2011 AnnuAl RepoRt - Cass County Electric Cooperative

2 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTWendy LoucksChairman of the BoardScott W. HandyPresident/CEO

lighting the past and powering the future 3Dear Member Owners,One of the most memorable opening lines in classicalliterature is from Charles Dickens’ novel A Tale of Two Cities:“It was the best of times, it was the worst of times…” Whenreflecting back on 2011, it seems that would also be anappropriate line to describe your cooperative’s performanceand activities over the past year.We’ve done a pretty thorough job of detailing “the worst oftimes” scenario in our recent communications – coping withan unexpected 29.8% increase in wholesale power costs atthe beginning of 2011. When viewed through that lens it’seasy to overlook the many positive things that happenedlast year, but we did in fact have some “best of times” eventsand results. Another quote comes to mind, this one from themovie “Apollo 13” shortly after the explosion in the spacecapsule: “With all due respect, sir, I believe this will be ourfinest hour.” Adversity can in fact bring out the best in peopleand we saw that unfold many times throughout the past year.Immediately on learning of the wholesale rate increase thestaff and board set about making a plan to accomplish twoobjectives: 1) do whatever cost containment is necessary toshield the members from the full impact of the wholesalerate increase and 2) meet the minimum financial ratiosrequired by CCEC’s bankers. The plan worked, and in fact thecooperative’s operations not only absorbed $4.2 million of thewholesale rate increase but also produced healthy financialratios. This was not an easy task, and a lot of credit goes to thecooperative’s employees who made extraordinary efforts tostay well under budget. That’s remarkable given that we alsoadded over1,000 new accounts during the year.Here’s a short list of accomplishments and other significantevents from 2011:• CCEC’s drivers achieved over 2.2 million miles of driving (andstill counting) without a recordable accident.• CCEC met all requirements for our national associations’Safety Achievement Award, recognizing our continual safetyimprovements and qualifying us for significant discounts in ourinsurance coverage.• Through reorganizing around employee retirements andresignations the cooperative now has 94 full time employees,the same number we had in 1997 when we served about halfas many accounts.• The board of directors reconfigured CCEC’s director districts,which had remained unchanged since 1997. The changeswill take place over two years, with the addition of an at-largeposition in 2012, and the addition of a third position in themetro district in 2013. These changes were enabled by decisionsof two long-serving directors to not seek re-election in 2011 and2013.• CCEC’s Kindred office building was sold to a group of localinvestors, and the remaining employees there were transferredto the Fargo service center, combining the office employees intoone location and increasing efficiency.• An energy sales milestone was reached when sales exceededone billion kilowatt hours for the first time. 1,020,487,749kilowatt hours, to be exact. This places us among the top 10%(barely) of electric cooperatives in the nation in terms of sales.Overall energy sales increased 7.5% over 2010.• Equity reached an all-time high of 34.96%, just shy of our longtermgoal of 35%. Equity has increased dramatically over thepast 10 years, from 23.56% in 2001.• Emissions per kilowatt hour of the energy sold by CCEC havedecreased again in nearly every category. This is due to thehuge investments Minnkota Power Cooperative has made inemissions control projects at the Young generating station andthe high percentage of wind energy in our resource mix. Youcan find graphs showing emissions on our web site at www.kwh.com.• Agreement was reached in December 2011 to sell IdeaOneTelecom, of which CCEC is a half-owner, to Minnesota-basedHickoryTech. The deal closed in the first quarter of 2012 and willnet a substantial gain for CCEC.• Reliability improved over 2010, and would have improveddramatically had it not been for the Memorial Day windstormthat damaged a portion of the system.• Despite continuing improvements in emissions, theEnvironmental Protection Agency (EPA) chose to set aside theNorth Dakota State Health Department’s plan for regionalhaze control at the Young station and instead impose a federalimplementation plan. A hearing was held on this matter inOctober 2011 and we are thankful that EPA has now decided tohonor the state’s plan.There is some more good news, at least in the short term.Minnkota Power Cooperative is not anticipating a wholesalerate increase in 2012 nor in 2013. Since wholesale powernow makes up about 74% of our operating costs that’s goodnews. We expect our cost of operation to also remain stablefor the next few years. In fact, our distribution adder (the costof transporting one kilowatt hour from the substation to themeter) has remained virtually unchanged at about 2.2 cents/kilowatt hour since 1998. The 2011 distribution adder of2.158 cents/kilowatt hour is the lowest since 2003.We continue to watch the progress of EPA regulation closely.EPA’s final decision on regional haze will help avoid anotherhuge impact on future wholesale rates. Other EPA rulesinvolving the operation of diesel generators for peak shaving,possible reclassification of fly ash as a hazardous waste,and required reductions in mercury emissions are all underconsideration right now and will also impact wholesalepower costs to varying degrees.In summary, we feel that the cooperative has done acommendable job of playing the hand we were dealt in 2011.The staff and board remain focused on our core values andwe look forward to at least a couple of years of rate stability.We hope you make time to join us for the annual meeting onApril 19 and celebrate your cooperative’s 75th anniversary.Scott Handy, President/ CEOWendy Loucks, Chairman of the Board

