2019 ER Annual Report_website

TABLE OF CONTENTS
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Letter from the President and General Manager
REC Program: Enhancing Member Connections
Growing our Safety Leadership Culture
Public Policy: Staying Connected
Shaping Growth through Business Development
Protecting the Grid: Cyber Security
Extreme Weather: Maintaining our System
Shaping our Future Transmission System
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Best in Class: Touchstone Energy
10 Years of Co-ops in the Classroom
Evolving our Marketing Programs
Shaping our Connected Future
Supporting Community: REED Fund
Board of Directors
2018 Financial Statements
East River Senior Staff
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LETTER FROM THE
PRESIDENT
AND GENERAL
MANAGER
James Ryken, President
SHAPING A STRONGER TOMORROW
Tom Boyko, General Manager
East River and our member systems have a strong legacy of
providing safe, affordable and reliable power to our memberowners
in eastern South Dakota and western Minnesota. The
strength of our past came from our cooperative family’s leaders
working together to face the challenges and opportunities
through the 69 years of East River’s history.
Today, East River is working in close step with our member
systems to research and adopt new technologies, combat
cyber security threats, inform public policy, strengthen our
infrastructure and shape a stronger tomorrow.
As we step into the fast-paced future, our path is lined with
crucial decisions. Our continued success will rely on our
cooperative family remaining united and committed to our
collective future.
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In this annual report, you’ll read examples
from the past year that highlight how our
cooperative network is working together to
shape a strong future for our member-owners.
In 2019, East River set our transmission
system upgrade plan into motion. The plan
will invest hundreds of millions of dollars
over the next decade to replace aging
infrastructure, improve our system’s reliability
and accommodate continued load growth.
East River’s Renewable Energy Credit (REC)
program entered its third year in 2019 and 11
of our member systems are now offering the
program to their member-owners. By offering
the REC program at their local co-ops,
East River’s member co-ops can give their
member-owners a low-cost way to showcase
their support for renewable energy.
East River continued its award-winning farm
safety campaign in 2019. Now in its third year,
the campaign reminds farmers to be aware
of electrical equipment when working on the
farm and educates them on the steps to take
if their equipment contacts a power line. It also
showcases the great work that can happen
when our membership comes together
to drive change. East River established a
partnership with the South Dakota Department
of Agriculture this past year to distribute the
campaign’s brochures and equipment window
clings to all attendees of statewide pesticide
applicator trainings and we look forward to
continuing that partnership in future years.
East River’s business development efforts
continued expanding in 2019, alongside the
Rural Electric Economic Development (REED)
Fund, with overall goals to build connections
with prospective load-growing businesses
and show them the benefits of locating in the
service territories of our member systems.
In November 2018, East River and our
member systems hosted a regional Livestock
Development Summit on the South Dakota
State University campus. The purpose of the
regional summit was to address key issues
related to livestock development in our region,
discuss the most effective and responsible
ways to move forward and connect producers
with industry leaders and businesses.
In its second year, East River’s Cyber and IT
Services program is one of our newest servicesharing
opportunities and now has eight
member system participants. The program
provides participating co-ops with complete
cyber security and IT support and the co-ops
also receive full IT helpdesk services. The
program’s cyber security services include
logging, incident response, vulnerability
scanning, software patching, data backup,
end user training, monthly reports and more.
East River staff has been meeting with Dakota
State University (DSU) officials over the past
year about a potential smart home research
project. In mid-2019, NRECA and East River
entered into an agreement to begin the project
with researchers from DSU to explore the
technologies that will be included in the next
generation of the rural home. The project
will also work to find solutions that will allow
electric cooperatives to play an integral role
in helping consumers optimize their energy
usage.
Leadership on public policy remains an
important objective in East River’s strategic
plan and our team was hard at work again this
past year in Pierre, St. Paul and Washington,
D.C., representing our industry. By working
closely with our member systems as well as
with SDREA, MREA and NRECA in remaining
connected with elected public officials as well
as candidates for office, we ensure that the
electric cooperative voice remains strong both
locally and nationally.
