In an increasingly uncertain world, people need something they can count on. For 70 years, East River Electric Power Cooperative has been serving its member cooperatives with reliable, affordable and sustainable electricity. Our member systems distribute that energy to their member-owners to power their homes, farms and their lives. We’ve stood alongside our member cooperatives for seven decades to make the lives of their members better and more convenient.
Recently, Dakota Energy’s board and management took a step to tear apart their relationship with the region’s other electric cooperatives and take a gamble by purchasing electricity on the spot market from a for-profit company named Guzman Energy. Guzman was created by a private equity firm made up of out-of-state investors. Dakota Energy’s management has pointed to the length of the wholesale power contract they just re-signed in 2015 as reason to leave the cooperative family. The best way to explain the wholesale power contract is to look to history as a guide and also look at how the wholesale power contract helps secure our future.
The region’s electric cooperatives created East River Electric 70 years ago because they had been buying wholesale power from for-profit companies because they didn’t have their own generation assets. The founding members of the cooperative system knew that they didn’t want to continue paying far-off investors and worked to create a complete cooperative system to provide their own wholesale power. They knew this shift would give them more control over their future. Each cooperative would have representation on East River’s board of directors no matter their size, following the cooperative principle of one member, one vote. Because of the long-term nature of the utility business, they knew long-term contracts were necessary to provide stability and certainty. They also knew that they could minimize individual costs to each cooperative if they all worked together to invest the money necessary to build expensive transmission, substation and generation assets.
In 2020, East River Electric members still see long-term contracts as a necessary piece of providing power for the long term. A wholesale power contract is a promise among electric cooperatives to work together, take advantage of economies of scale, and procure and provide power at the lowest possible cost. It allows East River and its power supplier Basin Electric to borrow capital at lower interest rates. Lenders have confidence in wholesale power contracts and provide attractive interest rates because of the certainty the contracts provide. Short term, risky contracts would bring higher interest rates, and therefore higher electric rates for consumers.
The bottom line is that long-term wholesale power contracts are a promise that cooperatives make to each other to provide the certainty that we all need right now.
Tom Boyko, General Manager of East River Electric Power Cooperative
We’re thinking about your future at East River Electric.
Not only that, we’re thinking of your children, your grandchildren and beyond. That’s why you created this cooperative. To provide energy today in a reliable and responsible way, and to build for the future, so access to power isn’t something the next generations even have to consider.
You have probably heard Dakota Energy is considering leaving East River Electric Power Cooperative and signing a contract with a Colorado energy broker named Guzman. This group was started in recent years by investors in Florida and promises cheap, green energy to replace local cooperatives.
We think a long-standing, not-for-profit local co-op can better serve its members and expose them to less risk. We think decisions made by our board—made up of members from each area, including Dakota Energy—keep the best interests of our members first rather than the interests of investors looking for profits.
You may not know East River Electric well since we spend our energy promoting our member cooperatives rather than ourselves.
We are the rural energy supplier for nearly every county in Eastern South Dakota and several counties in Western Minnesota. We’re based in Madison, S.D., and made up of 24 local cooperatives and one municipal electric system whose names you do know, including Northern Electric, Dakota Energy, FEM Electric, Lake Region Electric, Central Electric and more. Those members made a promise to each other to create East River to secure energy and distribute it for the benefit of all of our members. We build transmission infrastructure to new areas based on expectations of future growth. We maintain and repair power lines, substations and other infrastructure to reliably serve the region’s homes, farms and businesses.
We were started 70 years ago by local residents and members of area cooperatives because they recognized that by working together, we could lower risk, coordinate infrastructure, secure better pricing and take advantage of many other ways to improve service for members.
All those reasons are still important today.
Our board at East River Electric is made up of representatives from each of the 25 areas we serve. They set our direction, and we execute. We are beholden to not only that board, but also each of the members they represent in homes across Eastern South Dakota and into Minnesota.
We are not beholden to investors. No one’s profits come before our members. We are here for you.
We’ve done a good job of serving our members for the last 70 years. In surveys, 98% of our members say our cooperative family meets or exceeds expectations. In 2021, we’re looking at a third consecutive year with flat rates, and we use revenues to maintain or improve reliable access to power for our members. We operate a cost-based business, which means that any excess funds are returned to the membership. In the past 10 years East River has returned $2.3 million to Dakota Energy. That’s something you wouldn’t see from a for-profit company.
We care about South Dakota. Through our Rural Electric Economic Investment (REED) fund, we have invested more than $100 million in the region to promote growth and contribute to job, business and wealth creation.
