Annual Meeting

Annual Meeting

Capital Electric Cooperative (CEC) held its 72nd annual meeting of the membership on June 12 at the Ramkota Hotel and Conference Center in Bismarck. More than 600 member-owners and their families attended the event. While they waited for the meeting to start, attendees enjoyed a free meal and music from Joe Friday’s Dixieland Jazz Band. They also got an up-close look at CEC’s new digger truck and a 2017 Tesla Model S.

Capital Credits. This year, the board of directors approved the retirement of capital credits from 1999, 2000 and 2001, totaling more than $1,950,000. Employees handed out checks to those in attendance and mailed unclaimed checks. Over the last ten years, the co-op has paid more than $10.4 million in capital credits.

Board members. The membership re-elected Dwight Wrangham (District 1), Deon Vilhauer (District 2) and Rex Hollenbeck (District 3) to serve on the co-op’s board of directors. Each director will serve a three-year term. CEC congratulates those elected and thanks the following District 3 candidates for vying for a board position and being active cooperative members: Brent Erickson, Dean Grunseth, Su-Lin Tschider and Kathy Tweeten.

Bylaw changes. The membership voted in favor of several amendments to the co-op’s bylaws. The most significant changes are related to voting options, capital credit administration and mediation and arbitration options for legal matters.

Democratic member control is one, and possibly the most valued, of the seven cooperative principles. Essentially, it means each member has a right to vote for the cooperative’s board of directors and decide on matters that come before the membership. In the past, members needed to be present at the annual meeting to vote. While CEC will continue the tradition of voting at the annual meeting, an amendment to the bylaws will allow the board of directors to implement alternative methods for members to cast a ballot, such as mail-in or online voting.

An amendment to the bylaws regarding capital credits provides the board with additional early, discounted capital credit retirement options. For example, if a member leaves the co-op and has a capital credit balance under a threshold predetermined by the board, the board has the option to discount those capital credits and pay the resulting amount immediately, saving administrative costs now and into the future. This will result in an overall cost savings and an increase in equity without being significant enough to alter the co-op’s normal capital credit retirement cycle.

Another amendment will help minimize risk of class action law suits and reduce potential legal costs associated with disputes that may otherwise end up in court. The amendment provides both CEC and members who have legal or policy disputes with the co-op the right to request mediation or arbitration as a method of settling a dispute.

These bylaw changes will be effective on Jan. 1, 2019.

Business meeting summary. Board President Wrangham and General Manager Paul Fitterer provided the president’s and manager’s report. They reported on past and current events and activities at the co-op, updated the membership on power-supply issues and provided an update on infrastructure improvements.

Barb Handy-Marchello, board president of the Charitable Trust, gave a report on the cooperative’s Operation Round-Up program and urged members to opt into the program if they do not already participate.

Jared Mack, a certified public accountant with the auditing firm of Eide Bailly LLP, presented the 2017 financial report. The co-op received a clean audit opinion.

Transmission side updates. Central Power Electric Cooperative, CEC’s power provider, continues its strong commitment to the reliability of CEC’s system. As part of this commitment, Central Power recently completed a new substation in north Bismarck and purchased a redundant high voltage transformer northwest of Bismarck. Also, in 2017, Central Power acquired land for future 115 KV substations in both east and northeast Bismarck. These improvements will enhance the reliability of CEC’s system and provide additional capacity for the growth the co-op is experiencing.

About 90 percent of CEC’s wholesale power is generated or purchased by Basin Electric Power Cooperative with the remaining 10 percent coming from the Western Area Power Administration (WAPA). Basin Electric doesn’t anticipate the need for any major rate increases in the near future. In addition, it’s projected that there was plenty of snowpack in 2018 to generate enough hydropower to meet WAPA’s contractual obligations without additional drought related fees.

Regulatory updates. There appears to be less immediate pressure from the Environmental Protection Agency’s Clean Power Plan and other federal administrative regulations that affect power generation. The Clean Power Plan is currently in a repeal and replace status. In its present form, the plan would have an immediate and significant effect on the cost of power in the U.S. with the largest percentage increase affecting Midwest states. Proposed regulations would give credit to the renewable efforts already being undertaken by Basin Electric.

Distribution side updates. CEC continues to grow. In 2017, the co-op added 487 new accounts, an increase of 2.3 percent from 2016, and saw a 3 percent increase in kilowatt-hour sales. In the same year, the co-op added 20 miles of underground distribution line and retired of 5.8 miles of overhead distribution line, for a net plant addition of more than 14.2 miles of line.

The interest in electric vehicles (EVs) is on the rise, and CEC is preparing for the changes these cars will bring. "With a battery life reaching 200 miles per charge, the need for high speed charging infrastructure is growing," said Fitterer. "CEC is investigating a new off-peak charging rate to encourage members to charge EVs and other batteries during off-peak times, such as during overnight hours."