Nodak Brings Data Mining To The Prairie

There may be many things you don’t understand about the concepts of data mining, blockchain and cryptocurrency. But a concept that is easier to digest is load growth, and that is what Nodak Electric Cooperative experienced with the 2021 arrival of three data processing centers in Grand Forks. “The digital asset mining sector is new territory for Nodak Electric Cooperative, and we’re thrilled to be able to energize an industry that is on the grow,” said Mylo Einarson, Nodak president and CEO. “Digital asset mining is changing the way we use digital information in our lives – Grand Forks is becoming a hot spot for that kind of innovation.”

Digital asset mining uses blockchain, a decentralized peer-to-peer transaction ledger that can store all types of digital information. When an entity “mines,” they use powerful computer hardware to solve complex algorithms that confirm the validity of transactions. Those validated transactions are consolidated into “blocks” and then chained together to create a ledger of all verified transactions since the creation of the first block. As an economic incentive for miners who manage and operate the fleets of specialized computer hardware, each block contains a “reward” of cryptocurrency (like bitcoin). This reward is typically two pronged – a “block reward” that is earned for each new block created, and a transaction fee, which are fees charged to users who access the blockchain and submit transactions to new blocks.

The largest of Nodak’s new data processing loads is Core Scientific, one of the nation’s largest blockchain infrastructure providers and digital asset miners. The company’s work requires large facilities filled with specialized computer hardware that continuously mine digital assets – primarily bitcoin – for clients worldwide. To be most effective, that process requires electricity and a cool climate. Grand Forks is able to supply both.

“This environment should allow our operations to experience a higher efficiency ratio over a typical year when compared to our facilities in the southeast and southwest,” a Core Scientific report to Nodak explained. “Additionally, digital mining is uniquely tailored to be able to use excess local grid capacity when local consumers are not using it and curtail when the community’s grid needs increase.”

Core Scientific says it’s pleased to be a new part of the Grand Forks community and is happy to help contribute to the local economy. The new data processing center offers numerous skilled and technical jobs along with positions for managerial, safety and security personnel.

Nodak energized two other Grand Forks data mining projects in 2021 as well. All three centers will have significant power needs. Nodak and Minnkota Power Cooperative worked together in 2021 to ensure the facilities were supported with the reliable electric infrastructure and rate affordability necessary for the companies to find success in North Dakota.

“Electric co-ops must be strong partners with any businesses sharing their lines,” Einarson said. “Collaboration is key to not only economic development, but also sustaining a robust and resilient electric grid for the community.”

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Message To Our Members

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.

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1M

Since the program started, a total of $1,025,147 has been distributed!

Operation Round Up is a program that rounds up members’ monthly electric bills to the next whole dollar amount. The resulting funds are put into a special account to assist others in need. The funds collected through Operation Round Up are used for a variety of projects, programs and items throughout the Nodak service area.

The Round Up board meets quarterly and considers each application that has been received since the previous meeting. It awards funds to the applicants based on how well the application fits the original funding guidelines: 1) Individuals or families in crisis; 2) Services – ambulance and fire; 3) Community youth needs with emphasis on permanent benefit; 4) Scholarships with emphasis on reeducation of displaced agricultural people; 5) Senior needs with emphasis on permanent benefit; and 6) No requests for funding of utility and space heating energy will be accepted.

Operation Round Up is a voluntary program with roughly 52% of the 15,088 members participating. Since the program started, a total of $1,025,147 has been distributed to individuals and organizations throughout the Nodak Electric service area.

