Nov 30, 2020 | Latest News
When was the last time you took a close look at your electric bill? If you’re like most, you probably don’t review it often and, when you do, it can be tempting to just scan and focus on the bottom line. We get it, time is short, and life is busy. But it’s important to gain a good understanding of what the charges on your electric bill mean.
A lot goes on behind the scenes within our cooperative family to calculate electric rates—from the wholesale level to the retail level— and this article breaks down how everything comes together to create the amount you pay each month.
The Journey of Electricity
Understanding all that goes into your electric bill starts with learning how electricity is made and how it’s delivered to your home. Before your local electric co-op can send electricity to your home, that electricity must be created by a generation unit. In our cooperative network, the electricity you receive at your home is a combination of energy created by wind, hydropower, natural gas, coal or other fuels. Electricity is generated at the same moment it’s needed and wholesale power providers like East River Electric Power Cooperative and Basin Electric Power Cooperative have a watchful eye on the electric system around the clock making sure your lights come on when you flip the switch. Depending on the weather, the generation mix can vary (if the wind is blowing, there’s more wind on the system; if the wind isn’t blowing, more traditional energy sources are used to meet electric usage).
Once the electricity has been generated, it travels over high-voltage transmission lines to substations, where the voltage is reduced to a lower level. The electricity then travels over distribution power lines and the voltage is reduced again to safely find its way into your home. In our cooperative network, East River Electric owns and maintains the substations and transmission power lines. When severe weather strikes, our local crews in South Dakota and Minnesota are at the ready to quickly make repairs and restore power to the grid.
Understanding Your Power Bill
Now, returning to your power bill, the first thing you might see is a facility or base fee. This is one of three types of costs on your bill. Rates are set based on cost of service studies done at the local co-op to cover its costs. The facility fee is a set amount you pay each month to cover your share of the onsite costs of your distribution cooperative; including metering, billing and local infrastructure. It’s a necessary service charge so all members pay their fair share of the fixed costs for operating the cooperative. All members pay the facility fee regardless of how much energy they consume so they all contribute equally to help keep the cooperative running. In other words, the facility charge that you see on your monthly bill funds the local distribution cooperative and is not directly related to the cost of East River Electric’s wholesale power. The facility charge can vary by cooperative and determined by the number of members who are supporting those costs. A cooperative with 2 meters per mile of line will likely have a higher facility fee than a cooperative with 4 meters per mile of line because the more rural co-op will have more infrastructure and fewer consumers in which to spread the cost.
The next two types of costs are usually combined as an energy fee on your bill, which is based on your electric usage each month. The energy you use at your home or farm is metered and charged on a kilowatt-hour (kWh) basis. The kWh rate is made up of wholesale power costs, including the generation and transmission needed to get the power from a generation unit to your local cooperative. A lot of things are considered when setting a wholesale power rate – construction costs, interest rates, regulatory requirements, depreciation of assets, materials, labor and more. Some of those costs are controllable, others are not.
One great benefit of being a member-owner of a not-for-profit electric cooperative is that you have a say in how our cooperative network is run. East River Electric is governed by a board of directors made up of representatives from our member systems. East River is also cost-based, so our rates are set by our members in a way that allows us to collect enough revenue to pay for providing power, with a small margin to meet lending requirements and plan for any unexpected costs. Those margins (money made over the cost of providing power) are given back to the members who own the cooperative. That’s something you won’t see from a for-profit company.
Generating and distributing power is an intricate business and involves a lot more than the generation of electricity, but rest assured that East River Electric will always meet the necessary demand to provide safe, reliable and affordable electricity to the region’s consumers.
Nov 25, 2020 | Latest News
FOR IMMEDIATE RELEASE: Nov. 24, 2020
MEDIA CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327
PIERRE, S.D. – The South Dakota Public Utilities Commission today approved a construction permit for the Wild Springs Solar Project to be built in Pennington County. The decision allows Wild Springs to move forward with plans to construct a solar energy facility capable of generating up to 128 megawatts of energy one-half mile south of New Underwood, South Dakota.
Wild Springs, PUC staff and the Burndorf Family Trust, the docket’s only intervenor, previously presented a settlement agreement that was accepted by the commission at their meeting on Nov. 12, 2020. The agreement resolved all issues except for the appropriate decommissioning financial assurance. The commission’s action this week was to rule on the proposed decommissioning condition submitted by Wild Springs and determine if a permit should be granted.
