively participate in it, so if you have a strong commitment to Nodak and a desire to serve, I would encourage you to consider running for a seat on the Nodak board.  A position on the ballot can be obtained through nomination by the Nominating Committee, or by submitting a petition to the corporate offices. Please call the Grand Forks office if you would like more information on the process.

Also, please take note of the changes we’ve made to this year’s Annual Meeting.  For quite some time, the Annual Meeting has been held on the morning of the first Saturday in April. This year, we are moving the meeting to a Thursday evening. I know how schedules can be difficult to coordinate, especially with today’s busy lifestyles. Undoubtedly, moving the meeting to Thursday night will make it difficult for some that usually attend, but hopefully it will also open the door for others to attend that have not been able to come on Saturday.  Most importantly, we want as many of you as possible to come and participate in the Annual Meeting this year.  I’m looking forward to seeing you all in Grand Forks this April.

JanFeb 2013 NN_Web

NovDec 2012 NN_Web

A natural first reaction when seeing this kind of devastation is one of disbelief. It’s hard to comprehend the enormity of the job that lay ahead for those involved in the cleanup.  It will be days before line crews get power restored, weeks before transportation is running adequately again, months until the debris is all removed, and probably years before life returns to normal in that part of the country.

One thing is certain when it comes to these types of disasters – the cost of rebuilding critical infrastructure is almost always too great for the local entities to withstand without the involvement of the Federal Emergency Management Agency (FEMA). FEMA assists in returning destroyed areas to pre-disaster condition. Without this federal assistance, 100% of the cost of the recovery would be funded by local taxpayers, businesses, and utility ratepayers.

FEMA has been involved in assisting local not-for-profits like Nodak for decades.  When we have had major storm damage, FEMA has assisted in the cost of reconstruction, thereby lessening the burden on our members. Like a lot of federal programs, improvements need to be made in the delivery of FEMA’s mission during and after presidentially-declared disasters. In fact, I would argue that in many respects, FEMA needs to be retooled and overhauled. However, FEMA’s public assistance program delivers much needed assistance to electric cooperative consumers restoring electric services and it needs continued funding and support from our federal government.  Without it, those of us living in disaster-prone areas would face additional burdens of longer waits for service restoration and most certainly higher rates.  As the election passes and a new congress takes over, encourage your elected leaders to pass a federal budget that continues strong support for this important mission.  Without it, recovery from these natural disasters would be almost impossible.

Our hats are off to the many volunteers giving their time to rebuild the devastated areas of our country. A special thank you and congratulations goes out to the many brave men and women that braved the storm, floods, fires, etc. to protect our fellow citizens and help restore their lives to normal.  Much of this work is done in horrible conditions and without any fanfare, but their efforts are greatly appreciated.

Young or old, rich or poor, the election will have an impact on all of us because it will determine who sets the policies that shape our daily lives. Some of their decisions affect us directly, like tax or energy policy, and some are more indirect like environmental regulations. Collectively, these decisions made by our elected officials determine the environment in which we live and do business. You would think that every eligible voter would want to share their opinion about whom they want making those decisions on their behalf, yet almost half of us won’t cast a ballot this November.

Voting is often referred to as our “civic duty” and speaks to the idea that it’s our future, so we need to play a part in shaping it. Voting is our chance to do something to benefit our society through the democratic process, but it doesn’t stop there.  What’s equally important is what we do to engage in the political process after the election.

Once our elected officials have been chosen, they need to hear our concerns.  Elected officials run for office, not for fame and fortune but because of a strong desire to help mold the future. They can only do that effectively if they know what the people they represent want.

I would like to encourage everyone to embrace their duty to participate in the political process as an opportunity to be part of building the environment in which we live and work. Thomas Jefferson said, “We do not have a government by a majority of the people, we have a government by a majority of the people who participate.”  Be a part of your own future by calling your senator, writing your city council member, or visiting your co-op’s board members.  They’ll listen to your concern and value your feedback, and in the long run we will have elected officials doing the will of the people rather than what they think may be the will of the people.

SeptOct 2012 NN_Web