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President’s report to the membership

Generation for Generations; it’s a hopeful message. We are making the investments. We are ready for the next generation.

Basin Electric Power Cooperative - October 31, 2011
Cliff Gjellstad, President, Basin Electric board of directors

Many people only want to look forward, but I think there is value in taking a look back. Reflection helps us discover who we are, why we are here, what we support and what we are willing to put some sweat equity toward. Our history shapes what we value and offers insights on how to move forward.

That’s why we are taking time to celebrate the 50th year of Basin Electric Power Cooperative at our upcoming annual meeting. The vision of the Basin Electric founders was to develop a power supply over and above what they were able to get from the hydroelectric facilities along the Missouri River. It was a bold vision. They took Leland Olds’ “giant power” concept, embraced it and made it their own. They worked together on a regional basis and pooled each of their cooperatives’ power supply requirements in an effort to build the biggest power plant possible near the lignite coal fields and Missouri River in North Dakota.

On May 5, 1961, Basin Electric was incorporated by 69 individuals, 68 men and one woman. There were doubters who didn’t think the plant would get built or work, but it did, and Basin Electric eventually became more than one plant; it became a power supply system for generations to come.

Fifty years later, we have brought online the newest addition to the Basin Electric generating fleet, the Dry Fork Station. Bringing this very clean coal plant online at this time is a fitting tribute to the cooperative’s founders and will help meet the growing power needs of our 135 member systems in the years ahead.

Over the past 50 years we’ve developed generating facilities with a total generating capacity of more than 4,000 megawatts. Our generating base still has a foundation of coal, but we’ve expanded our resources to include wind, natural gas, and recovered energy generation over the past 10 years.

Coal will be part of our energy future for many years to come. How we use coal will continue to evolve and get progressively cleaner, but it will remain an important resource in meeting the nation’s energy needs because it is abundant, affordable and domestic. Our commitment to environmental protection will also continue to be an integral part of our cooperative culture.

An interesting mix: oil, water and electricity

I’ve been Basin Electric’s board president for two years this coming December. I’m a retired farmer from the Norwich, ND, area, which is about 20 miles east of Minot, ND. This general area has been in the news for both flooding and energy development this year. I thought we would be coming to the end of a building cycle in 2012, but with what is predicted to be long-term oil development in western North Dakota, we are now planning a high-voltage transmission line and potentially some distributed generation to serve the oil fields and the people that are following the jobs into the region. You’ll hear more about that at the annual meeting.

Due to the wet conditions, only 10- to 25-percent of the crops were planted between my county and neighboring counties. My great grandfather’s homestead built in 1907 had three feet of water on the main floor. The Mouse (Souris) River flooding of Minot affected more than 4,000 homes and I think less than one-third will be rebuilt, putting housing in great demand.

The Missouri River Basin, for which Basin Electric was named, had its flooding problems, too. Many of you, all along the river’s course, were affected. This abundance of water has reduced the operations of our power plants because of the increased hydroelectricity being produced. I don’t think we will know if this pattern is going to change until next summer because the Corps of Engineers needs to get the elevation of the river’s reservoirs down before winter to prepare for any additional precipitation to avert flooding next spring. Basin Electric continues to work with the Western Area Power Administration to make the best use of the region’s generating resources.

Market access for both the buying and selling of electricity has moved to the forefront of issues for Basin Electric. Marketing of electricity has changed greatly in the last several years.

My understanding of the issue is that if it were not for the excess hydroelectricity, we would have very little surplus power to sell. However, we may want market access to buy electricity, reducing our need to build more resources in the near-term. Throw in some issues of being able to control what and where you build and how it’s paid for and it becomes a very complex subject. I urge all of those attending the annual meeting to pay special attention to the discussions on market access and regional transmission organizations.

Recipe for success

As you know, Ron Harper has announced that he will retire at the end of the year. I was seated on the Basin Electric board in June 2000 about a month after Ron began as CEO, so he is the only general manager I have worked with as a Basin Electric board member. At the Dry Fork Station dedication in August, I said Ron Harper was a builder like Basin Electric’s first general manager, James Grahl. In addition to being a builder of facilities, Ron is a consensus builder. He asks for and listens to various approaches to challenges and works for consensus with his top-line managers and the board.

Ron always puts the welfare of people first, whether they are the consumer at the end of the line or an employee at a construction site. He demands safe work practices. He makes it a priority to communicate with members and employees about the business and speaks and deals with people in a forthright manner.

He believes in the cooperative model. He is concerned about both the environment and energy security and continues to fight for the clean use of coal. He also raised the visibility of Basin Electric worldwide as well as in our communities through innovative approaches and community support. And, he took on the railroads over their unreasonable freight rates.

If you could put all of those ingredients together and produce a new general manager, I think we’d have a great recipe. Thank you, Ron, for your service.

The board plans to name a new CEO and general manager by the end of the year.

Ready for the next generation

I was at the dedication of the William J. Neal power plant in 1952, hanging on to my dad’s pant leg. I was five years old. Central Power built the Neal Station to serve its members. When it was built, it was the largest lignite-fueled power plant in the northern United States with a capacity of only about 40 megawatts, a fact I learned from a text book at school. Basin Electric eventually bought it, but for economic reasons Basin Electric shut it down and dismantled it in 1999.

Those experiences shaped my values, but taught me that we need to keep moving forward. While power production methods may change, the vision for Basin Electric has essentially stayed the same: Basin Electric will provide cost-effective wholesale energy along with products and services that support and unite rural America. Generation for Generations; it’s a hopeful message. We are making the investments. We are ready for the next generation.

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