B A S I N T O D AY BASIN EL EC T RIC P OW ER COOPER AT I V E
A NNUAL MEE T ING EDI T ION
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M AG A ZINE
TUESDAY, NOVEMBER 7 11 a.m. 2-4 p.m. 4 p.m. 6-9 p.m.
Resolutions Committee meeting – Basin Electric Headquarters New Manager Orientation – Prairie Rose Room 103, Bismarck Event Center District 9 Caucus – Governors Room, Ramkota Hotel Annual meeting reception – Basin Electric Headquarters
WEDNESDAY, NOVEMBER 8 *Nov. 8-9 at Bismarck Event Center 6:30 a.m. 7 a.m. 7:30 a.m. 8 a.m. 8 a.m. 8:30 a.m. 8:45 a.m. 9:15 a.m. 10:25 a.m. 10:45 a.m. 11:30 a.m. 1 p.m. 2 p.m. 3 p.m. 3:20 p.m. 4 p.m. 4:05 p.m. 4:15 p.m. 4:30 p.m. 6 p.m. 7 p.m.
Registration opens – Exhibition Center foyer Breakfast – Exhibition Center Hall A Display booths open – Exhibition Center Hall A Annual Meeting convenes – Exhibition Center Hall B/C Welcome to North Dakota President’s message General manager’s report Keynote address Coffee break – Exhibition Center Hall A Financial report Members luncheon – Exhibition Center Hall A Operational Excellence Panel Supporting Membership Growth Panel Coffee break – Exhibition Center Hall A Government Relations report Resolutions report Bylaws report New business Meeting adjourns Social – Exhibition Center Hall A Banquet – Exhibition Center Hall B/C
THURSDAY, NOVEMBER 9 6:45 a.m. 7 a.m.
Plant tours (Buses depart from Exhibition Center parking lot) Security and Response Services Breakfast – Prairie Rose rooms 102/103
CONTENTS VOLUME 20 | ANNUAL MEETING EDITION IN THIS 2 4 5
ISSUE President and general manager message Basin Electric Resolutions Committee proposes two new resolutions Bylaws Review Committee proposes amendments
CONTRIBUTORS Editor: Chris Gessele (cgessele@bepc.com) Graphic designers: Nicole Perreault & Tracey Krusi Photographer: Chelsy Ciavarella Writer: Angela Magstadt
2017 ANNUAL MEETING EDITION | 1
PRESIDENT AND GENERAL MANAGER MESSAGE
BUILT TO SERVE
YOU Wayne Peltier, president
Paul Sukut, CEO and general manager
2 | BASIN TODAY
From its very beginning, Basin Electric was built to serve. The cooperative rose from a great need in rural America. Electricity and the American industrial spirit had U.S. cities booming the first few decades of the 20th century. Meanwhile in rural America, farmers were still working by the light of kerosene lamps and using the same machinery their grandparents used. By the early 1930s, still only 10 percent of the nation’s farms had electricity compared to 70 percent of urban dwellers. Then rural people started banding together to form rural electric co-ops, and improve quality of life through access to affordable electric power. Those co-ops banded together to form G&Ts to supply generation and transmission and manage federal power contracts for the distribution co-ops. As distribution co-ops and G&Ts thrived, things began to change in the late 1950s. The government told electric co-ops they would be responsible for creating their own generation for any needs above and beyond hydropower from the dams. Leland Olds, a member of the Federal Power Commission, encouraged co-ops to establish regional power suppliers, or “super G&Ts.” In 1960, Olds’ vision prompted East River Electric Power Cooperative and 10 other power supply systems to create the Giant Power Cooperative – the precursor to Basin Electric. Basin Electric was incorporated on May 5, 1961, in Bismarck, ND. Basin Electric was built by its members, and exists to serve its members. At Basin Electric we know generation, and we’re humbled that you’ve entrusted your power generation facilities to us to operate as efficiently and cost-effectively as possible. At your distribution co-ops, you know how to deliver that power to the consumers at the end of the line. Together we’re a co-op family, an unstoppable force working for the greater good. The co-op business model is a special one. Its focus is people, all the way from a farm family in rural South Dakota to a laborer at Antelope Valley Station. Interwoven throughout our co-op structure is a culture of service, of helping others, and never losing sight of the big picture.
