The Base Realignment and Closure (BRAC) Commission recently made public the list of recommended military installations for closure. By now, everyone in the region is probably aware that Grand Forks Air Force Base is one of the military bases that is scheduled for realignment.
In the next few months, we can react with gloom and doom, or we can move forward in the most positive manner possible. Any change at Grand Forks Air Force Base is, of course, serious to Nodak as it is to many businesses in the region. First, we sell 65 million kilowatt-hours annually to the Base, which is nearly 10% of our total sales. Second, we provide service to many residences in the region that are owned or rented by military families or civilian workers who make a living on the Base. Third, we sell power to many small businesses who in turn depend on Grand Forks Air Force Base for all or part of their success. We can only assume some of these small businesses will not survive if they are totally dependent on the Base for their business.
Obviously, we all would have been much happier if Grand Forks would have been left off of the list. However, at the other extreme, we would have been a lot more depressed if the Base had been scheduled for closure rather than for realignment. Our disappointment at this stage is that the realignment appears to be a drastic downsizing with regard to military and civilian jobs compared to the flying mission that now exists on Base.
We now have roughly three and one-half months during which time state and local leaders will build a case that the flying mission should be retained at Grand Forks Air Force Base. If this effort fails and the military presence is in essence downsized substantially, the result could clearly have an adverse effect on Nodak. Not knowing the nature of the realignment, nor the energy requirements of the new mission, it is difficult to estimate what the final financial impact would be on our business. Fortunately, we have a lot of diversity in our membership, and we do not expect the effect would be devastating. The Base is a very large load that is rightfully served with a special low margin rate. In that regard, the loss of residential accounts, which are scattered out over our distribution system, might be more serious than the loss of the Base itself.
Nodak is a business that is accustomed to dealing with change which adversely affects our sales. Serving a rural, agricultural region, we have experienced severe changes to our demographics over the past few decades. If we lose a significant amount of sales to the Air Base, we are optimistic we can deal with this change as well. We hope, however, we prevail in our effort to save the flying mission at the Base, or the realigned mission turns into something that will grow and some day return the Base to its old form with regard to military and civilian job opportunities.
Last Friday, the 13th, the day the list was made public, was a cloudy and gloomy day. We can only hope that things will look a lot brighter next September when the final list is turned over to the President for acceptance.