4 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTWendy LoucksBoard ChairmanDistrict 5, FargoRussell BergVice ChairmanDistrict 6, HoraceJohn FroelichSecretaryDistrict 1, Valley CitySid BergTreasurerDistrict 3, ColfaxBill BertramDistrict 1, Valley CityDouglas AndersonDistrict 2, ArthurJeff TrieboldDistrict 4, FargoSteve SwiontekDistrict 5, FargoRobert HuetherDistrict 3, LisbonScott W. HandyPresident and CEOJane LindemannExecutive AssistantBrad SchmidtSr. VP of Transmission andDistribution ServicesMarshal AlbrightVP of Member andEnergy ServicesChad SapaVP of CorporateServices/ CFOTim SandenVP of InformationTechnology/ CIO

lighting the past and powering the future 5lighting the pastand powering thefutureThe mission of Cass County Electric Cooperative (CCEC)is to meet our members’ energy needs with excellentservice consisting of reliable and affordable electricitywhile upholding our core values of integrity, innovation,accountability and commitment to community.As a member of CCEC, you are an owner and you have a voice.CCEC’s service territory is divided into six districts. The boarddirector that speaks for your district is available to answerquestions and to listen to your concerns. If you would like toget in touch with your director, call 701.356.4400 and we willput you in touch with the appropriate director.CONTENTS3 Letter to Member Owners4 Executive Staff/ Board of Directors8 2011 in Review20 Financial InformationHighline Notes • Volume 70, Number 4 • Editor: Carrie Carney, ccarney@kwh.com • Designer: Jocelyn Lura, jlura@kwh.com • Printer: ForumCommunications Printing • Highline Notes (USPS 244-740) is published monthly except for July by Cass County Electric Cooperative Inc., 3312 42 nd St.S., Suite 200, Fargo, ND 58104. • Periodicals postage paid at Fargo, ND 58104. • Subscription Rate: 28¢/month. • POSTMASTER: Send address changes toHighline Notes, 3312 42 nd St. S., Suite 200, Fargo, ND 58104. * © Copyright Cass County Electric Cooperative 2009. • All rights reserved. • Printed in the U.S.A.

6 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTIn 1937, Cass County Electric Cooperative meant many things. It meant that ruralareas would illuminate like the cities that glimmered on the horizon. The start ofthe co-op meant a life made easier by lit barns for milking cows in the early, darkmornings in the winter. It meant ice boxes and coal stoves would give way to thenew, electric versions, making chores far less difficult. It meant modernization,opportunity and promise. Cass County Electric Cooperative, although it has growntremendously in the past 75 years, is still the same co-op that started based on thedream of a better life, drawn from the strength of the community and its members.Today,Cass County Electric Cooperative is proud of lighting the past and poweringthe future.

