When we look back on Nodak’s history, 2018 will be remembered as the year we were awarded the utility privatization contract for the Grand Forks Air Force Base and the Cavalier Air Force Station. After six years in development, we were awarded contracts for the maintenance, repair and replacement of the electric distribution systems at the two military facilities. Over the next 50 years, the government will benefit from safer, more reliable distribution systems, and our members will enjoy additional revenue and margins that will help keep our rates affordable. The military has been a valued partner of ours for many years – this new agreement solidifies that relationship for decades into the future.
Affordable power is the reason Nodak was established 79 years ago and today it remains a primary focus. We are fortunate to have a committed Board of Directors and a team of dedicated employees to help accomplish this goal. Spurred by a year without a wholesale rate adjustment, in 2018 we were able to hold retail rates
steady for the second straight year. Our Deferred Revenue Program also played a small part in helping us stabilize our rates. In 2014, we established a Deferred Revenue Program by setting aside excess revenue that can be recognized in years when we don’t quite hit our budgeted margins. Your Board also created a Financial Goals Policy that establishes metrics of financial ratios we strive to meet each year. These two initiatives help ensure we are able to retire capital credits, maintain stable rates and enjoy a healthy, robust financial position. This commitment to financial security is a critical piece to the health of your cooperative and our ability to provide safe, reliable and affordable electric service to our members for years to come.
Over the last several years, your cooperative has enjoyed steady growth in both total number of metered services and in kilowatt-hour sales. In 2018, we topped the milestone of 20,000 metered services for the first time as well as an increase of nearly 3.8 percent in kilowatt-hour sales. Continued growth serves to stabilize rates by providing a larger number of members and an increased number of kilowatt-hours to spread fixed costs over. One of our largest growth areas is the Grand Forks region. We were pleased to begin a new 20-year franchise agreement at the beginning of the year with the city of Grand Forks and to continue the valued partnership we’ve enjoyed with the city and residents of the region.
Having a growing, financially healthy cooperative is obviously something we strive for. Beyond the comfort of a strong balance sheet, this financial security puts us in a position where we can return our members’ investment in the cooperative back to the members. Once again, your Board of Directors chose to return your patronage investment and retire $1.4 million in capital credits in 2018. This capital credit retirement is part of the Board’s continued commitment to be good stewards of your capital and give it back to you in a timely fashion.
In addition to providing low-cost power to our members, commitment to community is one of our core guiding principles. As a means to fulfill that commitment, our Operation Roundup Trust continues to make lasting impacts on the lives of our neighbors in need. By amassing pennies from bills rounded up to the nearest dollar from the almost 8,500 members who participate in the program, our Operation Roundup board was able to donate more than $56,000 last year to worthy causes. Since its inception, our Roundup board has put more than $88 million of your pennies to work helping individuals and organizations throughout the Nodak Electric service area. What a shining example of how each of us doing a little bit can make a huge impact. One of the cooperative movement’s greatest assets is we have the strength in numbers to accomplish our objectives.
The utility industry continues to change slowly in some areas and more rapidly in others. As we look ahead, we see opportunities as electric vehicles and smart homes gain popularity and technologies become more prevalent. We also see challenges in the ever-increasing complexity of our industry. Your Board of Directors and employees see a bright future ahead as we commit to innovate and adapt to these changes. Our mission is to serve the needs of our membership, and we are as committed as ever to fulfilling that pledge. Thank you for your support and patronage over the past year and thank you for the opportunity to serve you and be part of this wonderful organization. We look forward to visiting with you at the annual meeting on April 11 at the Alerus Center in Grand Forks.