We understand that green energy solutions are growing in the U.S. East River Electric members currently get 37% of their energy from renewable sources, with plans for steady and fiscally responsible growth. We also use traditional energy sources that have proven to deliver reliable power for the last 70 years. We change and adapt in ways that limit risk for our members while taking advantage of new developments in energy production.
Focusing on your future also means we have your interests and future generations’ interests in mind when negotiating pricing. We know this area; we live here. We are experts in market analysis and tracking long-term price trends. We don’t have knee-jerk reactions to sudden changes in spot market prices or supply, and as a result, we have had low and stable rates for our members for decades.
For the last 70 years we’ve put our heads down and done the work that lets you know that when you flip a switch, the power is there. When something is that reliable, it’s easy to stop thinking about who’s making it happen. If you’re not thinking about us, it means we’re doing our job well.
We look forward to continuing to do that job well for the next 70 years and beyond. Regardless of whether you’re thinking about us, we’ll definitely be thinking about you.
If you would like to learn more about this matter, please read our recent press release. You can also reach out to us direct at 605-256-4536.
East River Electric Power Cooperative was created 70 years ago by the region’s rural electric cooperatives to provide wholesale power supply. That mission continues today as East River’s 25 member electric distribution systems have ownership in East River Electric which gives them access to a reliable network of transmission lines and substations. On Nov. 6, 2020, Dakota Energy Cooperative filed a legal complaint against East River Electric in Lake County requesting an exit fee to withdraw from their membership in the cooperative.
Dakota Energy is a member-owner of East River, along with 23 other distribution electric cooperatives and one municipal electric system in eastern South Dakota and western Minnesota. Dakota Energy members are therefore owners of East River through their membership in Dakota Energy. In fact, Dakota Energy, along with cooperatives throughout eastern South Dakota and western Minnesota created East River.
“Unfortunately, Dakota Energy has stated that they intend to purchase power from Guzman Energy,” said East River General Manager Tom Boyko. “Guzman, a for-profit company operating out of Denver, has targeted rural electric cooperatives in an attempt to lure them away from their local cooperative power suppliers.
Dakota Energy, along with East River’s other member systems, signed its current East River wholesale power contract five years ago. The signing of those contracts was the independent decision of each local board and helps the cooperative network to finance ongoing operations and future infrastructure needs. The wholesale power contract enables the cooperatives to work together and take advantage of economies of scale to provide for affordable and reliable power long into the future.
The utility business is a long-term enterprise and cannot rely on the volatile market for its power supply. Consumers invest in their cooperatives to serve each other long into the future. East River’s contract with its two power providers, Basin Electric and the Western Area Power Administration (DOE) run to 2075 and 2050 respectively. East River’s contract with Basin was signed after Dakota Energy signed their contract with East River in order for East River to have a long-term firm power supply for member-owners like Dakota Energy.
East River is a not-for-profit, cost-based utility, which means that the margins it makes over and above the costs to provide power go back into the communities it serves. The wholesale power co-op is owned by its member systems and East River’s board of directors is comprised of representatives from its member co-ops. Those members set East River’s strategic direction.
The vast majority of rural South Dakotans are served by electric cooperatives. Those consumers, like Dakota Energy’s consumers, own their cooperative and in turn own East River and in fact have an equity ownership in East River.
“East River appreciates our members and the end consumers and hope we can continue our decades long relationship. Dakota Energy Cooperative is still a member-owner of East River and we will continue to provide them with the same level of service and respect that is provided to all of the co-op’s members,” said Boyko. “East River exists to enhance the value of all of our member systems. We hope to resolve this legal action in a manner that will keep our cooperative family whole so that we can continue providing safe, affordable and reliable power to the region’s consumers.”
Scott Seitz is awarded a clock with a plaque for appreciation of his years of service.
East River Electric Power Cooperative recently presented service awards to 22 employees with years of service ranging from five to 35 years.
“I’d like to congratulate this year’s service award recipients and thank them for their dedication to East River Electric. We are especially proud of everyone for continuing to work hard and provide our essential service during stressful times such as we are facing this year,” said East River General Manager Tom Boyko.
Digital Communications Systems Foreman, Scott Seitz, one of this year’s service award recipients, began working at East River 35 years ago.
“I was hired as an apprentice microwave technician in the telecommunications department in 1985. Technology is continually changing and trying to keep up with the technology has been a continuous education process, making the last 35 years go by fast. Being surrounded by a great workforce within our department has made this job enjoyable and much easier. I have met a lot of great individuals and developed lasting friendships with individuals both within and outside the organization due to this job,” said Seitz.