lighting the past and powering the futureNotice of7AnnualMeetingThe annual meeting of the members of Cass County ElectricCooperative Inc., will be held at the Scheels Arena, Urban PlainsCenter located at 5225 31st Ave SW., Fargo, North Dakota at6:45 p.m.* on Thursday, April 19, 2012, to take action upon thefollowing matters:1. The reports of officers, directors and committees2. The election of four directors3. All other business which may come before the meeting,or any adjournments thereofPursuant to the bylaws, the following members have filedpetitions for directorship of the Cooperative:District 2 Doug Anderson (I) Arthur, NDDistrict 3 Sid Berg (I) Colfax, NDDistrict 5-1 Wendy Loucks (I) Fargo, NDAt Large William Bowlin Fargo, NDAt Large Michael Clemens Wimbledon, NDAt Large Kevin Frost Hunter, NDAt Large Monte Gehrtz Fargo, NDAt Large Dale Kuntz Fargo, NDAt Large Randall Moen Hunter, NDAt Large David Suppes Fargo, NDAt Large Marcy Svenningsen Valley City, NDAt Large Mark Thelen Fargo, NDProgram5:00 - 6:45 p.m. Registration*5:00 - 6:40 p.m. Meal6:45 p.m. Welcome by former ND Governor SchaferCall to OrderEstablish QuorumReview minutes of previous meetingReview Bylaw revisions made in 2011Election of DirectorsBoard Chairman’s & President’s ReportFinancial ReportOld and New BusinessOpen DiscussionPrize Drawing (must be present to win)Adjournment* If a member has not registered or arrives after registration hasclosed, they will not receive “Voting Member” designation. Onlyregistered members will be allowed to vote.John Froelich, SecretaryDated this 19th day of March, 2012Any person representing a corporation which is a member ofthe Cooperative shall present evidence of his or her authorityto cast one vote on behalf of the corporate member.

8 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTyear end 2011 facts• 36,278 total accounts* 31,854 residential* 4,239 commercial and other* 185 irrigation• 10,476 load management devices• 4,701 miles of line• 32 substations• 1,020,487,749 kWh sold in 2011• $93 million in revenue in 2011• 94 full-time employees• Organized in 1937• Service in all or parts of Cass, Barnes, Traill,Richland, Ransom, Sargent, Dickey, LaMoure,Steele, and Stutsman Counties• Wholesale power supplier is MinnkotaPower Cooperative, Grand Forks, NDUS populationcost of livingThen (1938)128.9 MillionNow312.8 MillionAverage single-family home$4,100$160,735Price of a new Ford Pickup$585$35,000ENERGY MIX9% Hydro1 Gallon of gasoline1 Pound loaf of bread1 Gallon of milk$0.20$0.09$0.50$3.55$2.65$3.65First class postage stamp$0.03$0.45Cost/kWh$0.071$0.09158%Coal33%WindThen: in the first year, the cooperative had 89 members

lighting the past and powering the future 9The EPA’s challenge on the state’s regional hazeplan and wholesale rate increases as a result ofenivornmental upgrades were important issuesfor Cass County Electric Cooperative in 2011now: at the end of 2011, the cooperative had 36,278 members

10 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTPowering the futurewith efficiency andconservationSince the 1970s, when load control and energymanagement became a part of Cass County ElectricCooperative (CCEC), the co-op has had people on staffwho specialize in load management.Promoting energy efficiency and conservation is animportant part of CCEC’s operations. Being able tohelp members find ways to save energy and money isespecially important.Energy efficieny tips and ideas can be found on kwh.com, through social media, like Facebook and Twitter,and on our blog, The Outlet (you can find this on ourwebsite). Of course, members are always welcometo call us and visit with an energy expert. Over thephone, an energy expert can walk you through highuseissues and other concerns you may have. In 2011,the energy management department went beyondthe phone call, and visited 118 member’s homes forhigh-use concerns.The North Dakota State Energy Program ended onDecember 31, 2011. The program was a great success.Many CCEC members benefited from the program,which started in June of 2010. Over 550 membersreceived rebates, totaling over $326,000 in commercialrebates and over $329,000 in residential rebates forenergy efficient upgrades. This program was funded byfederal stimulus money and operated through the NDDepartment of Commerce. All of the money that wasallocated to North Dakota cooperatives has been used.NDSEP Residential RebatesWater Heater $13,300A/C $39,650Air Source Heat Pump $122,600Mini-split heat pump $16,600Insulation $25,642Audit $4,250Comfort plus storage heat $2,232Geothermal heat pump $74,160Heat Pump Water heater $250Wind $18,785Solar $11,539then: ccec sold 46,820 kwh through december 31, 1938

