Basin Electric, members unite to focus on the future at 2018 annual meeting
Basin Electric’s 2018 annual meeting of its membership brought in more than 1,000 member co-op employees, directors, public officials, and utility representatives, and featured several updates on complex issues and developments.
As a cooperative, Basin Electric’s focus is providing low cost energy for its member-owners. The presentations shared how Basin Electric is evolving to meet members’ energy needs in the ever changing energy industry.
Basin Electric board president Wayne Peltier, representing District 9 of Minnesota Valley Cooperative Light and Power, Montevideo, Minnesota, described the course of Basin Electric over the past 10 years. “We have gone from needing to build $1 billion worth of infrastructure to serve our growing membership, to entering into more of a maintenance mode today. Our growth continues, and there are bright points on the horizon for us to work toward,” he said.
Basin Electric General Manager and CEO Paul Sukut said the shift from construction mode to operations mode coincides with a shift in the way Basin Electric does business. “We are greatly reducing costs at our power plants to be able to bid our power competitively into the market, and we are finding ways across our subsidiaries to operate more efficiently. The reduction in force we went through at the end of this summer was difficult on all of us, but we will come through this stronger and leaner,” Sukut said. “The changes we are making today will allow us to serve electricity to our member-owners at a competitive rate, even as our membership continues to grow.”
Sukut said change is constant in business, and changes in operation of the Great Plains Synfuels Plant, operated by subsidiary Dakota Gasification Company, are being made to help the plant run more efficiently. “Over time, the revenue we make at the Synfuels Plant is coming largely from our fertilizer products, and not our synthetic natural gas. Low commodity prices mean we needed to find a new way forward to ensure the plant remains a net benefit to our members,” Sukut said. “We ran scenarios to find the sweet spot in operation, and we believe we’ve found that. We will be running at a reduced capacity factor, which will allow us to maintain our revenue stream but operate at a lower cost on the coal gasification side. Today, the plant is in a much better place financially than before we made this change.”
- Senior staff provided reports and served on panels regarding optimizing operations; markets and the membership; financials; and government relations. They addressed how Basin Electric continues its history of pivotal decisions and triumph over daunting challenges; as well as the continued efforts to build and maintain infrastructure for a continually growing membership; financial successes in a challenging year; and regulatory/legislative updates. The panel discussions included Q&A sessions with the members.
- The keynote speaker was Mark P. Mills, a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science. He co-directs an Institute on Manufacturing Science and Innovation. Mills’ message included the argument that the world is not in the midst of an energy revolution. “I deal in facts, and the word ‘revolution’ represents a magnitude of change. We are not seeing that,” Mills said. “There is a limit to how much energy can be extracted from any energy source we consume, and the upside in oil and natural gas remains much larger than in renewables. Technology in wind and solar continues to get better, but we will reach a limit there much more quickly than forecasters realize.”
- The membership also heard from U.S. Sen. John Hoeven (R-N.D.), Sen. John Barrasso (R-Wyo.), Sen. John Thune (R-S.D.), North Dakota Lieutenant Gov. Brent Sanford.
- Capital Electric Cooperative displayed its new plug-in electric vehicle, named “Elektra.” The co-op recently purchased the Chevy Bolt to better understand the technology for its members.
More information, including reports, video and social media feeds can be found at basinelectric.com or through #Basin2018.