Missouri River Energy Services 2025 Annual Report

2025 Annual Report

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Connected Through

Service

Connected Through

People

Connected Through

Community Connected Through

the Future

4 Who We Are 6 MRES Members 8 About MRES from the Chair of the Board 10 Message and President & CEO 12 MRES and WMMPA Boards of Directors 15 Executive Team 16 Power Supply/Generation Facilities 18 Comparative Highlights Through Service 20 Connected Westbrook Answers The Call To Serve Through People 24 Connected A Champion For Community In Lakota Through Community 28 Connected Culture Is What Connects Flandreau Through the Future 32 Connected Hawarden Builds For The Future

Table of Contents

36 The Power of Good Planning: Why Rate Studies Matter 37 Prioritizing Excellence 38 Year of Progress: 2025 42 Building Financial Value 43 2025 Power Awards 3

Who We Are

At Missouri River Energy Services (MRES), everything begins and ends with our members. From small towns to growing regional centers, MRES serves 61 municipal utilities that depend on reliable, affordable electricity and services to help keep their communities thriving. These hometown utilities power the daily life of approximately 175,000 customers and a combined population of about 333,000 people.

Spanning four states — 18 in Iowa, 25 in Minnesota, six in North Dakota and 12 in South Dakota — each utility operates independently within its own community, and while they are independent, they share a common purpose: delivering dependable energy while supporting local growth and quality of life. Through MRES, our member utilities gain strength of collaboration while maintaining the local decision-making that defines community-owned power.

For more than six decades, MRES has partnered with our members to meet the evolving needs of their communities. In 2025, MRES supplied just over 57% of members’ total energy requirements, complementing hydropower from the Western Area Power Administration and other resources to ensure a reliable and balanced energy portfolio.

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MRES is guided by a 13-member board of directors elected from among our member utilities. Generation and transmission resources used by MRES are financed through the Western Minnesota Municipal Power Agency (WMMPA), a separate but closely aligned organization for which MRES provides management and operational services. WMMPA is governed by a seven-member board of directors elected from among the 24 of 25 Minnesota members of MRES. Together we are connected by purpose; we are a membership built on trust, cooperation and a shared desire to serve.

MRES is an organization where excellence of work and integrity of character are daily expectations for all employees, board members and others associated with MRES on a professional basis. The following Core Values describe those expectations in greater detail:

Core Values

RELIABILITY

We are there when you need us.

ACCOUNTABILITY

We can be counted on to do what we say we will.

HONESTY

We will give our members the whole story — good news or bad.

COMPETENCE

Excellence in product and performance will be the objective of every MRES employee, with the end result being the achievement of the MRES corporate goals that are consistent with member expectations.

CREATIVITY

We will recognize problems that limit the success of our members and strive to solve them.

Creative solutions are encouraged, and failure will be viewed as a temporary setback to be learned from for future problem-solving efforts.

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Our

Members

61 Owned by

municipal electric utilities

serving approximately

6

333,000 people

NORTH DAKOTA

Cavalier • Hillsboro • Lakota Northwood • Riverdale • Valley City

SOUTH DAKOTA

Beresford • Big Stone City • Brookings Burke • Faith • Flandreau • Fort Pierre • Pickstown Pierre • Vermillion • Watertown • Winner

MINNESOTA

Adrian • Alexandria • Barnesville • Benson • Breckenridge Detroit Lakes • Elbow Lake • Henning • Hutchinson • Jackson Lake Park • Lakefield • Luverne • Madison • Marshall • Melrose Moorhead • Ortonville • Sauk Centre • St. James • Staples Wadena • Westbrook • Willmar • Worthington

IOWA

OUR VISION To be the preferred provider of energy and energy services that adds value to member communities.

OUR MISSION To enhance the value of member utilities to their communities by supplying reliable, cost-effective, long-term energy and energy services in a fiscally responsible and environmentally sensitive manner.

Alton • Atlantic • Denison • Hartley • Hawarden Kimballton • Lake Park • Manilla • Orange City • Paullina Pella • Primghar • Remsen • Rock Rapids • Sanborn • Shelby Sioux Center • Woodbine

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About MRES Serving approximately

333,000 people

Formed in

1965 Total generation capacity

1,174 MW

Approximately

45%

of our members’ power comes from

renewable resources 8

Bright Energy Solutions® program has reduced peak demand by and resulted in in rebates

100 MW $31.7 million 11% lower rates

Approximately when comparing the 2025 MRES rate to estimated regional wholesale rates Reserved Capacity Agreements with

20 members for 155.8 MW of generation capacity

Helping communities thrive and prosper for

60 years 9

Message from the

Chair of the Board and President & CEO Across the 61 communities served by MRES, public power is built on connection — connection to our hometowns and to the future we are creating together. Throughout 2025, that spirit of connection was evident across MRES and within our member utilities, reflecting this year’s theme: Connected by Purpose.

Vernell Roberts

Chair of the Board

At the center of that purpose is our mission: to enhance the value of member utilities by supplying reliable, cost effective, long-term energy and energy services in a fiscally responsible and environmentally sensitive manner. That mission guided every accomplishment this year.

In 2025, MRES supplied just over 57% of our members’ total energy needs through a diverse portfolio, while maintaining wholesale rates about 11% below the regional average. Strong financial performance included a $37 million net surplus, $17 million above budget, and a 195% debt service coverage ratio, exceeding board targets. We completed 15 cost of service studies to help communities align rates with actual costs, realized a $9.2 million investment tax credit, and generated savings through bond refinancing.

Strengthening the System

Long-term infrastructure investments continue to bolster system reliability and prepare for future needs.

