rt Repo l a u Ann 2018
Current Connection Special Edition May/June 2019, Volume 71, Number 3
A MESSAGE FROM YOUR CEO EMBRACING THE FUTURE The Board of Directors, under the strong leadership of President Bob Kangas, is always looking out for the best interest of the Cooperative. Management helps the Board in their decision making by bringing innovative opportunities to strengthen Crow Wing Power in preparation for the future. The electric utility industry is preparing for great changes as we move through the 21st century and look to embrace an ever-changing future. Much like the community solar arrays the Board has authorized and we’ve constructed in the past few years, the electric vehicle and electric battery storage movements are something we are prepared to embrace. Therefore, in May, we purchased our first electric vehicle (EV) – a 100% electric Chevy Bolt, as pictured on the cover. The vehicle will help us monitor and plan for what EV charging stations will do to the electric grid and cost of supplying power at varying times of day. This project also includes a testing pilot program, where members that own an electric vehicle, can sign up to show us their preferences for times of day they wish to charge their vehicles. That information will help us design electric rates, perhaps Time-of-Day rates, which will mesh with wholesale power costs. For instance, we may see members that charge their EVs during nighttime hours, when electricity is currently less expensive, could be
eligible for cheaper electric rates during those times — much like our load management rates for off-peak heat and water. Importantly, as we don’t know exactly what to expect with distributed energy, such as solar and wind generation, we are preparing for the future. Thus the manganese/iron project we began in 2007 will be a factor in playing an important role in the nation’s quest for storage of electricity. Today, wind and solar electricity that is generated cannot be adequately stored in large quantity, but much progress has been made with research and development as we predict lithium-ion manganese batteries will play a key role in accomplishing that goal. Our ownership of the richest known manganese/iron deposit in North America, located in Emily, MN, will play a key role for Crow Wing Power and the communities and members we serve. We are currently in talks with a reputable mining/mineral firm that has the potential to accomplish what we need to bring that project to a prosperous realization. We understand the frustration of some members that it’s taken years to develop the project, but we also know the value is there when the timing and partners are right. If you have any questions or don’t know the background about the manganese deposit, we welcome your questions. As always, I’ll keep you informed.
Bruce Kraemer, CEO
FACTS AT A GLANCE
● 15,300 members enrolled in automatic electronic bill payment;
● 11,810 members enrolled in load management programs;
● 17,935 members access energy use and bills online;
● 5,800 homes and businesses have a People’s Security system;
● 5,360 people are Crow Wing Power Credit Union members;
● 7,250 members have selected paperless billing online, and save the Cooperative $65,000 annually; and
● To date, nearly $30 million in capital credits has been returned to members. 2
COMMITMENT TO COMMUNITY OPERATION ROUND UP DONATIONS TOP $3.6 MILLION
COLLEGE SCHOLARSHIPS TOTAL $73,500 Last year, Crow Wing Power provided $61,500 to area high school seniors. In all, 41 students received scholarships. In addition, nine students attending line worker technical colleges received $1,000 scholarships. Scholarship funding is made available from unclaimed capital credits. Crow Wing Power Community Trust donated three $1,000 randomly drawn from our on-line applications.
SEVEN POLLINATOR GARDENS NOW PLANTED AROUND SUBSTATIONS Planting pollinator gardens around several substations was an idea we had a couple of years ago – a way to help the almost extinct Rusty Patch Bumble Bee and Monarch butterflies. With the cost-sharing help from Crow Wing County Soil and Water, we planted four substations two years ago in Crow Wing County. We are hopeful to see mature flowering plants this summer.
We’re proud to report that during 2018, more than $210,000 was donated to local organizations with an emphasis on human health and well-being programs and projects. This charitable giving program has given more than $3.6 million since its inception in 1996. Funding for this program is made possible by members that allow us to round-up their electric bills to the nearest dollar. Operation Round-Up is administered by a separate nonprofit entity called Crow Wing Power Community Trust, a volunteer board.
