Our strategy for the future

July 2001

We are in the process of reorganizing the structure of our line personnel throughout our service territory. Our strategy for the future will be to have more linemen stationed at a single location, but we will have fewer overall outpost stations.

The structure we have been working with up to the present was for the most part established during the 1940s and 1950s. Nodak had men located in ten different communities, including our headquarters location in Grand Forks. Sheyenne Valley Cooperative who we recently merged with had linemen located in Finley and Tolna. In 1993, we closed the station in Brocket and relocated those two positions in Devils Lake. Soon afterward, we reorganized the personnel assignments in the remaining outlying stations, but left the facilities intact. It has been our intent since that time to reorganize the entire structure to improve the efficiency of our business.

By early fall, we expect to close our outpost stations which now exist in Edinburg, Fordville, Hatton, and Tolna. We will be opening a new outpost station in Michigan. With the addition of a lineman station in Finley following our merger, we will then have linemen located in seven different communities. This is still an abnormally high number of locations for an electric cooperative, but it is much more manageable than if we had maintained all twelve locations.

The efficiency in our day-to-day business by having linemen located at seven locations vs. twelve comes in many ways. Most important is our ability to manage our total number of line personnel and the day-to-day work of those we have. We presently have 34 linemen in our organization. If we determine that 33 would be an adequate number, it would be almost impossible to eliminate a position at a location with only two linemen. For safety reasons, we always need a minimum of two linemen present when working on energized lines. Similar problems arise when one man is sick or on vacation with a small line crew. For this reason, we prefer to have a crew of at least four linemen wherever we locate an outpost facility.

There are numerous other advantages in maintaining fewer outpost facilities. Besides the cost of owning and maintaining so many facilities, there is a significant cost in maintaining an inventory of hundreds of different line material items and special equipment at each location. It is almost impossible to adequately equip every location with some special equipment items when we have so many locations.

In recent years, another issue has arisen which is related to the multiple outpost issue. We are now locating computers at each of our outpost locations. We will be interacting with our linemen much more through e-mail and the Internet and much less through traditional mail and the telephone. The cost of maintaining computer equipment and providing training to the personnel will be considerably less expensive with fewer outpost locations.

We, of course, have been very cautious in developing a better strategy of maintaining our line personnel without seriously degrading our level of response time when an outage occurs. In many cases, it will actually be faster to respond to an outage with a larger crew even though the distance to the outage may be slightly further. This is because the chances of having two people available to respond immediately is higher with a crew of four to five than it is with a crew of two. With a crew of two, it is frequent that one is not available to respond to a trouble call, and we then need to send someone in from another crew.

We can appreciate that the communities affected by our decision to reorganize are not always pleased to hear the news. Small towns in North Dakota are struggling in many respects, and naturally, they hate to see two families leave town. On the other hand, we as rural electric cooperatives have our own struggles and challenges to be concerned about. Our industry itself is changing, and we cannot afford to be opposed to looking at different alternatives in operating our business. In the electric utility business, we are the small players. As one of the state senators put it during the last legislative session, “we are the David in the battle between David and Goliath.” With this in mind, we need to be more efficient and willing to change if we intend to survive in the restructured electric utility industry of the future. Reorganizing our line department is only one of many changes we will need to deal with in coming years.