On the transmission side, progress advanced on the Big Stone South to Alexandria 345 kilovolt (kV) project, the Alexandria to Big Oaks 345 kV line, and the Appleton to Benson 115 kV project in western Minnesota. On the generation side, construction continued on the Brookings Solar Project in South Dakota, expanding renewable resources and enhancing operational flexibility. We also advanced permitting for the proposed Toronto Power Plant, a 145 megawatt (MW) dual-fuel natural gas facility designed to provide dependable capacity when it is needed most.

Matt Schull

President & CEO

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Our members continue making important local investments. Members, like Willmar Municipal Utilities, are installing diesel standby generators for emergency backup, strengthening community and regional reliability. In Hawarden, Iowa, advancements in metering, underground distribution and transmission upgrades are improving efficiency and preparing the community for long term growth.

Members Making a Difference

Public power is rooted in service. Across our membership, utilities continue to support cultural events, partner on economic development, and respond when challenges arise. Communities across southeastern South Dakota — including Flandreau and Vermillion — and neighboring Luverne, Minnesota, are finding innovative ways to expand opportunity, from improving child care access to enhancing quality of life.

Whether protecting infrastructure during floods or restoring power after major storms, our members consistently show up for their neighbors. In places like Lakota, North Dakota, local leaders often wear many hats, demonstrating the spirit of public power, where service extends beyond job titles.

Connected Through Community

Looking Ahead

In 2025, MRES partnered with the Navajo Tribal Utility Authority, in coordination with the APPA, to help bring electricity to families in New Mexico. Crews from MRES and member utilities, including Westbrook Public Utilities, spent a week connecting homes in the Navajo Nation that had never had power, demonstrating the collaborative nature of public power and mutual aid.

We remain united in this effort as we prepare for the needs of tomorrow — Connected by Purpose and united in service.

MRES’ cost share programs and outreach initiatives amplify the impact of local events, education efforts and community programs across the region.

Advocacy that Protects Reliability and Affordability

As policies evolve, advocacy remains essential to protecting the longterm success of public power. MRES actively engages with lawmakers, regulators and industry partners to represent our members’ interests.

Speaking with a unified voice helps shape balanced energy policy that supports local decision making, protects affordability and reliability, and positions our communities to navigate emerging challenges.

The energy industry continues to evolve as new technologies, increasing demand and a shifting regulatory landscape shape the future. While 2025 marked meaningful progress, continued collaboration remains essential.

Through thoughtful planning and a shared commitment to those we serve, MRES and our members are well positioned to meet these challenges while continuing to deliver the reliable, affordable service customers expect.

Thank you for your continued partnership and dedication to public power.

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Board of Directors

Vernell Roberts Chair

Missouri River Energy Services

1 4

5

Steve Meyer

First Vice Chair

20 Years of Service Brookings Municipal Utilities Brookings, South Dakota

11 Years of Service Detroit Lakes Public Utilities Detroit Lakes, Minnesota

Scott Hain

Murray Hulstein

15 Years of Service Worthington Public Utilities Worthington, Minnesota

5 Years of Service Sioux Center Municipal Utilities Sioux Center, Iowa

Second Vice Chair

Third Vice Chair

3 All board members serve

3-Year Terms

12

Dave Carlsrud

Fourth Vice Chair

6 Years of Service Valley City Public Works Valley City, North Dakota

Steve Lehner

Ted Cash

18 Years of Service Watertown Municipal Utilities Watertown, South Dakota

6 Years of Service ALP Utilities Alexandria, Minnesota

Secretary/Treasurer

Director

Kevin Georgius

Brad Palmer

Less than 1 Year of Service Denison Municipal Utilities Denison, Iowa

5 Years of Service Pierre Municipal Utilities Pierre, South Dakota

Director

Director

John Prescott Director

5 Years of Service City of Vermillion Vermillion, South Dakota

Travis Schmidt Director

Less than 1 Year of Service Moorhead Public Service Moorhead, Minnesota

Matt Van Schouwen Director

8 Years of Service Benson Municipal Utilities Benson, Minnesota

2 Years of Service Orange City Municipal Utilities Orange City, Iowa

Board of Directors

Rob Wolfington Director

Scott Hain President

20 Years of Service Worthington Public Utilities Worthington, Minnesota

Western Minnesota Municipal Power Agency

Ted Cash

Travis Schmidt

Rob Wolfington

Scott Grabe

Vernell Roberts

Pete Wyffels

8 Years of Service ALP Utilities Alexandria, Minnesota

6 Years of Service Moorhead Public Service Moorhead, Minnesota

13 Years of Service Benson Municipal Utilities Benson, Minnesota

Less than 1 Year of Service Staples Water & Light Staples, Minnesota

18 Years of Service Detroit Lakes Public Utilities Detroit Lakes, Minnesota

Less than 1 Year of Service Marshall Municipal Utilities Marshall, Minnesota

Vice President

Secretary

Treasurer

Director

Director

Director

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Board Retirements David Schelkoph

David Schelkoph served 26 years in the electric utility field and, in 2025, retired from Marshall Municipal Utilities (MMU) and from the WMMPA board after serving five years. Prior to joining MMU in 2020, he served as city administrator and utility manager in Valley City, North Dakota. During his tenure at MMU, David successfully led major infrastructure advancements, including moving electric service lines underground and adding a local solar farm. Known for his steady leadership and sharp wit, he made a lasting impact on his community and colleagues. His contributions to MMU and WMMPA reflect a career defined by service and dedication. Photo: Dave Schelkoph (left) and Scott Hain (right)

Rory Weis

Rory Weis built a career grounded in service and a strong commitment to community. He retired in 2025 after eight years on the MRES board, including service as 3rd Vice Chair for two years, and active involvement with the Iowa Association of Municipal Utilities. With more than 30 years as electric/water superintendent for the City of Woodbine, Iowa, and 13 years as general manager at Denison Municipal Utilities, he was a steady and trusted leader. His service to his community included more than 30 years as a volunteer firefighter. Rory’s impact will be felt for years to come.

