Financial Report

Project Dominoes
It’s worth reiterating how intricately connected the Basin Electric facilities and subsidiaries are. The gasification plant does not and cannot be considered a facility or resource that stands on its own.

In the late fall of 2015, when our budgets for 2016 were completed, we had budgeted for a very different scenario from what we were experiencing and expecting to confront throughout 2016.

However, we recognized early that we needed to make changes. We initiated a task force to update the current state, developed a plan for moving forward and implemented change. A cross-functional leadership team along with staff across Basin Electric’s departments and subsidiaries worked diligently in January and early February of this year to revise the cooperative’s budgets to be more in line with the new financial environment we were settling into for 2016.

The team investigated every possible opportunity to cut costs and save money. They included expense reductions, a freeze on hiring any new employees, delays in filling open positions, and the optimization of plant operations to name just a few.

It was undoubtedly a lengthy and extremely involved process.

Regarding Dakota Gasification Company ...

While the annual benefit to Basin Electric of operating the Great Plains Synfuels Plant has historically averaged approximately $80 million, our ongoing analysis shows that Dakota Gas is projected to provide an average yearly benefit to the membership of between $89 and $99 million during the 2017-2016 timeframe … that’s currently the equivalent of about three and three-quarter mills. In addition, the operation of the Synfuels Plant contributes to the economy of the state and region.

While our forecasts show that Dakota Gas will face financial challenges for the next few years, we're hopeful we've experienced the worst. Through our austerity measures and a bit of a rebound in commodity prices, our latest forecast shows Dakota Gas will return to profitability in 2021.

×