Innovation Where there’s challenge, which might come with uncertainty and frustration, there’s opportunity. Basin Electric has a strong track record of seeking innovative solutions to challenges. Today, that effort continues. Basin Electric is participating in Carbon Storage Assurance and Facility Enterprise, or CarbonSAFE, projects in North Dakota and Wyoming. CarbonSAFE is a U.S. Department of Energy initiative implemented to develop commercial-scale carbon capture and storage complexes that are capable of sequestrating 2 million tons of CO2 per year over a 25-year span. The projects could ultimately help in the development of an environmentally friendly, economical, and long-term carbon mitigation solution. In Wyoming, finalists will soon be chosen to fill the test bays in the Wyoming Integrated Test Center, hosted at Dry Fork Station. The ITC provides space for researchers to test Carbon Capture, Utilization and Sequestration technologies using actual coal-based flue gas. Additional research will look at taking flue gas and turning it into a marketable commodity. We also continue to track promising technologies such as the Allam Cycle, which has potential to change the face of coal-based generation. In October, we welcomed the news that EPA Administrator Scott Pruitt had signed a proposed rule to rescind the Clean Power Plan. That announcement, however, does not affect our efforts to seek a viable path forward in a carbonconstrained future. Basin Electric is actively seeking solutions that reduce our carbon footprint while keeping coal as part of our energy portfolio. We will work to ensure any new approach to regulating CO2 provides electric co-ops long-term flexibility and certainty, and maintain energy reliability and affordability for consumers at the end of the line.
has been to position the co-op for the future, so we will be prepared to address whatever hurdles we face. For the past two years we’ve been engaged in strategic planning. Our work focus must take into account those external forces that shape our direction: a carbon-constrained future, emerging technologies, and commodity risk. We are also continuing to consider all options for Dakota Gas, including continued cost reductions, operating efficiencies, and changes to the power contract between Dakota Gas and Basin Electric. The cooperative has a significant investment in Dakota Gas, and the subsidiary provides numerous benefits to Basin Electric. We are committed to the continued operation of Dakota Gas, and are taking necessary actions to mitigate losses and avoid a potential write-off of our assets due to extended low commodity prices. To ensure efficient operations throughout Basin Electric, we are closely monitoring our staffing levels. As employees have resigned or retired, we have been able to lower our numbers by more than 40 employees since December 2016. Additionally, continuous improvement teams are reviewing our processes to eliminate inefficiencies and develop plans to implement best practices. All of these efforts are writing the next chapter in our co-op’s history. In 1961, we banded together out of need to form Basin Electric. Our mission today is unchanged from the co-op’s origins – we will work together to strengthen rural America and serve our members with low-cost, reliable power and services. We are a co-op made of co-ops – a family … built to serve.
Wayne Peltier, president
Strategically looking to the future We are working to be proactive in all areas that impact Basin Electric and its membership. One of our top priorities
Paul Sukut, CEO and general manager
2017 ANNUAL MEETING EDITION | 3
The Basin Electric Resolutions Committee includes (from left) Ken Kuyper (District 11 alternate), Dean Hummel, Sheri Haugen-Hoffart, Louis Reed, Melanie Roe, David Meschke, Les Mehlhaff, Leo Brekel, Phillip Habeck, David Sigloh, Jack Finnerty, and Scott Stecher. Not pictured are Richard Schneider and Vic Simmons (District 7 alternate).
BASIN ELECTRIC RESOLUTIONS COMMITTEE PROPOSES TWO NEW RESOLUTIONS The Basin Electric Resolutions Committee reviewed the cooperative’s resolutions Sept. 12-13 at Headquarters in Bismarck, ND, and proposed two new resolutions. The new resolutions include the following: Tax incentives for energy development. This resolution relates to the current tax credits that are offered for the development of renewable energy, which are only offered to public power utilities – not rural electric cooperatives. While these incentives will soon expire, this resolution would encourage that in the future, similar incentives should be offered to cooperatives as well as public utilities. Regulatory reform. The new administration is taking steps to decrease the regulations that currently face the energy industry. This resolution reiterates Basin Electric’s commitment to environmental protection, but states that the cost/benefit ratio must be taken into account when considering new and existing regulations. It also urges Congress to carefully oversee
4 | BASIN TODAY
the Environmental Protections Agency and other regulatory agencies through legislation and other actions to provide transparency, encourage public participation in the regulatory process, and ensure environmental and financial goals are followed. In addition to these new resolutions, the committee suggested removing the resolution regarding the Stream Protection Rule, because the rule is no longer in effect. Other minor revisions to reflect the change in administration were proposed, as well. The committee also re-elected David Sigloh, director for Upper Missouri Power Cooperative, as its chairperson. Basin Electric staff updated the committee on transmission efforts, power supply planning, member rates, legislative efforts, and the cooperative’s finances. The committee, made up of directors from each of Basin Electric’s districts and a Basin Electric board member, will meet again Nov. 6 before Basin Electric’s 2017 Annual Meeting to get members’ final approval on the resolutions before the members vote.