2021 Recipients

Altru Ambulance Service – $ 125.00
Aneta Ambulance Service – $ 125.00
Binford Ambulance Service – $ 125.00
Cooperstown Ambulance Service – $ 125.00
Drayton Ambulance Service – $ 125.00
Emerado Ambulance Service – $ 125.00
Finley Ambulance Service – $ 125.00
Fordville Ambulance Service – $ 125.00
Hillsboro Ambulance Service – $ 125.00
Hoople Ambulance Service – $ 125.00
Hope Ambulance Service – $ 125.00
Lake Region Ambulance Service – $ 125.00
Lakota Ambulance Service – $ 125.00
Larimore Ambulance Service – $ 125.00
McVille Ambulance Service – $ 125.00
Michigan Ambulance Service – $ 125.00
Northwood Ambulance Service – $ 125.00
Park River Ambulance Service – $ 125.00
Pembina County Ambulance Service – $ 125.00
Valley Ambulance & Rescue Squad – $ 125.00
West Traill Ambulance Service – $ 125.00
Briar Coppedge – $ 632.00
Devils Lake Juvenile Drug Court – $ 250.00
Jeffrey Guy – $ 1,145.00
Hillsboro Elementary School (Backpack Program) – $ 500.00
Theresia Hoffner – $ 1,150.00
Collin LaVallie – $ 2,000.00
Brian & Barb Milling – $ 2,000.00
Sameia Mansur Muftah – $ 1,560.00
Shirley Peterson – $ 1,000.00
Kennedy Byfuglien – $ 1,500.00
Central Valley High School – $ 50.00
Devils Lake High School – $ 50.00
Grafton High School – $ 50.00
Grand Forks Central High School – $ 50.00
Hatton/Northwood High School – $ 50.00
Minto High School – $ 50.00
North Border Walhalla High School – $ 50.00
Park River High School – $ 50.00
Thompson High School – $ 50.00
Valley-Edinburg High School – $ 50.00
Sawyer Boese – $ 1,000.00
Kristi Cole – $ 2,500.00
Murika Dawes – $ 350.00
Elizabeth Espling – $ 1,200.00
Kyle Everson – $ 1,000.00
Ronald Helm – $ 1,000.00
Troy Hruby – $ 180.00
Emma Larson – $ 1,000.00
Bruce Martin – $ 1,000.00
Titus Prins – $ 736.00
Leila Roberts – $ 500.00
Hunter Vaske – $ 1,500.00
Aaron & Patience Whitney Family – $ 648.00
Jennifer Wray – $ 197.00
Emma Basting – $ 2,000.00
Rilynn Dahly – $ 1,000.00
Dennis Denault – $ 269.00
Debora Heath – $ 1,000.00
Tami Ostlie – $ 2,000.00
James Ottem – $ 369.00
Jose “Jr.” Patlan – $ 390.00
Miranda Spoor – $ 780.00
James Vaughan – $ 1,000.00
Zoe Vaughan – $ 1,000.00
Veterans Honor Flight of ND/MN – $ 2,200.00

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Changes To Nodak Bylaws

In 2022, the Nodak Board of Directors reviewed and made changes to the Nodak Bylaws. The changes are outlined below and if you would like a complete copy of the current Bylaws, one will be made available at your request or can be downloaded from www.nodakelectric.com, under My Co-op, on the Legal Information page.

ARTICLE III – DIRECTORS
Section 2 – Qualifications and Tenure

(c) not be currently, or within the immediately previous three-year period have been employed by, materially affiliated with, or have a material financial interest in, any individual or entity which either is:

  1. directly or substantially competing with the Cooperative; or
  2. selling goods and services in substantial quantity to the Cooperative; or
  3. possessing a substantial conflict of interest with the Cooperative.

Note: Language bolded has been added and struck through has been deleted.

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Candidates For Board Of Directors

Below are candidates either nominated by petition or selected by the Committee on Nominations.

District 1

Luther Meberg, Park River, retired from farming in October 2015. The University of North Dakota graduate and his wife, Linda, have two sons and four granddaughters. Meberg is a past Park River school board member, a retired Walsh County commissioner and has also been on an implement dealership board. Luther serves on several committees and boards, including the Dundee Mutual Insurance board and the Park River Rural Fire board. He has also served on the Nodak Electric board for nine years.

District 2

David Kent was first elected to the Nodak Electric Cooperative board of directors in 1989. Kent is a former state legislator, representing District 20 for eight years. Kent is a graduate of North Dakota State University with a degree in Agricultural Economics. He is an agent with Nodak Insurance. Kent serves on the Union Township board and is a member of Goose River Lodge #19, the Kem Shrine and Farm Bureau. He is also a member of the Holmes United Methodist Church. He resides on the family farm with his wife Marguerite. They have three married daughters and seven grandchildren.

District 3

Les Windjue is a farmer in Morris Township of Ramsey County. He has been married to Karn for 43 years; they have three children and eight grandchildren. Windjue attended Devils Lake High School and Lake Region State College. He serves on the Greater RamseyWater District board. He is a former member of the Lake Region State College Foundation, the Mercy Hospital Foundation board and served on the Peace Lutheran Church council as treasurer. Les has been on the Nodak board for six years, and serves as chairman on the Minnkota Power Cooperative board.

 

How To Vote

Members may vote in person at the Alerus Center on Tuesday, April 12, at 6 p.m., or by mail. Ballots will be mailed upon request prior to the meeting. Voting instructions will be included.