lighting the past and powering the future 11In the past year, CCEC continuedto promote energy efficienttechnology. There were 76 airsourceheat pumps placed on anoff-peak program on our system.Additionally, 49 shops were placedon off-peak, accounting for 42% ofthe off-peak load growth in 2011.There was 2,474 kW of off-peakload added in 2011.Heidi Gackle, EnergyManagement Representative,uses a variety of technologyin her everyday workWhy are off-peak programsimportant? They enable ourmembers to save money by beingon a program which allows CCEC tointerrupt qualifying loads at peaktimes in exchange for lower rates.Today at CCECA member calls in with a high-useconcern: their bill seems unusuallyexpensive this month. The callis given to an energy expert inCCEC’s energy management andconservation department. Theenergy expert, does a walk throughof the home... over the phone! Bythe end of the conversation, it’sbeen determined that the memberhas increased their usage throughgarage heat and plugging theircar into a block heater the entirenight. The energy managementand conservation representativesuggests setting the garage heatat a lower temperature and puttingthe block heater on a timer. Had theproblem not been resolved overthe phone, a member of the energymanagement and conservationteam may have deemed an inhomevisit necessary.now: CCEC sold 1,020,487,749 kwh in 2011

lighting the past and powering the future 13Safety training and policy are part of the cultureat CCEC. In 2011, the Cooperative celebrated anincredible milestone: CCEC’s fleet reached over twomillion miles driven without a recordable vehicleaccident. Throughout the year our lineworkersmust complete over 80 hours of safety training andparticipate in other instruction that includes pole toprescue training.Matt Olson,JourneymanLineworker works in abucket truckIn 2011, lineworkers restored 1532 outages. Of those,513 were planned and 61 were due to power supply.CCEC lineworkers replaced 485 poles and placed 95miles of primary cable. New work orders for 2011totaled 1336 (includes apartments). These work ordersinclude: 1221 in Fargo, 29 in Valley City, 33 in Arthur,and 25 in Kindred.Reliability is a critical part of our mission and ismeasured in several different ways, but we tend tolook at an index called ASAI (average service reliabilityindex.) This is the percent of time that electricity isavailable for member’s use. In 2011, our ASAI was99.9795, meaning that out of the entire year, onthe average, system-wide, members were withoutelectricity for a total of 107.65 minutes.Today at CCECAn apprentice lineworker begins at CCEC. The programis unique to CCEC. Because CCEC set up its ownapprenticeship program through the U.S. Departmentof Labor/Bureau of Apprenticeship & Training, alineworker can have the opportunity of employmentat CCEC while gaining experience and training thatwill go toward his/ her apprenticeship. An apprenticemust fulfill 8,000 hours of on-the-job training plus 300hours of safety training during the four-year programto earn journeyman status. CCEC had three summerapprentices in 2011.now: CCEC has 4,701 miles of line

14 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTPowering the futurewith education andtools.In 2011, informing our members of important issueswas key. The EPA’s challenge to our regional haze StateImplementation Plan was significant, and with helpfrom our members, North Dakota prevailed. MinnkotaPower Cooperative has spent more than $425 millionto install new Sulfur Dioxide scrubbers and installSelective Non-Catalytic Reduction and Over-FireAir techonology, reducing SO2 by 95 percent andNitrogen Oxides (NOx) by 55 to 60 percent, whichmeets North Dakota’s Regional Haze standards. TheEPA suggested these upgrades weren’t satisfactory,although their plan didn’t offer much difference as faras results.We asked our members to let the EPA and theirlegislators know that North Dakota’s plan wasthe best plan for air quality and for our members.Had the EPA’s proposal gone into effect, MinnkotaPower Cooperative’s costs would have increased anadditional 30-35%, affecting CCEC’s rates significantly.In March 2012, the EPA announced that it would notimplement the Federal Implementation Plan for theMilton R. Young station.CCEC reached out to our members on this topic andmuch more, through Highline Notes, North DakotaLIVING magazine, as well as through social media,such as Facebook, Twitter and our blog, The Outlet.Visits to our website, kwh.com average about 9,000per month. Members can sign up for service and paytheir bill online, as well as find information on savingenergy.In 2011, CCEC continued its commitment to makingmember’s lives a little easier. E-bill is an important partof this. Members can simply go to kwh.com, log on totheir account and not only pay their bill, but view paststatements and details on their energy use.In 2011, eight member accounts employees processedapproximately 432,000 bills. They also ensured that528,000 meters were read throughout the year. Theonline e-Bill payment/bill viewing option was up 23percent, Autopay was up 8 percent and paperlessbilling was up 41 percent.Then: In 1937, ccec received power from valley city municipal

