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RAPID RIVER ENERGY 2012 Corporate Social Responsibility Report


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TABLE OF CONTENTS | RAPID RIVER ENERGY CSR

IN THIS REPORT About Company Overview Ethics and Code of Conduct Working with Elected Officials Financial Stability Community Employees Environment The 7 Cooperative Principles Goals


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ABOUT THIS REPORT | RAPID RIVER ENERGY CSR

ABOUT THIS REPORT We are pleased to share with you our 2012 Corporate Social Responsibility Report. This is the first year we have issued a report of this kind; however, social responsibility has been at the heart of our organization since it was formed 13 years ago. Our commitment to the communities in which we live and work is ingrained in everything we do—it is the essence of being a cooperative. Our complete report details Rapid River Energy’s environmental stewardship, community and employee activities in 2011. The report provides a performance review and sets goals for our future endeavors. As our organization continues to evolve, so will our social responsibility efforts. We realize we will make frequent adjustments in response to economic and regulatory changes. We are proud of our organization and its continuous improvement in the area of social responsibility. We hope this report will show you our efforts to be a responsible corporate citizen. Our social responsibility guiding principle: Rapid River Energy pursues its business as part of a responsible cooperative family, rooted in our vision, mission, values and cooperative principles, bringing together members, employees and partners to benefit our local communities and society.


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COMPANY OVERVIEW | RAPID RIVER ENERGY CSR

COMPANY OVERVIEW Who We Are Rapid River Energy is a not-for-profit electric cooperative owned by its 28 member cooperatives. We generate and transmit electricity for those members, located in the outer suburbs of the Twin Cities up to the Arrowhead region of Minnesota and down to the farmland region in the southwestern portion of the state. Rapid River Energy’s cooperative structure has proven to be central to our continued success in delivering on our mission. Collaboration with our members, stakeholders, community leaders and employees has made us a strong and respected organization.

Rapid River Energy supplies nearly 2/3 of Minnesota with electricity.

Like other cooperatives, Rapid River Energy exists to serve its membership and is dedicated to helping the communities in which it operates. We are memberowned and governed by a democratically elected board of directors who are electric cooperative members themselves. Board members establish rates and develop policies in the best interest of Rapid River Energy and its members. Collectively, our member cooperatives serve nearly 639,000 member consumers— or about 1.7 million people. We are the second largest electric power supplier in Minnesota. Rapid River Energy owns and operates nine power plants which generate more than 2,500 megawatts (MW) of electricity, plus we purchase additional power from several wind farms and other generating facilities. Our generation capability consists of a diverse mix of base load and peaking power plants—including coal, biomass, natural gas and oil plants. Rapid River Energy owns and operates nearly 4,500 miles of transmission line and owns or partly owns more than

100 transmission substations. Rapid River Energy’s more than 865 employees are dedicated to serving our member cooperatives with integrity and accountability in an environmentally sensitive manner. It’s the nature of being a cooperative. Our Vision Leading, collaborating, energizing to benefit our members and our world. Our Mission Provide members with reliable energy at affordable rates in harmony with a sustainable environment. Our Triple Bottom Line Commitment to Our Members Rapid River Energy maintains a commitment to economic, social and environmental responsibility to our members. Every decision we make as an organization is care fully considered and held up to these three standards as we work to achieve a balance between the three of them. We have adopted a decision-making process that gives equal consideration to our three highest priorities: affordable rates, reliable energy and environmental stewardship. Our organization will not deploy strategies affecting rates and reliability without also assessing the environmental implications. But, by the same token, we won’t do anything for the environment without fully considering the impact on rates and reliability. Ultimately, it is about conducting business in a way


COMPANY OVERVIEW CONT. | RAPID RIVER ENERGY CSR

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Our Culture and Values The culture of any organization is its lifeblood, and Rapid River Energy has created a culture driven by the following set of values:

Ethics We promote trust, honor, and social and environmental responsibility.

Focus on customers Our business decisions are made with our customers’ needs in mind.

Commitment to employees We create a safe work environment that promotes teamwork and a sense of employee ownership. Each employee is valued and recognized for his or her accomplishments.

Open and honest communication Employees are encouraged to share ideas and deliver honest, direct, respectful and constructive feedback.

Accountability We do what we say we’ll do.

Safety We ensure a culture of safety for our employees, families and communities.

Our assets and revenues have doubled and we have increased our equity from $106 million in 1998 to $309 million at the beginning of 2012.


ETHICS | RAPID RIVER ENERGY CSR

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A Cooperative Code 1. Alcohol and drug-free environment 2. Business conduct 3. Computers and electronic communications 4. Equal employment opportunity 5. Inappropriate conduct, discrimination and harassment 6. Problem resolution 7. Reporting wrongdoing that benefits both sustainability and the bottom line.