Photo: Vernell Roberts (left) and Rory Weis (right)

Guy Swenson

Guy Swenson retired in 2025 following a long and dedicated career in public power, including 20 years as telephone, electric and cable manager for Barnesville Municipal Utilities in Minnesota. He also concluded his service on the MRES and WMMPA boards, where he served for a decade on the WMMPA board, including four years as vice president, and five years on the MRES board. A U.S. Marine Corps veteran and a past recipient of the APPA Larry Hobart Seven Hats Award, Guy showed commitment to his community that was deeper than a title, and an unwavering commitment to strengthening public power.

Photo: Vernell Roberts (left) and Guy Swenson (right) 14

Executive Team

Matt Schull

President & CEO

Missouri River Energy Services

Alex Abplanalp

Vice President & Chief Strategy Officer Less than 1 Year of Service

Tammie Krumm

Vice President of Human Resources & Administration

Deb Birgen

Vice President of Government Relations 24 Years of Service

Rich Kruthoff

Vice President & Chief Information Officer 25 Years of Service

Tim Blodgett

Vice President of Member Services & Communications 4 Years of Service through April 2025

Chris Olson

Vice President & Chief Financial Officer 4 Years of Service

3 Years of Service

Dan Harmelink

General Counsel & Vice President of Legal 8 Years of Service

Terry Wolf

Vice President & Chief Operating Officer 25 Years of Service

8 Years of Service

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OUR DIVERSIFIED POWER SUPPLY MRES has built a diverse portfolio of generation resources to reduce risk, increase reliability and focus on environmental stewardship. Our members also are supplied by hydropower from the federal government’s Western Area Power Administration (WAPA).

MRES POWER

Market Purchases Natural 2% Fuel Oil LESS THAN Gas

SUPPLY MIX

0.1%

1%

Hydro

Hydro

44%

Wind Solar Nuclear Coal

Coal

52%

Natural Gas Diesel/Fuel Oil Market Purchases

Nuclear, Solar & Wind

Fuel Oil

ALL LESS THAN

LESS THAN

0.1%

Hydro

0.1%

42%

Market Purchases 18%

MRES is committed to creating a clean, reliable energy future, and in 2025 approximately 45% of our members’ power came from renewable resources.

2025 Wind 3%

Natural Gas

Solar

5%

LESS THAN

Nuclear Coal 26%

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6%

0.1%

GENERATION FACILITIES

Western Area Power Administration’s Hydroelectric Facilities

Wind Projects

87.4 MW

Laramie River Station

• Rugby (ND) - 40 MW • Odin (MN) - 20 MW • Marshall (MN) - 18.7 MW • Worthington (MN) - 3.7 MW

Coal-fired

Watertown Power Plant

Exira Station

Fuel oil

353 MW

280 MW 140 MW

Natural gas/Fuel oil

65 MW

Red Rock Hydroelectric Project

43.1 MW

Point Beach Nuclear Plant

Reserved Capacity Agreements with 20 members Fuel oil

155.8 MW

33.8 MW Nuclear

Solar Projects

Solar Under Construction

• Pierre (SD) - 1 MW • Marshall (MN) - 10 MW + 5 MW battery storage

• Brookings

16 MW

5 MW

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Comparative Highlights 2025

2024

2020

Operating Revenues (millions)

$280

$252

$245

Operating Revenues, including WAPA Member Revenue (millions)

$337

$305

$290

Operating Expenses (millions)

$250

$220

$182

Net Operating Income (millions)

$30

$32

$63

$1,071

$1,052

$581

Unrestricted Cash and Investments (millions)

$268

$277

$229

Days Cash on Hand (Days of Operating Expenses)

428

505

490

Total Assets (millions)

$1,211

$1,200

$1,133

Net Position (millions)

$524

$487

$361

Debt Outstanding (millions)

$558

$580

$648

Average Cost of Debt

3.4%

3.4%

3.5%

Debt Service Coverage

195%

172%

193%

Debt as Percent of Capitalization

52%

54%

64%

Equity Percent of Capitalization

48%

46%

36%

FINANCIAL:

Plant in Service (millions)

18

5 2024

2025

MEMBER ENERGY REQUIREMENTS (GWh):

2020

Energy Provided by MRES

2,995

2,906

2,883

Energy from WAPA

1,894

1,900

1,906

348

342

350

5,237

5,148

5,139

Energy from Coal

26%

17%

14%

Energy from Natural Gas

5%

6%

2%

Energy from Fuel Oil

<0.1%

<0.1%

<0.1%

Energy from Nuclear

6%

6%

6%

Energy from Hydro

42%

42%

40%

Energy from Wind

3%

4%

4%

Energy from Solar

<0.1%

<0.1%

<0.1%

18%

25%

34%

MRES Peak Demand

554

554

536

Total Member Peak Demand

978

974

960

Average MRES Power Supply and Transmission Rate

7.1

6.8

6.8

Average Blended Cost of Energy Supplied by MRES and WAPA

5.8

5.4

5.2

Energy Provided by Others Total Member Energy Requirements

MEMBER RESOURCE MIX:

Energy from Market Purchases

POWER SUPPLY MEMBER PEAK DEMAND (MW):

MEMBER WHOLESALE RATES (CENTS PER kWh):

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Connected Through

Service...

Delivering reliable energy and support that powers everyday life.

