Looking ahead at the Year 2007

January 2007

In a couple of months, we will be publishing our 2006 Annual Report. Along with the financial statements, we will be giving a very positive summary of a year that went very well. I won’t cover all of the details at this time, but I can say that we had a year with no electrical accidents to our employees or the public, no serious ice storms, no rate increases, and we had operating margins above budget. In short, we wish we could clone last year and repeat it every year in the future.

In 2007, we have a number of issues that will need much of our attention. First of all, this is a legislative year, and we may have bills submitted that need our support or opposition. The last four legislative sessions, there have been bills introduced by the investor-owned utilities to change the Territorial Integrity Law and thus take away our service area around cities. In all cases, these bills have been soundly defeated or withdrawn when it was obvious they had no chance of passing.

We expect there will be proposed bills this session that address the development of renewable energy. We are very supportive of further development of renewable energy, especially wind energy, provided it can be done in a responsible manner. To us, responsible essentially means that the risk of higher electric rates for our members is kept as low as possible.

In 2007, we will be required to hold a public hearing to comply with the new Federal Energy Act. During this hearing process, our board of directors must consider adopting net metering and time-of-use rates. During this public hearing, members have the opportunity to intervene and provide testimony in support or opposition to these issues. Notice of this hearing has been published in the newspapers and in our Nodak Neighbor. There is also information about the hearing available on our website www.nodakelectric.com. When you reach the home page on our website, you only need to click on “PURPA Notice” to access this information.

One of the differences in 2007 from the previous years is that we will almost certainly need to have a small rate increase. Our wholesale power costs from Minnkota Power Cooperative will be increasing by about 10% effective April 2007. With no other changes, we will need to increase our retail rates by 5% to 8% to cover the added cost of our wholesale power. It will be our goal to keep the rate increase as close to the 5% level as possible. We will be able to give you better information about this in the March issue of the Nodak Neighbor.

We hope that one year from now we can give you a year-end summary that is at least close to the one we have for 2006. We know already we won’t be able to match the “no rate increase” statement, but there is more to our service than the cost. We hope you will feel our overall service meets your expectations.

Happy New Year and Best Wishes for the coming year.