lighting the past and powering the future 15CCEC is pleased to offer theseresources, as well as individualadvice. In 2011, 39 membersbrought their house plans infor an energy expert to analyze,followed by advice on whichheating and cooling systemwould be best for their newhome. CCEC is also availableto offer advice on replacingexisting heating systems. Eachmonth, there is an updatedAnnual Heating Chart thatgives updated and objectiveinformation on heating systemsand costs.Dean Reimer, journeymanlineman, views plantinformation on an iPadToday at CCECA member calls in to pay theirbill. It is due in a couple ofdays and they forgot to sendin payment. The member isbusy and mailing a payment orcalling in is just another task intheir day. A member accountsspecialist gladly helps themtake care of the payment, butsuggests they switch their billingpayment option to AutoPay. Themember accounts specialistexplains that their payment canbe automatically deducted fromtheir checking or credit cardaccount each month. For furtherease, the representative detailshow the member can choosePaperless Billing and simplyreceive an email notificationeach month of when their e-Billwill be paid. Further, the membercan check current and pastbilling statements online withe-Bill. Not only did the membersign up for these programs, butalso received a $10 credit forchoosing AutoPay!now: ccec is a member of minnkota power cooperative, its wholesale power provider

16 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTPowering the futurewith Technology.Looking to the future, CCEC has a healthy energyportfolio. We are located in a state with a natural supply oflignite coal. Recent technology through environmentalupgrades enables Minnkota Power Cooperative toproduce much cleaner energy. This coal accounts for58% of our energy portfolio. Wind makes up 33% andhydro 9%.Technology has always been an important operatingmeasure at CCEC. In 1959, CCEC installed its first onpremisecomputer. CCEC was the smallest utility to havea computer . Technology continues to be a driving forcebehind everything CCEC does.Automated Meter Reading, also known as AMR, is thetechnology of automatically collecting consumption,diagnostic, and status data from an electric meter andtransferring that data to a central database for billing,troubleshooting, and analyzing. By the end of 2011,62 percent of the membership’s energy use data wasgathered using AMR.Today at CCECAn outage occurs. Power control isnotified in mere moments thanks toSCADA technology. Perhaps a squirrelsneaked its way into a transformer,causing it to malfunction. With a fewflips of a switch, power is restored to alarge group of people affected by theoutage. Now, even though the problemhas not yet been fixed, lineworkers arefree to resolve the issue that will gounnoticed by members.Supervisory Control and Data Acquisition, often referredto as SCADA, is a system that enables our power controlcenter to monitor and control the power distributionsystem, including system load, and act accordingly whenthere are problems. A network of SCADA devices exist at15 of our 32 substations and 12 other strategic locationson our distribution system. At the end of 2011, 31,888 outof 36,394 member accounts were monitored by SCADA.Interactive Voice Response (we call it IVR) is CCEC’sautomated outage reporting system that helps usidentify outages and respond to them quickly. With theIVR system, members are able to report their outage andprovide us with specific information.CCEC will start implementing Smart Hub in 2012. SmartHub is an application that will allow members to monitortheir usage, pay their bill, report service issues and more,all from their computer or hand-held device. Look formore information in the May Highline Notes.Then: In 1959, ccec was the first REC in the nation to install an on-site computer

lighting the past and powering the future 17Tony Tasa, SCADATechnician at CCECnow: CCEC uses SCADA, AMR, IVR and hand-held devices like ipads