East River was formed by the determination
and collective effort of our member systems.
Our continued success will rely on our
cooperative family staying committed to our
unified future. The great working relationships
between East River and our member systems
will enable us to shape an even stronger
tomorrow.
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REC PROGRAM:
ENHANCING
MEMBER
CONNECTIONS
East River’s Renewable Energy Credit (REC)
program entered its third year in 2019 and
11 of our member systems are now offering
the program to their member-owners.
Each year, East River’s members are allotted
renewable energy credits from Basin Electric’s
wind generation projects based on each coop’s
usage. Each megawatt-hour of electricity
generated from a renewable source equals one
renewable energy credit.
In the past, the RECs allotted to the member
systems were sold on the market and the funds
were distributed amongst our member systems.
However, in response to a growing number of
outside companies that are now selling RECs
directly to consumers and, in the process,
are coming between cooperatives and their
members, the local co-ops asked East River
to create this highly-customizable renewable
program through which each local co-op can sell
their allotted RECs to their member-owners.
The price and amount of the RECs sold are
determined by the local co-ops and can be sold
to residential or commercial members. East River
then retires them on the member’s behalf.
“By offering the REC program, East River’s
member systems can give their memberowners
a low-cost way to showcase their
support for renewable energy,” said East River
Communications and Marketing Manager
Shayla Ebsen.
In 2019, East River’s Member Services division
released a package of redesigned promotional
materials to help member systems promote
the REC program in their service territories.
The materials include a brochure, certificate of
participation, graphics to use on social media,
website images and more.
When a co-op enrolls in the program, East River
customizes the various materials to include the
co-op’s logo and other co-op specific information.
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A new participant badge is also now
available that residential or commercial
members can use as business window
clings, yard signs or in other ways that
showcase their support for renewable
energy.
Clay-Union Electric recently began
offering the REC program to their
member-owners. Both residential and
commercial members at Clay-Union
have signed up and interest in the
program is expanding throughout their
territory.
“The Renewable Energy Credit program
has allowed us to provide our members
an additional benefit while supporting
future green energy offerings,” said
Clay-Union Electric General Manager
Chris Larson.
“The Renewable Energy
Credit program has allowed
us to provide our members
an additional benefit while
supporting future green energy
offerings.”
- Clay-Union Electric General
Manager Chris Larson
Clay Rural Water Systems was one of
the first to participate in Clay-Union’s
REC program. Other co-ops are also
seeing interest in the program from rural
water systems that they serve because
being powered by renewable energy
can help rural water systems to secure
federal funding.
East River Board President Jim
Ryken, who serves as Clay-Union’s
representative on East River’s board is
one of Clay-Union’s residential members
enrolled in their REC program.
“The process of signing up for Clay-
Union’s REC program was very easy.
I’m on automatic withdrawal for my bill
and the program cost is just added to
my bill based on each month’s usage,”
said Ryken. “The co-op plans to use
the money from the REC program for
projects to enhance renewables. The
extra cost for a member to participate
is small, but, when put together, we
should be able to do some good.”
Clay-Union, H-D Electric, Lyon-Lincoln,
Renville-Sibley, Sioux Valley Energy,
Southeastern Electric, Traverse
Electric, Union County and Whetstone
Valley are currently using the program
and others are looking at rolling it out to
their members in the coming year.
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GROWING OUR
SAFETY
LEADERSHIP
CULTURE
The safety and health of our employees
is East River’s top priority. Our safety
improvement plan includes objectives
to embed a culture of safety and health
in our organization as well as to foster
safety leadership in all employees.
FOCUS ON SAFETY EMPLOYEE CAMPAIGN
In mid-2019, East River’s Focus Committee
launched an internal Focus on Safety campaign.
The campaign stresses the importance of
making safety a top priority in every task. It also
reminds employees that safety is everyone’s
responsibility and that everyone is a safety
leader.
“Whether you have been at East River for two
months, two years, two decades or longer,
you are a safety leader in our workforce,” said
Focus Committee Chair Denny Fouberg. “Every
employee must take personal responsibility for
maintaining our strong safety culture. We must
also work safely for our coworkers, our families
and for ourselves.”
