Capital Electric Cooperative held its 76th annual meeting on June 16 at the Bismarck Event Center in Bismarck. Nearly 500 member-owners and their families attended the event. While they waited for the meeting to start, members enjoyed a free meal and live music from Savanah Benz, and children played in bounce houses. They also got an up-close look at a bucket truck, digger derrick truck, the cooperative's fully electric Chevrolet Bolt and Textron Prowler EV, and a Tesla Model X.
Election of board members. The membership elected Kayla Pulvermacher (District 1), Sara Vollmer (District 2) and Lyndon Anderson (District 3) to serve on the co-op’s board of directors. Each director will serve a three-year term. Capital Electric congratulates those elected and thanks the following candidates for vying for a board position and being active members: Dave Nehring, Ron Day, Darwin Reinhardt, Greg Dehne and Kyle Hilken. The cooperative extends a special thank you to longtime board member, Kyle Hilken, for his 14 years of dedicated service to the Capital Electric Board of Directors.
Business meeting summary
Board President Deon Vilhauer and 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. Business Manager Luke Steen provided the business report. The cooperative's finances are healthy, and the value of the cooperative continues to increase as its membership grows. The cooperative received a clean audit opinion from Brady Martz.
Distribution side updates
A review of 2021 shows Capital Electric sold 377,201,986 kilowatt hours (kWh) of electricity, a 2% increase in sales from 2020. The cooperative experienced a net increase of 379 accounts and returned $1,891,851 in capital credits to its memberowners. Over the past 10 years, Capital Electric has paid out $14,165,000 in capital credits to current and former members. The cooperative carries an equity position of 39.3%.
From a reliability standpoint, Capital Electric consistently ranks in the top five percentile of electric utilities around the country for reliability as measured by annual outage time per consumer. This is by design through the cooperative’s long-term strategic commitment to reliability. In 2021, average outage numbers were up from 2020 due to a forced Southwest Power Pool (SPP) market blackout. This event occurred in February 2021 and impacted 60% of Capital Electric’s members, who were without power for approximately 40 minutes. Despite that blackout, the total average system uptime was 99.99%.
In 2021, Capital Electric had net plant additions of nearly $4.9 million. The cooperative added 25.7 miles of underground distribution line and retired 3.8 miles of overhead distribution line for a net addition of 21.9 miles of line. Infrastructure was installed for eight urban subdivisions and two subdivisions were converted from overhead to underground. Capital Electric rebuilt another 25 miles of rural overhead line and replaced two miles of aging underground line as part of the cooperative’s aging infrastructure initiative. After committing to rebuilding aging infrastructure more than 10 years ago, the cooperative has noticeably enhanced the reliability of its system.
Average kWh sales per service have not changed in the last 10 years. Capital Electric’s system peak, on the other hand, continues to increase. The cooperative’s load is heavily concentrated on residential accounts, along with retail and restaurant commercial services that have similar use patterns. Accordingly, the requirement for power during certain peak times of the day continues to set new system records. In the summer of 2021 alone, Capital Electric hit a new system peak on four separate occasions due to consistently high temperatures. The most recent system peak of 91,311 kilowatts (kW) is 4.3% higher than the previous system peak that occurred in 2020.
Overall, Capital Electric’s rates have remained stable since May 2016. However, costs associated with system peaks continue to impact the cooperative's power bill. For this reason, Capital Electric implemented the first of a seven-year revenue neutral rate shift for all members' general rates in May 2021. Despite the rate shift, the average member noticed a slight change in their overall electric bill amount. This change was necessary to provide accurate pricing signals, so members can make informed, long-term energy decisions. The second annual rate shift occurred in May and was reflected on the electric bills members received in early June.
No overall rate increase is expected in 2022, but growing headwinds, including significant inflationary cost pressures on materials and equipment, bring a strong possibility that a reasonable rate increase will be necessary in 2023.
Capital Electric continues to develop and encourage the adoption of off-peak programs. In the past year, the co-op’s board of directors approved two alternative rate options for members. Members who have elected these rates and shifted their usage patterns have found savings over the traditional rates.
Transmission side updates
Central Power Electric Cooperative, Capital Electric’s power supplier, continues its strong commitment to the reliability and redundancy of Capital Electric’s system. In 2021, a new 115-kilovolt substation in east Bismarck went live and was incorporated into a looped transmission system around the north and east side of Bismarck. This delivery substation also shores up power to rural areas of the cooperative's system. Additionally, Central Power is rebuilding important transmission lines between south Bismarck and Lincoln, as well as a new substation in northeast Bismarck, which will be completed in 2022.
About 90% of Capital Electric’s wholesale power is generated or purchased by Basin Electric Power Cooperative with the remaining 10% coming from the Western Area Power Administration (WAPA). Both perform vital functions in generating and procuring power and providing transmission services, which play a key role in the cooperative's system reliability.
Basin Electric had an excellent year in 2021, seeing strong margins with load forecasts recovering following the COVID-19 pandemic. The forecasted new load growth for Basin Electric is also encouraging. Opportunities and challenges remain as markets adjust to balancing reliability with intermittent renewable resources, legislation and regulation changes, and recent technologies, such as carbon capture and sequestration. Rates at Basin Electric are forecasted to remain steady for several years.
For WAPA, the water levels in the mainstem dams on the Missouri River are historically low, and both an overall rate increase and a drought adder are expected to take place in 2023.
New headquarters facility
Capital Electric purchased the Bilfinger Westcon building located just north of the intersection of Highway 83 and Highway 1804 for our future headquarters. This new location will provide the cooperative with direct access to two key highways within its service territory, a larger and flatter footprint and a location that continues to be within easy driving distance for most of the membership. The co-op plans to move into the new facility in November.
At the end of the meeting, the co-op drew five names for the $1,000 grand prize. Those drawn needed to be present to win. Since none were present, the co-op drew names for two $100 consolation prizes and presented checks to Gary Szczur and Ellen Duffey.
Again this year, Capital Electric awarded one $500 scholarship to a student who attended the annual meeting. Seven students attended the meeting and were entered into a drawing. Congratulations to this year’s scholarship winner, Keane Zimmerman, Bismarck!
Capital Electric thanks all who participated in this year’s annual meeting. Cooperative membership is cooperative ownership, and member participation is a key element to the co-op’s success. By participating in the annual meeting, Capital Electric’s member-owners hold the co-op accountable for decisions and help the co-op serve its members to the best of its ability. We hope to see you again next year!