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Westbrook Answers The Call To Serve The conversation started with a question from Matt Schull, president and CEO of MRES. At an area meeting, Schull approached Dan Joel, superintendent of Westbrook Public Utilities, about a project called Light Up Navajo, a national initiative led by the Navajo Tribal Utility Authority and APPA to bring electricity to homes in the Navajo Nation that have never had power.

Joel had never heard of it.

“He explained it to me,” Joel said. “And I thought that’d be good for Westbrook, but I had to tell him, ‘You don’t realize, we have three people and one journeyman. It’s a little tougher for a small utility.’”

Westbrook Public Utilities serves a town of roughly 700 people with a crew of just three. Sending two-thirds of the workforce out of state for a week in April 2025 wasn’t a small decision. The desire to serve was there. The challenge was ensuring their own community would still be covered.

WESTBROOK

Southwestern Minnesota Population: Approximately 700 Joined MRES: 1972

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That’s where connection made the difference.

Neighboring utilities stepped forward to provide mutual aid coverage while Westbrook’s crew was gone. “They don’t get enough credit,” Joel said. “If it hadn’t been for them, we would have never been able to go.” With that support in place, Joel and Rene Celedon, Westbrook apprentice lineworker, committed to the project.

Until those initial meetings, neither had realized that thousands of homes in the United States still lack electricity. Learning that reality made the decision clearer.

“It was a good cause,” Joel said. “There’s a little bit of selfishness, too, to go somewhere different, experience new conditions. But at the end of the day, you’re there to help people.”

Celedon agreed and stepped forward to participate. “That’s how it got started,” Celedon said. “He filled me in after every meeting, and we went with an open mind.”

“Probably 12-hour days, very demanding, but by choice.”

Rene Celedon, Apprentice Lineworker Westbrook Public Utilities

Arriving along the Arizona–New Mexico border brought new terrain and long days. The rocky ground sometimes required specialized digging equipment. Schedules stretched from early morning until evening. “Probably 12-hour days,” Celedon estimated. He described the work as “very demanding, but by choice.”

The leadership on site made a strong impression. Foremen took time to explain expectations and coach volunteers. Celedon, whose background includes electric, water and gas operations and has spent much of his career focused on water systems, appreciated the hands-on instruction.

“It was a very, very good learning experience for me,” Celedon said.

“I brought back what I learned and I’m still sharing it.”

Joel also valued the technical exchange. From differences in sagging lines to pole-setting specifications, there were lessons everywhere.

“They never cut corners,” he said. “Even when we set a pole that wasn’t quite right, it wasn’t ‘just leave it.’ We pulled it out and fixed it.”

But the most powerful moments came at the point of connection.

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“Nobody in the United States should be without power.”

Dan Joel, Superintendent, Westbrook Public Utilities One family had a young daughter who made signs in the driveway welcoming the crew. The team had worked late into the night finishing the line so they could return the next morning for the initial powerup. Her parents kept her home from school so she could see the lights come on for the first time.

“She was just ecstatic,” Joel said. “If they’re keeping their daughter out of school to see that, you know it’s a big deal.”

Gratitude extended beyond the job sites. “It didn’t matter if you were at the gas station or the restaurant or the hotel,” Joel said. “Everybody knew why you were there. And everybody was very thankful.”

Working alongside other crews and MRES distribution teams strengthened the experience.

Within a couple of days, the group found its rhythm.

“Everything was working like an assembly line,” Joel said.

“Everybody found their niche.”

Light Up Navajo is often described as “mutual aid without a storm.” For Joel, the phrase carries weight.

After hurricanes or tornadoes, utilities mobilize to restore power in days or weeks. Yet some families in the Navajo Nation have waited generations.

“Nobody in the United States should be without power,” he said simply.

The week was professionally rewarding and personally meaningful.

But both men are clear about perspective. “It was rewarding,” Joel admitted.

“I got a lot out of it. But what Navajo Nation got was a lifetime of value.”

With thousands of homes still waiting for connection, the need remains. And Joel believes participation isn’t about size, it’s about commitment.

“If Westbrook, with three people in our line crew and a town of 700, can send two-thirds of our crew down and support it,” he said, “that means everybody can help out somewhere.”

Through MRES and through the support of neighboring communities, Westbrook proved that even a small utility can make a lasting difference.

That’s what it means to be connected through service.

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What you see here is only part of Joel and Rene’s story.

Scan the QR code to watch a video and learn more.

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Connected Through

People...

Building strong relationships that drive collaboration and shared success.

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When Amie Vasichek opened the email telling her she had been selected for the APPA’s Larry Hobart Seven Hats Award, her first reaction wasn’t celebration, it was skepticism.

“Honestly, I thought it was spam,” Vasichek said with a laugh.

“I assumed it was junk mail or someone pulling my leg.”

Then additional messages arrived. Congratulations began coming in from MRES representatives and others in the public power network.

“That’s when it finally hit me,” she said. “I thought, ‘Oh my gosh, this is real.’ It was a very cool honor, especially because I had no idea I was even being considered.”

A Champion For Community In Lakota

“My goal has always been to leave the community better than I found it.”

Amie Vasichek, City Auditor Lakota Municipal Utilities

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For Lakota, North Dakota, Vasichek’s reaction feels fitting. In small towns, recognition often arrives quietly and without expectation.

The Seven Hats Award honors leaders of small public power utilities who take on wide-ranging responsibilities with limited resources. For Vasichek, the town’s city auditor, that has been her reality for 17 years. “I never expected to build a career in city government,” she said. After moving to Lakota 18 years ago, she took a chance on a local position. “I thought, ‘Why not give it a try?’ Seventeen years later, I’m still here.”

She was just 23 or 24 at the time. “The mayor joked I was the youngest city auditor in the state,” she said. “I’m not sure he fact-checked that, but I embraced the opportunity.”

