Message to our Members

January 2012

By Mylo Einarson, President & CEO

As we look back on 2011, it’s important to ask ourselves if we are meeting our members’expectations. Did we fulfill our mission of being “an efficient provider of quality electric service with leadership that demonstrates the highest regard for its member-owners?”

The year began with a series of member information meetings and Nodak Neighbor articles explaining the rapid escalation of the cost to generate electricity. Our power supplier, Minnkota Power Cooperative, in the wake of investing hundreds of millions of dollars on environmental upgrades, announced a rate increase of nearly 30 percent. This increase was projected to add an additional $9.5 million to our 2011 cost of power. While we were able to offset some of the additional cost with load growth, it was necessary to increase our retail rates by 17 percent. This rate adjustment was projected to bring in $8.6 million of the additional revenue needed. The balance would have to come from load growth and other efficiencies.

Midyear, we called upon all cooperative members to join forces and oppose the EPA’s plan to take over the state of North Dakota’s regional haze program. That program is intended to improve visibility in areas such as Theodore Roosevelt National Park in western North Dakota, which is an admirable cause. Where the heartburn comes from is that because North Dakotans are already good stewards of our environment, we have some of the cleanest air in the United States, yet EPA wanted Minnkota to spend $500 million on technology that would provide no perceptible improvement in visibility. So we stood shoulder-to-shoulder with our congressional delegation, Gov. Jack Dalrymple, state regulators and industry experts to tell the EPA that its one-size-fits-all approach isn’t good for North Dakota. We also asked our members to join us in sharing their comments on this issue at www.stopEPAnd.com.

The EPA announced in September that it would supersede the portion of North Dakota’s State Implementation Plan (SIP) that deals with haze partially caused by NOx emissions. Good news came early in 2012 when the EPA approved the North Dakota SIP regarding NOx emissions for Units 1 and 2 at the Young Station. That was a key victory.

In the meantime, energy sales proved to be a challenge throughout the middle and end of 2011. A wet beginning to the growing season lessened the need for irrigation. A dry harvest reduced much of the need to dry newly harvested grain, and a rather balmy winter dramatically slowed home heating sales. Although weather patterns like this can provide quite a challenge for an electric cooperative, we had load growth in other areas that helped offset lagging sales. In some respects, this is the best of both worlds – increased total kilowatt-hour (kWh) sales for the cooperative and lower total usage per member. That helps keep the dollars where they belong – in the pockets of our member-owners. We closed the year by reaching a milestone of having just more than one billion kWh of energy purchases from our power provider, Minnkota. This translates into just more than 976 million kWh in sales to our memberowners. This new record in kWh sales helped to provide much of the needed revenue to offset the large wholesale rate increase we started the year with and helped us finish the year with a positive margin. We encourage you to review the company financial reports, along with the report from Secretary-Treasurer Donna Grotte. We hope you will agree that Nodak ended 2011 in sound fi nancial position and that we fulfi lled our mission throughout 2011 by effi ciently providing you with quality electric service while keeping you, the memberowner, in the highest regard.

On behalf of the entire board of directors and all the employees at Nodak, we want to thank you for your patronage in 2011 and for the opportunity to serve you. We hope to see you at our annual meeting at the Alerus Center in Grand Forks on Saturday, March 31, 2012.