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Treasurer’s Report

As treasurer for Nodak Electric Cooperative, and on behalf of all the directors and employees of Nodak, thank you for your patronage in 2021. If you note our income statement, 2021 was an excellent margin year for your co-op. The addition of new industrial loads assisted in making 2021 a financially good year.

Total revenue for the 1.27 billion worth of kWh sales was $112 million. Other operating revenue added $1.7 million for a total reported revenue of $113.7 million. Total expenses were $109.7 million, the largest expense being wholesale power costs at $93.3 million. Additionally, nonoperating margins added $6.08 million, with the largest addition to nonoperating margins being a capital credit allocation from our power supplier. Total reported margins were $10.16 million for 2021. This larger-than-normal margin will result in a larger patronage allocation to our members that will be retired in the future. 2021’s capital credit retirement amounted to $2.06 million.

Thank you again for your patronage and for allowing us to serve your electricity needs during the past year.

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Value During Volatility

Minnkota and its members expect active off-peak season spurred by volatile energy markets

Last winter, a polar vortex event sent energy market prices soaring. Fewer resources across the country were able to generate electricity in the historic cold, and demand was high for the few resources that were generating enough to sell into the electric grid.

Utilities are experiencing those high market prices again – but it’s not because of a single major weather event this time. It’s the climbing cost of natural gas.

“Natural gas is one of those resources that typically help manage the variability in electricity generation, and we’re seeing prices that are significantly higher than what we’ve seen in the past 10-15 years,” explained Todd Sailer, senior manager of power supply & resource planning for Minnkota Power Cooperative (Nodak Electric Cooperative’s wholesale power provider). “We’re seeing prices double and triple what they were last year, or even over the last couple of years.”

While the energy markets soared for only 7-10 days in February 2021’s polar vortex, Sailer says this volatility could last throughout the winter season, or longer. That’s good insight for cooperative members on the demand response – or off-peak – program, which allows the co-op to temporarily interrupt service to a participant’s off-peak loads (electric heating, large-capacity water heaters, electric vehicle chargers, etc.) in exchange for a lower electric rate.

“The projection is that these high prices will likely drive our demand response more than we’ve seen in the past years,” Sailer said.

Minnkota’s energy marketers are preparing for 200 hours of off-peak load control this winter, but Sailer says that could rise if natural gas prices continue to climb. He also notes that load control could be spread out over more days and not always coincide with major weather events. 

“If we have days of low intermittent resources in the region, like wind power, the expectation is that the markets will respond and you’ll see higher markets, which will result in more off-peak control,” he said.

Ultimately, the cooperative will deploy off-peak load control when it needs to protect itself from buying high-price energy from the market. This system was established years ago to avoid building more generation facilities for peak need that only arises a few days out of the year. That, in turn, keeps rates low for consumers. By being a part of the off-peak load control program, consumers can also take advantage of an even lower electric rate without any disruption in comfort.

Sailer urges those who are a part of the off-peak program to make sure they have adequate backup fuel supply. Confirm that all parts of your heating system are running smoothly.

“It’s not just natural gas – it’s propane, it’s all fuel sources that have seen an increase in cost. Which leads to people reliant on their off-peak system,” Sailer said. “Members should be making sure their system works.”

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Rural Development Finance Corporation Awards Grant In Nodak Electric Cooperative’s Service Area

Nodak Electric Cooperative is a member of the Rural Development Finance Corporation (RDFC). As a result, communities in our service area were eligible to apply for a grant of up to $2,000 for community-based projects. RDFC is making these funds available in order to make more people aware of their larger loan program that funds community-based projects and nonprofit entities with low interest loans.

RDFC has recently granted $2,000 to the City of Gilby, N.D. The shingles and underlayment of Gilby’s park shelter are deteriorating. The grant funds will be used to replace the materials and use steel for the roof to help with maintenance. The “Welcome to Gilby” sign located on the south edge of town will be updated and the plants in the planter will be refreshed as well.

The RDFC is a nonprofit corporation that encourages economic diversification and community vitality through the generation of funding that supports sustainable asset building. Funding for RDFC programs comes from fee income generated by Dakotas America LLC, a community development entity providing New Market Tax Credits in economically distressed census tracks across the U.S. 

The North Dakota Association of Rural Electric Cooperatives provides support to RDFC.

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How Much Are You Spending On Heating Each Month?

