2021 turned out to be another year of battling the effects of the COVID-19 pandemic as we adapted and adjusted to a new way of life. Nodak Electric was no different in that regard. While most others were working in a remote work environment, our employees adapted to the new procedures we put in place for employee and member interactions that ensured that our employees’ and members’ safety remained our number one priority. Reliable power is essential to our lives and our livelihood, so our employees embraced change and worked tirelessly to ensure our members received the level of service they have come to expect.
While the safety of our employees is paramount, the safety of our membership is no less important. Despite the widespread availability of COVID-19 vaccines in the early part of 2021, the conditions did not yet lend themselves to public gatherings. Out of an abundance of caution, we decided to cancel our in-person annual meeting for the second year in a row and record messages from our chairman and CEO to our membership. As a result, we employed a mail-only election for our board of directors. Longtime director Paul Sigurdson retired from the board and new director Ryan Benson was elected to serve from District 1. Incumbents David Hagert and David Brag were also reelected to the board.
In a cooperative like Nodak Electric, you are a member-owner of the business. One of the major differences between a cooperative and an investor-owned utility is that through purchasing power from us, you earn an ownership stake in the business called capital credits. These dollars are used by the cooperative to operate our system for a period of time and are eventually returned to you in the form of a bill credit. I’m happy to report that despite the pandemic-related turmoil, your cooperative posted its best year ever with over $10 million in net margin and record sales. Because we had such a successful year, your board of directors increased this year’s capital credit retirement to $3.8 million. Because that level of margin is more than we need to operate, and recognizing the fact that our members have gone through a trying time, the board decided to retire approximately $1.5 million of the total retirement to the current year allocation. In other words, the members who purchased power from us in 2021 will see a portion of their capital credits returned to them immediately and approximately $2.3 million will be retired to the 2003-2004 membership. In all, that totals $11.1 million your cooperative has returned to current and past members in the past five years.
Keeping the price of electricity affordable is extremely important for our members. Our cost to operate the cooperative has remained relatively stable at about 18% of our total expenses. The other 82% represents our cost of wholesale power. These percentages have remained fairly constant over the last several years because of our efforts to contain operating costs, and through the growth of our system.
New loads like the ones featured in this report go a long way toward bringing in the additional revenue needed to overcome the rising costs of doing business. As a result, for 2021 we were able to keep rates unchanged for the fifth year in a row. Our team is committed to keeping our rates as affordable as possible so more of your hard-earned dollars stay where they belong – with you.
2022 holds promise of a return to what we would all consider something more normal. Throughout the pandemic our commitment to you, our members, has not and will not change. Our dedication to serving our member-owners and providing the best energy value in the region is as strong as it has ever been. We are looking forward to meeting the challenges that lie ahead in 2022 and beyond. Our board and management are committed to maintaining a strong cooperative with an emphasis on safety for the public and our employees, and on service reliability and responsive service to our member-owners.
We encourage you to review the information in this report, and we hope to see you at the annual meeting at the Alerus Center in Grand Forks on April 12.