<<< Left to right: Ellen Haglin, Randy Moritz, Terry Sandstrom, Deb Prazak, Mitch Bouchonville, Judy Boser, and Donna Sutton. (not pictured, Betty Doss)
Last year we applied to Morrison County Soil and Water for planting two additional substations that were suitable in that county. We were grateful to them for their 50% contribution, as well. In addition, 2018 marked the completion of a wonderful three-year project with the City of Baxter. Working with the City, Master Gardeners and volunteer cooperative members, we created the Loren Park educational pollinator garden. Mature plants are a photo of a sister cooperative’s substation (Dakota Electric) pollinator garden. We’re hopeful our plants will be lush and established this year.
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COOP CONNECTIONS – MEMBERS AND BUSINESSES WORKING TOGETHER Crow Wing Power’s Co-op Connections Card has saved members money at participating businesses since it was launched 16 years ago. We’re extremely proud that the program we started was adopted by Touchstone Energy and today 750 Cooperatives nationwide are utilizing it. It helps members to shop local and support the businesses we serve. It’s representative of the cooperative way – members working together.
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PEOPLE’S SECURITY Providing Peace of Mind People’s Security Company, a Crow wing Power subsidiary, was formed 30 years ago so our Cooperative members could secure their homes and businesses from a local, trusted company. People’s Security Company serves over 5,800 residential and commercial customers and has a reputation for exceptional, personal service. Security system technology has changed with the times. A security system can now communication in a variety of ways such as utilizing cellular communication and internet connections; and also allows you to use smart phones and tablets to control your home environment. Controlling your home’s heating, air conditioning, door locks and lighting are all possible from an easy to use app. You can also get notifications sent directly to your cell phone letting you know when your system is armed or disarmed. For example, letting you know when your children have arrived home from school, service providers have arrived and/or left and when guests have arrived to your property. People’s Security Company has seen an increase in demand for video equipment in both commercial and residential settings. Camera technology is now capable of providing clear, crisp quality pictures at affordable prices that can be viewed anytime, anywhere from your cell phone or tablets. Whether its security, freeze up, fire and/or video surveillance, People’s Security Company can help you take control of your environment and help with averting unwanted costly expenses when your home is unattended. You can contact People’s Security at 218-828-4828 or 1-800-735-1440 or at www.PeoplesSecurity.com
CREDIT UNION Historically Low Rates on Loans Crow Wing Power Credit Union was founded 20 years ago and is now more than 5,360 members strong with over $83 million in assets. The credit union is a solid financial institution federally insured through the National Credit Union Administration. The credit union is a not-for-profit business, as is Crow Wing Power. For credit union members, surplus funds are returned to the members in higher deposit rates, reduced loan rates and future service enhancements. As a member of Crow Wing Power you are eligible to join the credit union and take advantage of very competitive loan rates. The credit union offers a wide variety of consumer loans and mortgage options. A credit union Member Service Representative can provide you with the guidance you need in selecting the right loan products for your needs. 4
The credit union is located in the Crow Wing Power office on Highway 371 North in Brainerd. They can be contacted at 218-825-2208 or 877-563-3072. The drive through window is open Saturdays 8:30 – noon. Join the credit union today and experience a financial cooperative along with your membership to Crow Wing Power.
TECHNOLOGY IMPROVEMENTS HELP EFFICIENCIES IN OUTAGE RESTORATION Upgrades to equipment, meters and communication devices now help us know when members are out of power, even before they call. Because of all the devices and mechanisms line crews and controllers now have, not only are restorations quicker, but manpower efficiencies are helping us to reduce overtime and costly weekend restoration. For instance we have a lot of cabin owners who may not come up to the cabin until Friday night. In mid-May, workers detected an area that had a power outage affecting an area where people were not at their cabins on a Thursday. We were able to dispatch line crews to the area to restore power during normal business hours without the cabin owners even calling us. This resulted in our not having to send men out on the weekend. The real-time advantage of the technological equipment we now use is indispensable in providing service.