Consider Off-peak Electric Heating

Nodak Electric Cooperative member-owners can save money by allowing their electric heating system to be controlled during peak demand periods while using their backup heating system. The savings to Nodak during these control events is passed on to participating off-peak members through a lower electric heating rate. To qualify, an electric heating system must be coupled with an automatic, whole home backup heating system. A device is installed to control the electric heat remotely. The off-peak rate is offered during the heating season months of October through May. Contact us for more information at www.nodakelectric.com/off-peak-electric-heat or by calling Member Services at 800-732-4373.

If during the heating season you experience a control event that seems excessively long or have no hot water, please be sure to give us a call at 800-732-4373 first to determine if further help is needed.

How does Nodak’s $0.062/kWh off-peak heating rate compare to alternative fuel sources?

Fuel Type

Furnace Efficiency

Fuel Price

Unit of Measure

Propane 95%

$1.58

gallon
80%

$1.33

gallon

Natural Gas

95%

$1.73

ccf (for mcf x 10)

80%

$1.45

ccf (for mcf x 10)

Fuel Oil

70%

$1.78

gallon
60%

$1.53

gallon
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Are You Wasting Your Money On Dirt?

Dirty air filters cause a heating and cooling system to work harder and break down faster. That’s because unfiltered dust and grime works into parts, creating friction that causes unnecessary wear and eventually failure. 

How much does a dirty air filter cost you?

  • Reduced air flow in the home, leading to up to 15% higher operating costs
  • Leads to costly duct cleaning or replacement
  • Lowers system efficiency

To avoid these expenses, change filters monthly when your heating and cooling system is in regular use. Discuss cleaning the unit and ductwork with your heating and cooling service professional.

Source: High Performance HVAC, U.S. Department of Energy 

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Construction Plans This Summer? Don’t Forget About Us.

If you are planning any kind of construction, grain handling upgrade or any other projects that require an electric service upgrade, don’t forget to contact us at 800-732-4373.

With many projects already scheduled for this construction season, advanced notice helps us plan to better serve you. Lead time for some materials has substantially increased. 

Line Patrol

Line crews will be conducting line inspections starting around January/February. You may see our crews driving around and inspecting overhead lines. Crews will be inspecting services and equipment on members’ properties. 

Please use caution when driving through work zones. You may encounter traffic restrictions, reduced speeds, lane closures, detours and/or delays. Above all, slow down and please drive carefully!

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Value Of Off-peak Electric Heating

We regularly try to point out that the electricity we sell is a good energy value. Our core mission is to provide our membership with safe, reliable and affordable electricity, but we also take pride in that our commodity remains a good energy value when compared to alternative sources. Natural gas and propane prices have risen dramatically over the last several months. Natural gas prices today are over double what they were at this same time last year, while propane prices are forecast to be about 75% higher than last winter. Fortunately, the cost of electricity from Nodak Electric Cooperative has stayed stable for the last several years and will do so for the balance of 2022. 

These high natural gas prices, coupled with a lingering drought that has reduced available hydroelectric resources, has caused tremendous volatility in the wholesale markets. Last winter, we saw a polar vortex upset the wholesale markets for about a week or so. Today’s high market prices have been occurring with more regularity. To avoid having to purchase high-priced wholesale electricity, our wholesale power provider, Minnkota Power Cooperative, utilizes their off-peak load control system. Over the past several years, the wholesale power market has been relatively low compared to where it is today, so the load control system has enjoyed a period of lesser use. The higher market prices and extreme volatility will certainly mean the value of this system will be realized with more robust use over this winter season.

Some of you may be enjoying the low rates that we offer as part of our off-peak heating program. What you probably didn’t realize is that by being a participant in this program, you are helping all of us enjoy lower rates. By being able to reduce electricity demand through the use of our load control system, Minnkota Power is able to avoid purchasing high-priced energy to meet the peak demand, or alternatively, adding additional generation resources that would only be necessary during the very highest use times of the year. Those cost savings play a large part in keeping our wholesale power costs down, which in turn impacts all our rates. 

On another note, I typically use this issue of the Nodak Neighbor to remind you of the upcoming annual meeting and board of directors election. After two years of virtual meetings, our goal is to finally get you all together in person at the Alerus Events Center in Grand Forks. Our meeting is set for Tuesday, April 12, beginning with supper at 5 p.m. with the meeting to follow at 6 p.m. We will again have three board positions up for election, so if you or anyone you know may be interested in running for a seat on your cooperative’s board of directors, contact us at the cooperative headquarters in Grand Forks and we will be happy to help you through the process. 

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