ETHICS AND CODE OF CONDUCT Rapid River Energy has key policies in place to help ensure we are in compliance with federal, state and local laws as well as to promote a work environment where all employees have the maximum opportunity to be successful. The following are considered key policies of Rapid River Energy; they were created to educate employees on the importance of conducting our business legally and ethically, and to fit our culture of a respectful work environment. Rapid River Energy employees take individual responsibility for ethical behavior—not only because it is the right thing to do, but also because it is fundamental to our goals of providing our members with reliable, affordably priced power in harmony with a sustainable environment. We expect every employee to practice ethical behavior in all dealings and relationships with members, suppliers, communities and co-workers. In addition, courtesy and professionalism are expected from

To Our Members Rapid River Energy maintains a commitment to economic, social and environmental responsibility to our members. Every decision we make as an organization is care fully considered and held up to these three standards as we work to achieve a balance between the 3 of them. We have adopted a decision-making process that gives equal consideration to our three highest priorities: affordable rates, reliable energy and environmental stewardship. Our organization will not deploy strategies affecting rates and reliability without also assessing the environmental implications. But, by the same token, we won’t do anything for the environment without fully considering the impact on rates and reliability. Ultimately, it is about conducting business in a way that benefits both sustainability and the bottom line.


EMPLOYEES | RAPID RIVER ENERGY CSR

EMPLOYEES Our Valued Employees It may sound cliché, but Rapid River Energy truly values its employees. Our 865 employees really are the organization’s greatest asset. We work hard to provide them with the safest and healthiest working environments, give them opportunities to volunteer and serve the community, and compensate them fairly for their hard work and dedication. Again, it is not only good business, it is the right thing to do.

6.5% 2.8%

Rapid River’s employee turnover is roughly two and a half times lower than the national average for utilities employees.

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COMMUNITY | RAPID RIVER ENERGY CSR

COMMUNITY Concern for Community A cooperative’s very existence is to serve the community at large. And because electric cooperatives are not-forprofit businesses, all revenue is invested in providing reliable electricity and a cooperative’s success is measured by its service, not profit. However, Rapid River Energy’s role in the community doesn’t end at the electrical outlet. One of the cooperative principles is a concern for community. This principle states that while focusing on member needs, a cooperative must work for the sustainable development of the community it serves. As a wholesale electricity provider to much of out state Minnesota, Rapid River Energy’s responsibilities span throughout the state and also into North Dakota where we own and operate generation and transmission facilities. For more info. visit www.rapidriverenergy.com/csr

Contributed $70,000 in scholarships in 1 year


ENVIRONMENT | RAPID RIVER ENERGY CSR

8% Other 6% Batteries Flourescent Lights Electronics Construction Deabris Beverage Containers Paper

87% Scrap Metal

ENVIRONMENT Environmental stewardship Rapid River Energy understands our operations impact our environment and it is our responsibility to do all we can to minimize that impact. Rapid River Energy has always taken great pride in conducting its business with a high concern for environmental matters. We are committed to conserving resources through environmental stewardship, pollution prevention, waste minimization, recycling and reuse. This dedication is demonstrated by the inclusion of environmental sustainability in our organization’s mission. To guide employees in their decision-making processes and to ensure environmental considerations are part of the process, Rapid River Energy established an environmental policy in 1999, which is reviewed annually and continues to guide our conduct.

For further info. contact Rapid River Energy for a free brochure on their environmental practices

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7 COOPERATIVE PRINCIPLES | RAPID RIVER ENERGY CSR

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THE SEVEN COOPERATIVE PRINCIPLES

1. Voluntary and open membership

5. Education, training and information

Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership.

Cooperatives provide education and training for their members, elected representatives, managers and employees, so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.

3. Member economic participation

6. Cooperation among cooperatives

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part that capital is usually the common property of the cooperative. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

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2. Democratic member control

Company

Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

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Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

4. Autonomy and independence

Ow n

The cooperative principles are guidelines by which cooperatives put their values into practice.

Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

7. Concern for community Cooperatives work for the sustainable development of their communities through policies approved by their members.

Supply Members

Electricity


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FUTURE PLANS | RAPID RIVER ENERGY CSR

PROCUREMENT •  Implement sustainable supply management strategy •  Write sustainable supply management policy •  Reduce material use •  Look for opportunities to purchase recycled materials •  Procure materials and supplies that are produced in an •  environmentally responsible manner. •  Use green strategies to dispose of surplus and retired equipment •  Encourage high-level environmental practices within supply base and with internal customers. •  Research and identify alternate products that are environmentally friendly and may replace chemicals or products currently in use. Rapid River Energy was created and is owned by Minnesotans. The seven cooperative principles guide our business and serve as a reminder of our responsibility: to provide reliable electric service at reasonable rates, and work for the sustainable development of the community.

GOALS Moving Forward Rapid River Energy has several social responsibility goals it is working to achieve during the next few years. We look forward to sharing our progress with you in future reports.

OUR 2013 SOCIAL RESPONSIBILITY GOALS Employees •  Implement Diversity Plan to enhance recruiting, training, communications, mentoring and other aspects of the employee experience. •  Draft human rights statement.

Governance •  Set up formal process for engaging key environmental stakeholders and assess how Rapid River Energy can engage with NGOs. •  Improve and enhance our business improvement process. •  Conduct training on social responsibility for our board of directors.


CONTACT | RAPID RIVER ENERGY CSR

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“Social Responsibility has been at the heart of Rapid River Energy ever since it was formed 13 years ago.”

www.rapidriverenergy.com 12345 Elm Creek Boulevard Maple Grove, MN 55369-4718 Phone: 763-445-5000


Csr report 2012