How Do We Stack Up to Our Peers?

How Do We Stack Up to Our Peers?

Marshal Albright, President/CEO

Every day, employees of Cass County Electric strive to provide exceptional value to our consumermembers. To determine how we stack up against other cooperatives, one of our lending institutions, the Cooperative Finance Corporation, compiles performance data from electric cooperatives across the country.

The Key Ratio Trend Analysis (KRTA) is a set of all-encompassing financial and operating ratios used by distribution cooperatives to understand how their organization has performed historically and against other cooperatives in the nation, the state of North Dakota, and areas of a similar size.

The primary focus at Cass County Electric is to provide reliable and affordable electricity to our consumer-members. I will highlight some of the ratios that show our commitment to providing the best value for our members.

For comparison purposes, I will focus on cooperatives of a similar size to Cass. In 2018, Cass had an average of 49,892 accounts with a median of 49,146. Cass County Electric currently has 93 full-time employees compared to our peer group’s 125. Over the past decade, Cass has invested in technology and process improvements to maintain an employee count that supports the needs of our growing consumer-member base.

Financial

At the end of 2018, the cooperative’s equity (as a percent of all assets) was 42.24% as compared to the median of our peer group, 41.70%. Our current equity level for a co-op that is growing and investing in new infrastructure is in-line with cooperatives of similar size across the country.

The average interest on our longterm debt is 3.59% compared to the median of our peer group at 3.95%. Chad Sapa, our CFO, has done a great job managing the finances for the cooperative, and as a result, our interest expense is lower than the average co-op.

In 2018, the sale of electricity to our members generated $136.2 million in revenue. As with most businesses, we have some members that fail to pay their bill. However, our member accounts team had another great year in 2018 by managing accounts receivables resulting in a write-off of $37,239. This is an exceptional 0.027% of revenue written off, compared to our KRTA peer group median of 0.10% of revenue.

Power cost

Our cost for wholesale power in 2018 was $.07775/kWh compared to our peer group at $.07141/kWh. Minnkota Power Cooperative supplies the electricity we sell to our consumer-members. Minnkota has invested more than $800 million in power supply, emission controls, and transmission over the past 15 years to ensure we have adequate power for the future. Electric rates should be stable for the next decade barring any new environmental regulations.

The cost to deliver electricity from our substations to homes and businesses is called the distribution adder. Cass County Electric has held the line on our distribution adder, and in 2018 was at $.02173/kWh compared to our peer group at $.03346/ kWh. The significant difference between our peer group and Cass’ distribution adder is the performance of our committed employees and growth in new members. We also have a focus on process improvement initiatives, cost control measures, financial management, and a board that is focused on keeping our cost low yet providing exceptional service to our consumer-members. The difference in the distribution adder between our peer group is an annual savings of more than $15,000,000 to the members of Cass County Electric.

Power delivery

Our line loss in 2018 was 2.62% compared to our peer group at 4.44%. A low line loss is a result of good maintenance. We focus on adequate tree trimming, proper sizing of transformers, and adequate maintenance of all devices in our distribution system. Our engineering and operations team does a fantastic job of keeping our line-loss low.

Reliability is more important than ever and a primary focus for the cooperative. In 2018, your power was only off 43.5 minutes per account compared to our peer group at 262.9 minutes. In other words, your power was on 99.9917% of the time. Cass County Electric has the lowest outage time of all the cooperatives in our peer group, and we have the best reliability in the nation. A huge thank you goes out to our linemen, our power control center operators, and our engineering team for keeping your power on as much as possible.

As you can see from the statistics, your cooperative is performing at a high level. We will work hard to make sure we continue to provide the level of service you expect.