Director elections, bylaws, and resolutions
Basin Electric directors are elected to three-year terms at Basin Electric Power Cooperative. Four directors were up for re-election at the 2018 annual meeting held Nov. 7 in Bismarck, ND. The Basin Electric board seats directors from 11 Class A membership districts.
Directors up for re-election:
- Kermit Pearson, District 1, East River Electric Power Cooperative
- Troy Presser, District 3, Central Power Electric Cooperative
- Allen Thiessen, District 8, Upper Missouri Power Cooperative
- Charlie Gilbert, District 11, Corn Belt Power Cooperative
Other Basin Electric directors:
- David Meschke, District 2, L&O Power Cooperative
- Thomas Wagner, District 4, Northwest Iowa Power Cooperative
- Leo Brekel, District 5, Tri State G&T
- Daniel Gliko, District 6, Central Montana Power Cooperative
- Mike McQuistion, District 7, Rushmore Electric Cooperative
- Wayne Peltier, District 9
- Paul Baker, District 10, Members 1st Power Cooperative
Basin Electric’s 2018 Bylaw Review Committee met Aug. 16 at Basin Electric Headquarters. The role of the committee, which is made up of one manager and one director from each district, is to review proposed amendments to the bylaws and provide recommendations to the membership.
During this year’s meeting, members of the committee reelected Vic Simmons, general manager of Rushmore Electric Power Cooperative, as chairperson. They then reviewed the following three proposed amendments and voted to recommend them to the membership.
Another option in the way patronage capital may be distributed. The Basin Electric bylaws currently require that capital credits be retired or paid out on a first-in, first-out basis, meaning the oldest capital credits are the first to be retired. This proposed change to the bylaws would provide that to the extent in any given year the consolidated margin and earnings exceed the consolidated net margins needed to maintain an “A” rating from the rating agencies, the board would have the option to the retire capital credits reflecting the “excess” on a last-in, first-out basis.
Raising the deferred revenue limit. Under the current bylaws, the board of directors has the option of deferring up to $200 million and setting it aside in a “rainy day fund” for up to 10 years. This proposed revision would increase that amount to $300 million for five years. After the five years have passed, the amount would be lowered back to $200 million.
Determining who sets the time and place for the election of Basin Electric directors. There is currently nothing in the Basin Electric bylaws as to who sets the time and place for Class A member caucuses to elect the directors that will represent them on the Basin Electric board of directors. This bylaw amendment gives that authority to the board of directors of each of the Class A members. District 9 would hold its caucus during the Basin Electric annual meeting.
As required by the bylaws, the three proposed amendments were included in the Notice of Annual Meeting mailed on Oct. 10. The members will have the opportunity to vote on the proposed amendments at Basin Electric’s Annual Meeting on Nov. 7.
The Basin Electric Resolutions Committee, made up of directors from each of Basin Electric's districts and a Basin Electric board member, had its annual review meeting Sept. 11-12, 2018 at Basin Electric’s Headquarters in Bismarck, North Dakota.
After re-electing David Sigloh, director of Upper Missouri Power Cooperative, as its chairperson, the committee reviewed the cooperative’s existing resolutions, voting to revise the current format by reworking the syntax from a formal prose to a more conversational text. This new format is being adopted by many cooperatives because it is easier for members to read and understand.
The committee also reviewed whether or not to eliminate approximately 20 resolutions to focus the resolutions on issues specific to Basin Electric. Twelve resolutions were deleted or merged with existing resolutions and the committee added a new resolution on retail choice to the "Energy Policy" section.
Following the review of the existing resolutions, the committee reviewed three proposed resolutions from member co-ops. The resolutions proposed to:
Revise Basin Electric’s mission and vision statements. It was proposed to revise the current mission statement, which was adopted by the board of directors in February 2018, to include the language, “for the members, by the members, with the members” to reinforce the cooperative’s member-owner focus.
It also proposed adding language in the vision statement to focus on fiduciary responsibility by stating the cooperative “provides low-cost, wholesale power” and that it is a “member-owned, democratically controlled organization focused on professional excellence and excellent member service.”
Members of the committee did not accept this resolution because they felt it is the responsibility of the Basin Electric board to develop the mission and vision statement. Committee members urged the member that proposed this resolution to communicate these suggestions directly to the Basin Electric board for consideration.
Develop a plan for lowering member rates. This resolution urged the Basin Electric board to develop a plan to reduce wholesale power costs, and thus reduce member rates by:
- Directing staff to develop a strategy and timelines to reduce rates and divest non-utility assets;
- Presenting that strategy to the member systems by the end of 2019; and
- Giving the members monthly progress reports of the activities associated with rate reductions and divestiture of assets.
This resolution was also not accepted by the Resolutions Committee, because the committee members felt it is the Basin Electric board’s responsibility to determine how rates are developed and assets are handled. The committee suggested the member that proposed this resolution bring these suggestions to the Basin Electric board for consideration.
Improve Basin Electric’s financial condition. This resolution complimented the board for its bold actions to offset the losses at Dakota Gasification Company and urged members to give these actions time to determine their effects. It also asked members to work with Basin Electric to address the effects of low natural gas prices and wind generation.
The committee did not accept this resolution for the same reasons as the first two. It will be sent back to the member that proposed it to determine if it can be reformatted as a letter and sent to the Basin Electric board for consideration. Further, this resolution was submitted by a Class C member without being submitted to the Class A member (due to time constraints). The committee urged that member to bring resolutions to its Class A member for consideration first.
In addition to the resolutions brought forward, the Resolutions Committee is also in the process of establishing the procedures, processes, and guidelines it follows into a written format. “A lot of institutional knowledge has recently left the cooperative, so we no longer have that to fall back on,” said Jean Schafer, Basin Electric senior legislative representative. “Now is the time to get this all in writing so new and existing members of the committee will have the information they need relating to Resolutions Committee process.” Moving forward, the Resolutions Committee will review these guidelines and principles, which will then be brought to the Basin Electric board of directors for approval.
The Resolutions Committee will meet again Nov. 6 and Nov. 7.