In a small community, wearing many hats isn’t just a phrase, it’s a mindset. “Every day requires adaptability,” Vasichek said. “You can walk in with a plan, and within an hour everything shifts. You have to pivot quickly and approach each situation with a fresh perspective.” And the role doesn’t stop at the end of the day. “It extends into evenings and weekends,” she said. “Serving a small community requires flexibility and commitment.”

That commitment is grounded in a simple philosophy.

“My goal has always been to leave the community better than I found it,” she said.

“Serving a small community requires flexibility and commitment.”

Amie Vasichek

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LAKOTA

County seat of Nelson County in northeast North Dakota Population: Approximately 680 Joined MRES: 1979 Vasichek carries that mindset into her work and volunteer efforts, from economic development to local organizations that reinvest directly in Lakota. “It’s about supporting the people who live here,” she said.

Across every initiative, Vasichek returns to one idea: shared responsibility. “If you see a challenge, ask how you can be part of the solution,” she said. “It’s easy to point out problems. It’s more impactful to contribute to progress.”

She also brings that perspective to the Nelson County Health System board, where her business background adds value. That work has helped advance long-term efforts like establishing a satellite clinic in Lakota.

That perspective matters as small communities look to engage the next generation of leaders. “I think it starts with conversation,” she said. “Instead of asking why someone isn’t involved, ask what they want to see happen and how they might help achieve it.”

“It’s taken years of collaboration,” she said. “We’re not finished, but we’re much closer.”

Housing has been another priority. New singlefamily homes created movement in the market, opening opportunities for others and strengthening the community overall.

In Lakota, that mindset is visible, in Main Street improvements, expanded housing and local events.

And it shows up in a city auditor who nearly deleted the email that recognized her for doing exactly what she set out to do: serve her community well.

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There’s more to Amie’s story!

Scan the QR code to learn more about her commitment to improving Lakota’s community.

APPA Larry Hobart Seven Hats Award APPA’s Larry Hobart Seven Hats Award recognizes leaders of small public power utilities serving 2,500 or fewer electric meters. The award highlights excellence across multiple disciplines often required in small communities, including planning and design, administration, public relations, field supervision, accounting, human resources and community leadership.

Established in 1966 and later renamed in honor of longtime APPA leader Larry Hobart, the award celebrates the versatility and dedication required to lead community-owned utilities successfully.

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Connected Through

Community...

Strengthening the places we serve through meaningful impact and partnership.

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In Flandreau, community isn’t just a word, it’s a shared value. With a population of about 2,400 in east-central South Dakota, Flandreau reflects its community connection through steady investment in culture and infrastructure.

“We’re a small community with a lot of rich culture and events that highlight that culture,” said City Administrator Cohl Turnquist.

Established in 1902, Flandreau balances its history with forward momentum. An active museum preserves its past, while well-used parks and a dam popular with walleye anglers provide recreation. A bustling downtown supports a robust business base, including several retail shops, restaurants, industrial operations and manufacturing.

The community’s partnership with the Flandreau Santee Sioux Tribe sets it apart. The tribe owns roughly a quarter of the property in town and plays an active role in civic life. Annual events such as Flandreau Friday celebrates the cultures that define the community. Hosted on Main Street, the event features food and cultural representation from across the area.

Culture Is What Connects Flandreau

“We’re a small community with a lot of rich culture and events that highlight that culture.”

Cohl Turnquist Flandreau City Administrator

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FLANDREAU

East-central South Dakota Population: Approximately 2,400 Joined MRES: 1974 During the summer months, the city band performs weekly, and the nearly 100-year-old Crystal Theatre continues to bring residents together for youth productions and community performances. Through co-sponsorship support from MRES, the city has helped fund youth programming at the Crystal Theatre. In partnership with the city’s summer recreation program, children spend a week rehearsing before presenting two performances for the community. “We’ve used the co-sponsorship for the last two summers,” Turnquist said. “The kids love it and the parents love it.” Similar support helps sustain Flandreau Friday.

“As a public power community and member of MRES, we feel our role goes beyond keeping the lights on; our role includes partnering with our community to discern objectives and new services,” Turnquist said. “Sometimes we’re the economic engine with leveraging assets; the mechanism to find what works best for our community that would result in a better quality of life.” That responsibility includes careful infrastructure planning and ensuring that growth and expansion are done in a responsible manner.

“As a public power community and member of MRES, we feel our role goes beyond keeping the lights on.”

Cohl Turnquist

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A key tool in that effort is promoting energy efficiency programs.

Through Bright Energy Solutions (BES), Flandreau is able to provide rebates that reduce upfront costs and encourage reinvestment.

“BES has been a great tool for folks in the community to cut down on the cost and the resolution of existing facilities to create some new efficiencies,” Turnquist said. “We’ve used it for schools, churches, manufacturing and the tribe has used it.”

Lighting upgrades are the most common improvements, while the tribe has implemented significant HVAC enhancements. The city promotes rebates through social media, printed materials in City Hall and proactive outreach when new projects surface. “We’ll catch wind of different projects in town and we’ll reach out to them,” Turnquist said.

One of the most transformative projects currently underway is a new 150-slot daycare facility led by the local Boys & Girls Club. The project, nearing completion, will utilize BES rebates to build efficiency into the facility.

“We all knew there was a daycare desert, but we did a community survey,” Turnquist said. Data revealed a shortage of childcare spots. With clear

evidence in hand, a collective impact of the City of Flandreau, the Flandreau Santee Sioux Tribe and the Boys and Girls Club of Moody County successfully leveraged a $2 million Community Development Block Grant from the State of South Dakota, becoming the first of two cities awarded under a pilot program addressing the state’s child care shortage. The Boys & Girls Club raised $1.5 million in one year, the tribe contributed several hundred thousand dollars for furnishings and the city provided the land.

