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.”