NEW STATE LAWS NOW PROTECT LINE WORKERS AND PERSONNEL State Legislators passed a law in 2018 to include utility workers in the protective ‘Move Over’ statute. Now, when you see utility vehicles and workers on the side of the road, drivers are to slow down or move over a lane, when possible, to protect those workers, much like law enforcement and emergency vehicles. Another ‘about time’ law will take effect in August, where not only texting and driving is illegal, but driving with a cell phone in hand will also be against the law in Minnesota. It’s all about keeping people safe on the roads.
2018 ENERGY EFFICIENCY REBATES A total of 31% or 11,780 Crow Wing Power members are enrolled in some type of load control program for heating, cooling and water heating. Members reap the benefit by paying a reduced electric rate and Crow Wing Power saves an excess of $2 million a year on high demand wholesale power costs. To help members upgrade to energy efficient equipment, we sent out the following rebates in 2018: ● $20,060 in appliance rebates; ● $1,350 for air conditioning tune-ups; ● $4,641 for energy-efficient lighting; and ● $86,632 for commercial/industrial upgrades.
When members use energy more efficiently, it helps reduce the high demand for electricity during certain periods when wholesale power costs are high and assists in maintaining rates.
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BALANCE SHEET 2018
ASSETS What we own
Cost of Our System We estimate our system has depreciated This gives our system a book value of:
$ 218,208,633 (73,210,339) $ 144,998,294
2017 $ 209,508,058 (69,972,163) $ 139,535,895
Services Added
We Have Other Property and Investments
Services Added 600
use these numbers
400 200 0 2012
2014
2016 2018
Great River Energy & Basin Electric capital credits $ Memberships in and capital credits from other associated organizations National Rural Utilities Cooperative Finance Corp. (Investments required for long-term financing) Capital term certificates Patronage capital credits Other investments Total other property and investments $
36,085,981 836,795
2,486,227 859,670 12,657,373 52,926,046
$
33,025,966 737,186
2,491,877 822,116 13,281,951 50,359,096
$
We Have These Current Assets Cash and cash equivalents Members and others owe us for electrical energy, services, etc. Materials and supplies for line construction and maintenance Prepaid expenses Interest receivable on investments Total Current Assets
Electricity Sold Electricity sold (In Millions of kWhs)
7006 6005 use these numbers
5004 4003
$
5,499,519 8,928,605 2,797,168 68,887 28,386 17,322,565
$
We have deferred debits
$
1,859,502 9,171,801 2,273,931 64,137 25,667 13,395,038
$
43,854
65,781
300
2
Total Assets We Own
0
0
2012
2014
$215,290,759
$203,355,810
2016 2018
2018
LIABILITIES What we owe served Number ofAccounts Accounts Served
50,000
2017
Long-term Debt We owe Rural Utilities Service We owe CoBank We owe National Rural Utilities Cooperative Finance Corporation Total Long-term Debt
$ 90,939,290 5,246,499
$
82,247,919 5,579,562
16,895,114 $ 113,080,903
17,978,300 $ 105,805,781
$
$
40,000 25
We Owe Current Liabilities
30,000 20
Power, materials, etc. Taxes, interest, etc. Security deposits Total Current Liabilities
20,000 15 10,000
10
0
10
2012
2014
8,331,225 3,044,461 533,420 $ 11,909,106
$
8,448,489 2,907,549 511,632 11,867,670
2016 2018
We have deferred credits
4,494,633
2,921,443
0
Total We Owe
NET WORTH Members’ equity in the co-op
6
$129,484,642 2018
Members’ Equity in the Cooperative
$85,806,117
$120,594,894 2017
$82,760,916
STATEMENT OF REVENUE 2018
REVENUE Wholesale Power Costs
EXPENSES Wholesale Power Costs (In Millions of Dollars)
50 40 30 20
Wholesale Power Costs
10 0