For municipal utilities like Flandreau, offering comprehensive efficiency programs would be difficult without partnership. “BES does more than make it easier for residents and businesses — they are the engine that drives it,” Turnquist said of MRES. “Without MRES, we wouldn’t have the opportunity to do these for our customers. They are the lifeline that pushes these initiatives forward.” That connection ensures that local residents and businesses benefit from professional expertise and financial support typically associated with much larger communities.

For Flandreau, meaningful growth begins with engagement and an understanding that public power is more than a service, it’s a partnership. By aligning energy efficiency, economic development and cultural investment, the community demonstrates what it truly means to be connected by purpose.

Bright Energy Solutions BES is MRES’ energy efficiency program available to member utilities.

Common upgrades in Flandreau include lighting retrofits, HVAC improvements and appliance upgrades in schools, commercial facilities and community buildings. Rebates reduce upfront project costs, encourage reinvestment and support local economic development. Through BES, communities like Flandreau are able to strengthen facilities, lower energy use and invest savings back into the services that matter most.

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To see this story in action and learn more about Flandreau’s community partnerships, simply scan the QR code.

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Connected Through

The Future...

Innovating today to create a smarter, more sustainable tomorrow.

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Hawarden Builds For The Future

In Hawarden, progress doesn’t always arrive with fanfare. Sometimes, it comes quietly, one underground line, one upgraded meter, one carefully planned project at a time.

With a population of roughly 2,700 residents, Hawarden is a close-knit rural city in Sioux County, Iowa, nestled along the Big Sioux River near the South Dakota border. The community blends deep history with forwardlooking leadership. After significant flooding in 2024 damaged homes and businesses, the town demonstrated its resilience, rebuilding with purpose.

That same spirit drives the modernization of Hawarden’s municipal utilities.

“We have all the utilities — gas, electric, water, sewer, telecom — and we only have two guys in each department,” said Travis Waterman, Hawarden’s public works director. “With that, we have to work together. No one’s able to be just in their department.”

Travis Waterman

HAWARDEN

Sioux County, Iowa, along the Big Sioux River Population: Approximately 2,700 Joined MRES: 1965

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“... the natural progression as we changed out the services to homes and meter sockets was upgrading everything to tie it all together.”

Travis Waterman, Public Works Director Hawarden Public Utilities

For Hawarden, this isn’t a hindrance; it has fostered collaboration and innovation.

As the city began converting overhead electric lines to underground starting more than 10 years ago, leaders recognized an opportunity to modernize their metering infrastructure as well.

“We started an overhead-to-underground construction project, so the natural progression as we changed out the services to homes and meter sockets was upgrading everything to tie it all together,” Waterman explained.

The city had previously implemented automated meter reading (AMR), but advanced metering infrastructure (AMI) allowed Hawarden to take the next step.

“It’s really helped streamline billing and meter reading,” Waterman said. “Instead of two billing cycles, we’re down to just one.”

For staff, that time savings matters. AMI reduced the need for manual rechecks and eliminated hours spent physically reading meters.

Access to better data has also strengthened customer service.

“If there’s any questions or discrepancies, our billing clerk can access and give a daily usage report, even to the hour,” Waterman said. In one instance, the system helped identify a continuously running sump pump after a customer questioned unusually high usage.

Outage response has improved as well. “We get a text message when a meter loses voltage. We’ll know the power is out even before the customers sometimes,” he noted.

Membership in MRES was instrumental in the transition.

“MRES was essential,” Waterman said. “They went out and proofed the vendors and did all the legwork. We followed the guidance of MRES and their expertise.”

For Hawarden, finding a metering solution that integrated electric, water and natural gas was critical.

Many vendors could address electric and water, but not gas. Through collaboration and pilot testing, Hawarden became a test site for natural gas readers.

“We became a test facility,” Waterman explained. “We figured out we could use water nodes for our specialty meters. Now the vendor is retrofitting their water meters to use as gas meters. Hawarden started doing it and it works great. We’re just happy to not have to go out and read them.”

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Electric Buses Powering the Next Generation

The city piloted 44 specialty gas meters and continues expanding the system. Today, electric AMI is fully implemented, and water and gas nodes operate using hourly readings that transmit data.

Modernization extends beyond metering. In spring 2025, Hawarden brought a new substation online, completing a major reliability effort that has brought the community to 98% underground electric service.

Hawarden’s forward-looking mindset extends to its school district.

Through a grant, the district secured two electric school buses — marking another step toward a more sustainable future. The city installed two dedicated transformers to support the charging infrastructure.

“We’ve made it a priority to give our community reliable electricity,” Waterman said. “We had some windstorms last year and only had a few minor issues compared to other communities with overhead lines. We’re in really good shape for a long time.”

Looking ahead, Hawarden is exploring other opportunities to help customers track and have more control of their energy usage.

The city is also updating its demand response system to better manage load during peak periods, with work completed in-house.

“When you’re doing it yourself, it’s a slow process,” Waterman said.

In Hawarden, modernization hasn’t changed the community’s character. It has strengthened it. By partnering with MRES and committing to long-term infrastructure investments, Hawarden is proving that innovation isn’t limited by size, it’s driven by purpose.

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Scan the QR code to hear more from Travis about Hawarden’s steady modernization and efficiency improvements.

“They can see what that load is,” Waterman said, noting that the new infrastructure provides valuable data and insight into how electric transportation impacts the local grid.

The project reflects a broader theme in Hawarden: prepare today for the needs of the future.