18 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTPowering the future as part of a healthy community.Commitment to community has been an integralpart of CCEC since it began 75 years ago. In 1937,it was the rural community that joined togetherand brought electricity to the Kindred area. Today,we are tied to our roots and work with our serviceareas to build and maintain strong communities.CCEC and its employees reached out to thecommunity through several group volunteeringefforts at the Emergency Food Pantry and GreatPlains Food Bank. CCEC’s transmission anddistribution department participates in the Mealson Wheels program throughout the year.During the summer months, CCEC participatedin safety demonstrations, such as the Red RiverValley Fair on July 12, as well as many paradesthroughout our service area.The CCEC sponsored RedHawks baseball gamewas on August 28. We gave out 1,200 tickets tomembers by holding a random drawing aftermembers sent in registration slips for a chance towin. CCEC treated fans to ice cream after the game.CCEC holds member meetings each fall to giveour members the opportunity to voice theirconcerns and opinions. In October of 2011, CCECheld meetings in Lisbon, Valley City and Fargo.Representatives from CCEC gave presentationson current issues and programs.During the holiday season, CCEC decorated 11Christmas trees for the Fraser, Ltd Festival of Trees.The trees were given to low-income families. CassCounty Electric and its employees donated 32gifts to the GIving Tree of Hope.Each year, CCEC selects a high school student,based on an essay/poster contest, and sendsthe winner to Washington D.C. for the NationalYouth Tour. The event, which is organized by theNational Rural Electric Cooperative Association,enables youth to learn about the political processand meet members of Congress. In 2011, DavidEide, of Fargo, was selected to represent CCEC.Operation Round Up is a program which roundsup members’ monthly bills to the next wholedollar amount. The resulting funds are put intoa special account used to assist local individualsand organizations in need. In 2011, a memberparticipating in Operation Round Up donated anaverage of $0.47 per month. A total of $129,175was donated to organizations and individuals.Recipients include the Dorothy Day House,Grandin Quick Response Unit, Minn-Kota Paaws,Fraser Ltd, CHARISM, FirstLINK, Inc., Project HEROand individuals needing assistance with medicalcare and other emergency needs all across ourservice area.CCEC contributes $500 to each of the 13 Dollarsfor Scholars chapters in our service area eachyear. Each local chapter chooses the recipient ofthe funds.Through its Speaker’s Bureau, CCEC providededucational opportunities to the public byspeaking to groups such as Kiwanis and localGirl Scouts. CCEC employees performed safetydemonstrations and talked to more than 25groups about energy efficiency and conservation,wind power, rates and more.Then: CCec was formed in 1937, serving part of Cass county

lighting the past and powering the future 19Cass County ElectricCooperative demonstratedlineworker equipment at theWest Fargo Park District HonkinHaulin Trucksnow: ccec serves all or parts of 10 counties

20 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTComparative Statistics(excluding subsidiary)2011 2010 % ChangeMember accounts served 36,278 35,241 2.9%Total kWh sold 1,020,487,749 949,128,606 7.5%Revenues $93,040,966 $81,323,053 14.4%*Avg. selling price per kWh sold 9.12¢ 8.57¢ 6.4%**Power cost per kWh sold 6.73¢ 5.76¢ 16.8%***Operating cost per kWh sold 2.16¢ 2.32¢ (6.9%)Employees (full-time) 94 96 (2.1%)*2010 U.S. median 10.23¢, **2010 U.S. median 6.63¢, ***2010 U.S. median 3.36¢U.S. Co-opsCCECU.S. Co-opsCCEC6.719.126.719.727.2010.098.5710.239.122.303.132.213.242.213.402.323.362.1620072008 2009 2010Avg. Selling Price/kWh201120072008 2009 2010Operating Costs/kWh(excluding power costs)20119491,02035,20036,30076429,30035748459112,90016,90021,10019901995 2000 2005 2010kWh Sales Growth(millions)201119901995 2000 2005 2010Member Accounts Served(rounded)2011

lighting the past and powering the future 21Consolidated StatementofOperationsOPERATING REVENUESElectricOther ElectricNon-electrical revenuesTotal operating revenues2011 2010$92,647,522393,44315,16793,056,132$80,952,353370,70037,40381,360,456OPERATING EXPENSESCost of powerOperations and maintenanceMember accountingMember service, informational and salesAdministrative and generalDepreciationTaxesInterest on long-term debtNon-electric cost of salesOther electricTotal operating expensesOperating margins before Capital CreditsOther Cooperative capital creditsNet operating margin68,702,2865,733,1211,678,196784,6522,863,8615,292,7371,047,9474,577,8258,47863,26390,752,3662,303,766407,2172,710,98354,701,7465,628,8181,645,450862,9303,073,5915,176,475976,0014,626,61816,99943,65976,752,2874,608,169197,6004,805,769NON-OPERATING MARGINInterest incomeIncome from affiliate - IdeaOne Telecom GroupOtherTotal non-operating marginsMARGIN before extraordinary lossExtraordinary lossNET MARGIN342,054930,93063,5551,336,5394,047,522-$4,047,522338,973764,38168,4601,171,8145,977,583(505,377)$5,472,206