“It’s extremely interesting and very exciting to see this type of renewable energy project being developed in South Dakota,” said PUC Chairman Gary Hanson. “Ten to 20 years ago, solar energy wasn’t considered a viable option for our state because we didn’t have the right climate for it. It’s exciting to see that technology has grown and investors are willing to support a renewable energy that has very few challenges from the standpoint of aesthetics or noise or anything of that nature,” he stated.
The approved permit will include 38 conditions that must be adhered to during the construction and operation of the project. Land restoration, potential impacts to threatened and endangered species, post-construction breeding bird surveys and associated nest monitoring, and the financial assurance for future decommissioning are all among the details the conditions address.
“Decommissioning financial assurance is something we’ve been dealing with for the last three years on various projects. We’ve talked about a lot of different options and an escrow account is the one we’ve adopted up to this point; partly because until now, we’ve never had a bond presented to us in a manner that was irrevocable. In this case, the applicant has figured out a way to give us the assurance that no matter what happens to the owner, the bond will remain in place,” stated Vice Chairman Chris Nelson. “I greatly appreciate the time staff has put in to initially raise the question of whether this was appropriate and then to work through the details with the applicant to ensure that this will work long term,” he continued.
The proposed solar project will span up to 1,499 acres of privately-owned land and plans to include approximately 340,000 solar panels. Other components of the project include inverters, a tracking rack system, fencing, access roads, a substation, an operations and maintenance building, a parking lot, electric collection lines, up to three weather stations and temporary construction areas.
“This is South Dakota’s biggest solar project to date. We at the PUC have had a lot of experience with wind development in the last few years, but in certain regards, solar is different. I appreciate the efforts made by PUC staff and the applicant to help us ensure our landowners will be well protected,” said Commissioner Kristie Fiegen.
Wild Springs expects to complete construction of the $190 million facility by the end of 2022. Upon completion, the project will interconnect to the New Underwood Substation owned by Western Area Power Administration, located adjacent to the project area. The energy produced by the solar facility will be purchased by Basin Electric Power Cooperative.
Wild Springs filed its application with the PUC on May 15, 2020. The PUC held a public input hearing telephonically on July 1.
The Wild Springs Solar Project docket can be viewed on the PUC’s website at
www.puc.sd.gov, Commission Actions, Electric Dockets, 2020 Electric Dockets,
EL20-018 – In the Matter of the Application by Wild Springs Solar, LLC for a Permit of a Solar Energy Facility in Pennington County, South Dakota.
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Photo Caption: East River Electric Power Cooperative’s Chief Member and Public Relations Officer, Chris Studer, was part of the solar project announcement at a news conference in February.
Nov 24, 2020 | Latest News
Neighbors helping neighbors. It’s a common phrase heard in rural America. We step up when our neighbors need help. That’s how the cooperative movement started around here. Neighbors made a promise to each other and worked to see it through. Oil and agriculture cooperatives sprung up to provide needed services. Electric co-ops were created by neighbors helping neighbors get electricity to the farm or ranch to benefit all rural families. Back then, people all across our region made a promise to each other: We’re going to work together to bring power to the prairie. People gathered together to help build their electric cooperatives by signing up their neighbors to bring electricity to rural areas that had never had it before; a service that no one else would provide. It’s made a profound difference in agricultural production, business and life in rural America. And then, those cooperatives made promises to neighboring cooperatives to create East River Electric, to provide a stable and reliable power supply to their local cooperatives.
Electric cooperatives today are still made up of member-owners that are accountable to each other. We do what we say we’re going to do. That means sticking with our commitment to provide reliable, affordable electricity to our neighbors.
Dakota Energy Cooperative headquartered in Huron has filed a legal complaint against its wholesale power supplier East River Electric Power Cooperative based in Madison. Through the legal complaint, Dakota is seeking to buy out of its long-term wholesale power contract they recently signed to take risks on the spot energy market with a for-profit company called Guzman Energy. They made a promise long ago to work together with surrounding cooperatives to create East River Electric and provide for long-term wholesale power supply. By attempting to break that promise to their fellow electric cooperatives, Dakota could end up paying more in the long run and leaving neighboring co-ops with higher costs. That’s not the co-op way.
The other cooperatives in our region want to continue working together to take advantage of economies of scale and the collective strength that our network provides and honor the promise they made to their rural neighbors. By keeping our cooperative family whole and helping our neighbors, we can continue to provide safe, affordable and reliable electricity for the long term.
Nov 19, 2020 | Latest News
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.
Nov 11, 2020 | Latest News
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.
Nov 11, 2020 | Latest News
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.”