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The Power of Good Planning: Why Rate Studies Matter

When a utility’s governing board gathers to talk rates, the discussion is often multifaceted. They must balance maintaining reliable electric and water systems with replacing aging equipment, all while ensuring today’s decisions don’t create future challenges. That’s why MRES’ Rate Study Program exists: to help member utilities set rates that reflect real costs and community needs.

“MRES started the program in 1998 because we wanted to help ensure our members were financially sound,” said Tim Miller, MRES director of rates. Miller assists members with rate studies alongside analysts Evan Leebens and Jordan Unterbrunner. If a utility can’t meet its obligations, the impacts ripple across the community. This shared responsibility is a cornerstone of joint action, and why MRES covers half the cost of electric rate studies, making the process accessible for communities of all sizes.

Rate studies matter most when the stakes are high. Across the region, utilities are planning major capital investments: replacing infrastructure near the end of its life, upgrading distribution systems and adding local generation. Many of these projects take years to complete and decades to pay off. With so much to consider, a study helps lay out the full picture: cash reserves, debt timing, projected power costs and the rate path needed to remain stable.

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MRES has completed roughly 360 studies, including 275 electric, along with water and wastewater studies as requested. Each study is tailored, because every community is different — accounting structures, customer mix and priorities all vary. MRES’ role is both technical and relational.

And the process is thorough. After a contract and data request, the team builds financial and cost-of-service models, followed by a work session with local staff. Revisions lead to a concise report and a board presentation focused on key decisions and impacts, helping provide clarity and confidence.

An added benefit is the independent perspective. As Leebens noted, communities often value a “third-party, non-biased view.” When facts are clear and communicated early, decisions tend to move forward more smoothly.

Ultimately, rate studies support long-term resilience ensuring fair rates, thoughtful infrastructure planning and the financial strength that allows local utilities and their communities to thrive.

In 2025, MRES completed 15 rate studies for 12 member communities, continuing a strong tradition of long-term planning support. Many of these communities regularly partner with MRES. The numbers next to each reflect how many studies MRES has conducted for the member community over time, demonstrating ongoing collaboration.

• Alexandria, Minnesota (10) • Brookings, South Dakota (9) • Beresford, South Dakota (5) • Burke, South Dakota (4) • Cavalier, North Dakota (4) • Denison, Iowa (5) • Hillsboro, North Dakota (2) • Luverne, Minnesota (22) • Marshall, Minnesota (6) • Moorhead, Minnesota (11) • Pickstown, South Dakota (5) • St. James, Minnesota (7)

Prioritizing Excellence

Where MRES and Members Lead the Way in Safety, Reliability and Performance MRES earned a platinumlevel APPA Safety Award of Excellence in 2025, with multiple member utilities achieving diamond and platinum honors, demonstrating a strong culture of safety, accountability and operational excellence across the membership.

Twenty-one MRES member utilities and one associate were recognized with a Certificate of Excellence in Reliability and are among the top 25% of public power utilities nationwide for electric reliability, based on benchmarking data from the APPA. This recognition, measured through industry metrics such as outage duration, highlights the effectiveness of ongoing system planning, infrastructure investment and operational discipline.

Further reinforcing this commitment to excellence, several MRES member utilities earned Reliable Public Power Provider (RP3) designations from APPA. These designations, awarded at Diamond and Platinum levels, recognize utilities that demonstrate high proficiency in reliability, safety, workforce development and system improvement.

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A Year of Progress

MRES and its member utilities made meaningful progress in 2025 advancing infrastructure, expanding energy resources and strengthening the communities they serve. Guided by a shared commitment to reliability, affordability and service, these efforts reflect the power of collaboration across the MRES membership.

Transmission development remained a key priority throughout the year. Otter Tail Power and MRES/WMMPA advanced the Big Stone South–Alexandria (BSSA) 345 kV transmission project. In Minnesota, the route permit process continued forward with public meetings and scoping and completion of the state conducted Environmental Impact Statement (EIS). In South Dakota, Otter Tail Power and MRES/WMMPA secured a facility permit for the South Dakota portion of BSSA, clearing an important regulatory milestone and moving the project closer to construction readiness. The BSSA project is designed to enhance electric reliability, increase resiliency to extreme weather events, reduce transmission congestion and increase access to low-cost energy in the region.

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Construction began on the Brookings Solar Project in South Dakota, which will add renewable energy capacity and provide valuable operational insights into solar integration. This project builds on the Marshall Solar Plus facility in Minnesota, which pairs 10 MW of solar generation with 5 MW of battery storage and entered service in late 2024. The addition of battery storage enhances operational flexibility and enables more effective deployment of energy during periods of peak demand.

Hydropower also remained a dependable part of the MRES energy mix. The Red Rock Hydroelectric Project in Pella, Iowa, continued delivering consistent performance using all available water, even with a detailed Federal Energy Regulatory Commission regulatory inspection in October.

Strategic preparation continued at the Watertown Power Plant site, where demolition and site clearing created space for potential future infrastructure development. This work supports long-term system flexibility and positions MRES to respond to changing energy needs in the years ahead.

MRES continued evaluating increasing requests for large electrical loads, including advanced manufacturing and data processing facilities.

Through proactive planning and coordination with its members, MRES is working to ensure these opportunities can be integrated into the system while maintaining reliability and cost stability.

MRES and its member utilities continued demonstrating public power’s commitment to service through participation in Light Up Navajo. In partnership with the Navajo Tribal Utility Authority and APPA, volunteer lineworkers from MRES and several member utilities helped bring electricity to families along the Arizona-New Mexico border who previously lacked access to reliable power.

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LEAD Course

Supervisor Essentials

Programs such as the LEAD Course and Supervisor Essentials helped strengthen leadership and workforce development across member utilities, equipping employees to work effectively as teams and deliver high-quality service to their communities.