Liz Avery, Human Resources & Administration Manager, celebrated her 30-year work anniversary. “From my first day, I found the work interesting and challenging,” shared Avery. “East River provides an engaging culture that pushes us to do our best. From technology to the people, to the industry itself, so much has changed over these past 30 years. I have had made many lifelong memories and friends along the way!”
A listing of the awards is as follows:
• Five years: Erica Fitzhugh, Joe Henderson, John Knofczynski
• Ten years: Adam DesLauriers, Michael Dunbar, Todd Hansen, Melissa Johnson, Paul Letsche, Clay Tanner
• Fifteen years: Chris Anderson, Sam Anderson, Wade Bialas, Kurt Donelan, Tony Englert, Rory Johannsen, Kyle Weber
• Twenty years: Curt Wiedman, Bryan Wieman
• Thirty years: Liz Avery, Tim Dockendorf, Brad Ebdrup
• Thirty-Five years: Scott Seitz
East River Electric Power Cooperative donated a total of $20,000 to four local organizations through CoBank’s Sharing Success program, which is a matching grant program. The four organizations that received donations from East River include Bethel Lutheran Home Foundation, Dream Factory, Inc., Valiant Living and the Veteran’s Honor Park.
“We are proud to be able to support these important local organizations by utilizing funds from CoBank’s Sharing Success program,” said East River Employees Committee Chair Sam Anderson. “The seventh cooperative principle is concern for community and these donations are one way that East River continues to live out that important principle.”
East River donated $3,250 to the Bethel Lutheran Home Foundation and CoBank matched that donation. The Bethel Lutheran Nursing Home provides long term and assisted care to residents in the Madison community and surrounding areas. The Bethel Lutheran Home Foundation Board of Directors will determine where the combined donation will be used to best aid residents through equipment and technology improvements or facility upgrades during their upcoming quarterly meeting.
“This donation speaks volumes to our residents, families and staff of the support and compassion East River Electric employees have toward our ministry of care provided to residents and families,” said Bethel’s Development Director Rosie Jamison. “We are humbled by your generosity and interest in helping us meet our needs for quality care through increased resources.”
East River also donated $3,250 to the Dream Factory, Inc., with a matched donation from CoBank. The Dream Factory is an all-volunteer driven children’s wish-granting organization that does not limit its mission to children who have life-threatening illness.
“We are working to help Bennet and Anya, who both live with medical conditions that make everyday life a struggle, to reach their dreams of going to Disney World,” said Dream Factory Volunteer Nancy Stoffel. “This donation is a miracle and couldn’t have come at a better time. Due to the COVID-19 crisis, our fundraisers have been cut by over 50 percent. Thank you for this amazing donation.”
Valiant Living received a $2,500 donation from East River, with a CoBank match. Valiant Living is headquartered in Madison and is a private, non-profit community-based organization which focuses on serving people with disabilities. For over 40 years, they have encouraged and supported individuals by helping them reach their goals and bravely live the life they choose.
“Your donation will help the replacement of a handicap accessible wheelchair van which is much needed at Valiant Living,” said Valiant Living Executive Director Donna Uthe. “This will help make transportation more comfortable and reliable for the people supported. Thank you for this very generous donation. Your donation and support are very much appreciated.”
The Veteran’s Honor Park received a $1,000 donation from East River, with a match from CoBank. East River has pledged to continue this donation for five years, for a total of $10,000. In 2018, Jerry and Sue Larsen donated a plot of land to the VFW Post 2638 and American Legion Post 25 to construct an Honor Park in Madison to honor all veterans. A committee of volunteers from both organizations is raising funds to construct two memorial walls at the park.
“Thank you for the generous donation,” said 1st Vice Commander of the American Legion Post 25, Dan Fritz. “Our committee made several plans for fundraisers that did not pan out due to the 2019 flood and 2020 pandemic. This donation will greatly help our fundraising efforts.”
For many years, East River has utilized funds through the CoBank Sharing Success program to support local organizations. The Sharing Success program doubles the contributions of its customers to the charitable organizations and causes that they care most about. Since Sharing Success was established in 2012, CoBank and its customers have together contributed more than $44 million to various organizations.
“CoBank has committed $5 million in 2020 to local communities through our Sharing Success program,” said Jake Good, vice president at CoBank. “We are proud to work with East River Electric Power Cooperative to provide help and support to Madison and its surrounding communities.”
PHOTO CUTLINE – Valiant Living accepted the check in front of their new handicap accessible van. Left to right: Kathy Hamberger (Person Supported), Malissa Cleveland (Residential Director) and Donna Uthe (Executive Director).