Sales of electric energy to members Miscellaneous electric revenues and penalties Non-operating and other income, net (interest income, miscellaneous items)
$
607,448
552,491
Total Revenue
$ 73,469,244
$ 69,361,195
Wholesale power (paid to power suppliers) Other operating expenses (administration, sales, maintenance, taxes, etc.) Depreciation of utility plant Interest expenses on long-term debt
$
$
14,706,110 5,778,399 2,647,103
15,556,694 5,550,346 1,835,493
Total Expenses
$ 72,620,808
$ 70,061,937
2014
2016
2018
Capital Credit Retirements (Thousands of Dollars)
1,200
1200
1,100
1100
71,839,732 1,022,064
$
49,489,196
Patronage capital income before generation and transmission capital credits $ Patronage capital from Great River Energy, Basin Electric and other associated cooperatives
Net Patronage Capital (Income) 2012
2017
848,436
(700,742)
$
1,267,566
1,968,308
4,203,864
Patronage Capital
47,119,404
$
3,355,428
$
67,844,958 963,746
2018
Accumulated patronage capital—beginning of year Net patronage capital (Income) Retirement of patronage capital
$
Accum. Patronage Capital - End Of Year
$ 85,806,117
2017
82,760,916 4,203,864 (1,158,663)
$
82,994,573 1,267,566 (1,501,223)
$ 82,760,916
1,000
1000
900
900
800 700 0 0
800 700
2012
2014
2016
2018
2018 ELECTRICAL ENERGY SALES STATISTICS Year Ending December 31, 2018
COMPARATIVE OPERATING STATISTICS Years Ending December 31, 2017 and December 31, 2018
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2018
Type of Service
KWHs Sold
Rural Residential Commercial/Industrial Irrigation Public Street Light
444,489,877 178,551,314 4,174,529 433,336
Total
Number of accounts served New services added this year Miles of line energized Member accounts per mile Total KWH purchased through GRE & Basin Total KWH sold Cost per KWH sold Average cost per KWH to member Average residential KWHs used per month Average residential monthly bill Plant investment per member Percent of member equity—ownership
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53,013,730 18,089,365 647,158 89,479
627,649,056
$ 71,839,732
2018
2017
44,627 593 5,518 8.09 666,382,713 627,649,056 0.0788 0.1171 890 106 4,890 39.9%
44,139 463 5,497 8.03 615,634,024 577,893,688 0.0815 0.1200 835 102 4,746 40.7%
$ $ $ $
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CROW WING POWER P.O. BOX 507, HIGHWAY 371 NORTH • BRAINERD, MN 56401 (218) 829-2827 OR 800-648-9401 WWW.CWPOWER.COM
Current Connection Special Edition
(ISSN 1068-1949) USPS 456-180 Published bimonthly by Crow Wing Power, 17330 State Hwy. 371 Brainerd, MN 56401. www.cwpower.com
Editor: Char Kinzer Periodical postage paid at Brainerd, MN. (Postmaster): Send change of address form 3579 to: Current Connection, Crow Wing Power, P.O. Box 507, Brainerd, MN 56401. Annual Subscription Rates: Members - $3.00 Non-Members - $3.50
BOARD PRESIDENT Your Board of Directors is made up of members like you. They are very dedicated and represent you well. I’ve been a member of this cooperative all my life and am proud to be one of your Directors for many years and President of the Board for two years. Employees, management and the board work hard to serve your needs and we will continue to work in your best interest in the future. Bob Kangas
DIRECTORS Nine board members, elected by our electric member/owners, direct Crow Wing Power. The board determines policies and procedures and has fiduciary responsibilities. Directors attend ongoing training to keep them abreast of current issues relating to the electric industry. The board meets the third Thursday of each month at 9:30 a.m. Back Row: (left to right) LuAnn Nelson, Bryan McCulloch, Paul Koering, Ric Larson, Gordon Martin Front Row: Doris Mezzenga, Bob Kangas, Dwight Thiesse, Gert Roggenkamp