In addition, MRES awarded 12 scholarships, of which seven were awarded to students pursuing powerline and technical training programs.

Events such as Tech Days in late September provided opportunities for MRES and member staff to share knowledge, exchange ideas and explore emerging topics including cybersecurity, distributed energy resources and evolving customer programs.

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MRES also supports members through strategic communications that highlight the benefits and impact of community-owned electric utilities. Monthly communication packages provide ready-to-use content to help strengthen community engagement as part of the Value of Public Power initiative.

Additionally, MRES offers Municipal Power Advantage® (MPA) reports at no cost. Since April 2024, 11 member MPA reports have been completed delivering customized, data-driven insights that demonstrate the reliability, affordability and local benefits of public power.

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Through Bright Energy Solutions® (BES), member utilities helped residents, businesses, schools and other organizations implement energy efficiency upgrades that reduce electricity demand and operating costs. Since the BES program started in 2008, MRES has paid nearly $32 million in rebates and processed more than 60,000 rebate applications. In 2025, demand-side management initiatives reduced peak system demand by nearly 4 MW. In looking to the future, MRES completed a strategic expansion of its headquarters facility in late 2025, delivering the project ahead of schedule and under budget. The expansion added office space, conference rooms and dedicated training areas, all designed to enhance staff collaboration, streamline operations and strengthen connections as we support the growing needs of our member communities.

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Building Financial Value Bond Ratings and Debt

MRES and WMMPA achieved debt service coverage (DSC) of 195% in 2025, exceeding the Board-approved policy of a five-year average of 170%. DSC for the five years ended Dec. 31, 2025, has averaged 186%.

DSC is an important factor in determining favorable bond ratings, which can lead to better interest rates and, ultimately, lower costs for future capital projects.

The WMMPA power supply revenue bonds have maintained a rating of AA- from Fitch since 2003 and were upgraded to Aa2 by Moody’s in 2022.

Strong Balance Sheet

MRES closed out 2025 with a net surplus of nearly $37 million – $17 million higher than budgeted.

At Dec. 31, 2025, MRES and WMMPA had unrestricted cash and investments totaling $268 million, approximately $77 million above the discretionary funds minimum target. The unrestricted cash and investments of MRES and WMMPA represent approximately 14 months of the 2025 operating expenses, excluding depreciation.

Strong cash reserves are another factor in achieving favorable bond ratings. Reserves can also help stabilize rates and fund a portion of future capital projects, reducing the need for debt issuances.

At Dec. 31, 2025, the MRES and WMMPA capitalization was approximately 52% debt and 48% equity, slightly better than the board-targeted 60% debt and 40% equity structure. WMMPA’s debt as a percentage of total capitalization is low compared to other joint action agencies.

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Rates

The average rate for long-term power sales to members increased to 6 cents per kWh in 2025, compared to 5.7 cents per kWh in 2024. The average 2025 wholesale power and transmission rate was 11% below the median rate of 12 comparable regional providers.

Transmission Cost Recovery

Every year, MRES files Attachments O and H on behalf of the organization and members. The attachments are a cost-recovery mechanism that provides payments from the regional transmission organizations for MRES- and member-owned transmission in those areas. In 2025, we completed filings for 17 members in the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP) markets. In 2025, these filings led to approximately $15 million in cost recovery for these members.

MRES received approximately $23 million in cost recovery on its transmission assets in MISO and SPP.

The 2025 Combine Audit Reports can be found on the MRES website at www.mrenergy.com/about/financials.

Each year, MRES recognizes employees whose commitment, collaboration and leadership exemplify the very best of MRES. In 2025, eight employees were honored with the Peer Ovation With Earned Recognition (POWER) Award — the highest MRES employee recognition.

Presented annually and based on peer nominations with final recognition by the MRES board of directors, the POWER Award reflects the deep respect employees have for one another’s dedication and service to member communities.

2025 Power Awards Back row: Vernell Roberts, Braydon Ripka, Andrew Johnson, Deven Houselog, Char Roth, Matt Schull Front row: Clay Welchlin, Pauline Roberts, Marisa Quick, Blaire Andrews

Deven Houselog, facility services coordinator, was recognized for his leadership of the headquarters building addition, which was completed in fall 2025. Through careful coordination and attention to detail, the project was completed two weeks ahead of schedule and 10% under budget.

Pauline Roberts, senior accountant; Char Roth, director of accounting; and Blaire Andrews, HRIS administrator, were honored for leading the successful integration of a new payroll processing system with ADP. Their work ensured a seamless data migration and provided employees with access to pay history, leave balances and time-off information.

Clay Welchlin, journey lineworker (Jackson, Minnesota); Andrew Johnson, member services coordinator; and Braydon Ripka, apprentice lineworker (Luverne, Minnesota), were recognized for their service during the Light Up Navajo Project. Each spent extended time away from home, working long days to help bring electricity to families in need. In addition to field work, the team helped share the project’s impact through community outreach and presentations.

Marisa Quick, human resources coordinator, received the POWER Award for stepping into the executive assistant role during a key organizational transition. She assumed additional responsibilities, coordinated board and executive activities, and ensured operational continuity while also supporting the hiring and training of a new executive assistant.

Together, these individuals represent the spirit of MRES — dedicated professionals who lead with integrity, support one another and serve MRES members with excellence.

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3724 West Avera Drive P.O. Box 88920 Sioux Falls, South Dakota 57109-8920 605-338-4042 www.mrenergy.com | www.brightenergysolutions.com

© 2026, Missouri River Energy Services. All rights reserved.

No portion of this publication may be copied or duplicated in any format without the expressed permission of MRES.

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