22 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL REPORTConsolidated Balance SheetASSETSElectric plantIn serviceElectric plant under constructiontotal electric plantless accumulated depreciationNet electric plant$191,865,2894,572,943196,438,23247,298,726149,139,5062011 2010$184,611,3093,637,706188,249,01543,261,304144,987,711Other property and investmentsInvestments in available-for-sale securitiesInvestments in held-to-maturity securitiesInvestments in associated companiesInvestment in subsidiary plant, netOther investmentstotal other property and investments1,566,066502,7606,140,4172,5907,330,38815,542,221656,014655,7555,836,1304,6617,022,46314,175,023Current assetsCash and cash equivalentsCurrent maturity of ERC loansAccounts receivable, netUnbilled revenueShort-term investmentsMaterial and suppliesPrepaymentsDeferred tax assetInterest receivabletotal current assets5,843,313169,74410,814,9332,155,0001,000,0001,323,673156,422211,00052,66421,726,7496,823,088249,9259,642,4562,456,000-1,411,129151,498230,00047,59221,011,688Deferred debitsPast service pension costsTOTAL ASSETS181,635$186,590,111284,643$180,459,065Director’s Expenses2011 Director expense totaled $134,745.Per member cost equals $3.71. Directors’ expenses include fees paid for attendance at regular monthly board meetings,other industry related meetings including training and reimbursable travel expenses, and insurance.

lighting the past and powering the future 23EQUITIES AND LIABILITIESEquitiesPatronage capitalOther equitiesAccumulated earnings (deficit) of subsidiaryAccumulated other comprehensive gain (loss)total equities2011 2010$58,282,2515,896,283897,926(19,960)65,056,500$55,282,5765,914,485(30,860)11,27761,177,478Long-term debt, less current maturities101,208,857101,471,819Accumulated provision for pensions and benefits1,562,0611,484,945Current liabilitiesCurrent maturities of long-term debtCurrent maturities of post-retirement benefitsAccounts payable - generalAccounts payable to associated co. - power costsUnbilled power costCustomer depositsAccrued taxesAccrued interestTaxes payableOther current and accrued liabilitiestotal current liabilities4,322,000100,000482,4076,613,4002,496,000574,9622,125,91275,875211,0001,374,97618,376,5324,059,000150,000548,9755,341,0442,225,000566,4711,104,143292,239230,0001,401,56815,918,440Deferred creditsConsumers’ energy prepaymentsEstimated installation costs - special equipmenttotal deferred credits152,046234,115386,161156,612249,771406,383TOTAL EQUITIES AND LIABILITIES$186,590,111$180,459,065Auditor’s StatementThe financial statements for Cass County Electric Cooperative Inc. and subsidiary as of and for the years endedDecember 31, 2011 and 2010, have been audited by an independent accounting firm. An unqualified opinion wasissued for each year. Copies of the complete audited financial statements are on file at the cooperative’s office.

Cass County Electric is a member of Touchstone Energy, a national alliance of local,24 CASS COUNTY ELECTRIC COOPERATIVE 2011 ANNUAL member-owned REPORT electric cooperatives providing high standards of service to allmembers, large and small. In order to qualify as a Touchstone Energy partner, electriccooperatives must be active members of their communities, dedicated to serving allmembers with integrity, accountability, innovation and commitment to community.3312 42 nd St. S., Suite 200, Fargo, ND 58104800-248-3292www.kwh.comCCEC Annual MeetingExpressTicketmeeting04/19/125:00 PMScheels Arena5225 31 st Ave S, Fargo, nd 58104Thursday, april 19, 20125:00 PM to 9:00 pmenjoy entertainment by Merrillpiepkorn and the radio stars.questions: jocelyn at 701.356.4526a chance to win a $75 energy credit.We’re giving away 75!bring this page for express registration!