Basin Electric’s 2017 Bylaws Review Committee includes (from left) Tim Velde, Tom Meland, Ken Kuyper, Mark Brehm, Louis C. Reed, Claire Vigesaa, Kevin Mikkelsen, David Sigloh, Doug Hardy, Melanie Roe, Mike Easley, Vic Simmons, Tom Boyko, and Scott Stecher. Not pictured are Richard Schneider, Mike McInnes, James Ryken, Arlyn Zylstra, Matthew Washburn, Jim Collins, and Curt Dieren.
BYLAWS REVIEW COMMITTEE PROPOSES AMENDMENTS Basin Electric’s 2017 Bylaw Review Committee met Sept. 13 at Headquarters in Bismarck, ND. During the meeting, the committee voted to recommend one amendment to the bylaws. It also deferred action on two other amendments until next year, asking staff to further research them and incorporate the committee’s comments into the proposed amendments. The committee, made up of one manager and one director from each district, elected Vic Simmons, general manager of Rushmore Electric Power Cooperative, as chairperson.
The committee’s role is to review proposed amendments to the bylaws and provide recommendations to the membership. The proposed amendment gives the board of directors the authority to establish an audit committee as well as board advisory subcommittees. The proposed amendment will be included in the Notice of Annual Meeting, which will be mailed in October. The membership will vote on the proposed amendment during Basin Electric’s Annual Meeting.
Resolutions
Bylaw Review General Manager
Director
District 1
East River
Les Mehlhaff
Thomas Boyko
James Ryken
District 2
L&O Power
David Meschke
Curt Dieren
Arlyn Zylstra
District 3
Central Power
Sheri Haugen-Hoffart
Tom Meland
Mark Brehm
District 4
NIPCO
Louis C. Reed
Matthew Washburn
Louis C. Reed
District 5
Tri-State
Jack Finnerty
Mike McInnes
District 6
Central Montana
Melanie Roe
Doug Hardy
Melanie Roe
District 7
Rushmore Electric
Richard Schneider
Vic Simmons
Richard Schneider
District 8
Upper Missouri
David Sigloh
Claire Vigesaa
David Sigloh
Dean Hummel
Kevin Mikkelsen
Tim Velde
District 9 District 10
PRECorp
Philip Habeck
Mike Easley
Jim Collins
District 11
Corn Belt Power
Scott Stecher
Ken Kuyper
Scott Stecher
Board Rep.
Basin Electric
Leo Brekel
2017 ANNUAL MEETING EDITION | 5
PRESORTED STANDARD U.S. POSTAGE PAID BISMARCK, ND PERMIT 224
1717 EAST INTERSTATE AVENUE BISMARCK, NORTH DAKOTA 58503-0564 701-223-0441 ADDRESS SERVICE REQUESTED PRINTED ON RECYCLED PAPER
ANNUAL MEETING HIGHLIGHTS RECEPTION TUESDAY, NOV. 7 @ 6-9 P.M. Basin Electric Headquarters Heavy hors d’oeuvres and beverages
TOURS Available from 6-8:30 p.m. Register for a tour: bepc.swoogo.com/annualmeeting2017
KEYNOTE: NICK BROWN PRESIDENT & CEO OF SOUTHWEST POWER POOL (SPP) WEDNESDAY, NOV. 8 @ 9:15 A.M. Nick Brown was elected president and CEO of SPP in 2003, and serves on the board of directors. Prior, he served as senior vice president and corporate secretary, vice president and corporate secretary, director of Engineering and Operations, manager of Engineering Services, and in several engineering positions since joining SPP’s staff in 1985. Brown’s career began as a planning engineer at Southwestern Electric Power Company. He holds bachelor’s degrees in physics, math, and electrical engineering, and is a registered professional engineer, a master electrician, and instrument-rated private pilot.