The campaign focused on a different safety
message each month, with an overall goal of
ensuring that employees understand why they
must make safety a priority. Monthly tactics to
spread the campaign’s messaging included
posters, articles, talking points distributed by the
Focus Committee and more. Each employee
also received an adhesive photo frame imprinted
with the campaign’s main message. Employees
were asked to place the frame over a photo that
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showcases their reason for working safely and
then display their frame where they’d see it often.
“We all want to go home safe each night. We’re
able to do that by focusing completely on each
task at hand and by working safely through each
task for ourselves, our families and our coworkers,”
said Safety and Health Professional Nate Oines.
The Focus Committee will review the campaign at
the end of 2019 to assess its impact and plan 2020
messaging.
WORKLETE PROGRAM
A core part of maintaining East River’s strong
safety culture involves regularly reviewing data to
discover trends of workplace injuries and taking
action to reverse those trends. Through this process
of analysis, our Focus Committee uncovered a
trend of musculoskeletal injuries related to weak
body position.
“Every employee must take
personal responsibility for
maintaining our strong safety
culture. We must also work safely for
our coworkers, our families and for
ourselves.”
- Focus Committee Chair Denny Fouberg
“After we saw this trend, we started to research
opportunities for teaching employees about the
importance of using strong body positions in
everyday situations and tasks,” said Oines. “We
knew that the training program needed to extend
beyond ergonomics and also train employees on
strong movement within their work environment.”
The research led to Worklete, a program that
teaches participants to work like an athlete and
use the strongest body position through every task.
Worklete features fundamental body placement
lessons with additional lessons that are specific to
the electric utility industry. During the onboarding
process in early 2019, Worklete worked with East
River’s crews to identify additional unique tasks
that are performed by our employees. Their team
captured video footage of those unique tasks and
will use the footage to create future training content
for our employees.
“We’re excited to implement the Worklete program,”
said Oines. “They offer a comprehensive, easy to
understand and efficient way of training on strong
human movement.”
FARM SAFETY CAMPAIGN
East River continued its award-winning farm safety
campaign in 2019. The campaign reminds farmers
to be aware of electrical equipment when working
on the farm and educates them on the steps to
take if their equipment contacts a power line.
The campaign has achieved a broad reach in the
farm community during its three years and includes
a wide variety of tactics such as brochures,
window clings, tradeshow displays, TV and radio
ads, digital elements and more. East River also
established a partnership with the South Dakota
Department of Agriculture in 2019 to distribute the
campaign’s brochures and equipment window
clings to all attendees of statewide pesticide
applicator trainings.
“We were excited to establish the partnership
with the South Dakota Department of Ag,” said
Marketing and Communications Manager Shayla
Ebsen. “Applicators are a main audience that
we need to reach since they’re operating larger
equipment that’s most likely to contact power
lines. We hope to continue this partnership into the
future.”
The farm safety campaign showcases the great
work that can happen when our membership
comes together to drive change.
MINNESOTA SAFETY AWARD
East River received the Minnesota Safety
Council’s 2018 Meritorious Achievement Award in
Occupational Safety for excellence in workplace
safety and health. In consideration for this award,
our past incidents as well as our safety and health
program are evaluated against others in our
industry from across the nation.
Thank you to all employees for ensuring the
success of East River’s employee and public
safety campaigns as well as for taking personal
responsibility in maintaining our strong safety
culture.
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PUBLIC POLICY:
STAYING
CONNECTED
Leadership on public policy remains an
important objective in East River’s strategic
plan and our team was hard at work again this
past year in Pierre, St. Paul and Washington,
D.C., representing our industry.
By working closely with our member systems
as well as with SDREA, MREA and NRECA to
remain connected with elected public officials as
well as candidates for office, we ensure that the
electric cooperative voice remains strong both
locally and nationally.
“Our Action Committee for Rural Electrification,
or ACRE, remains an invaluable tool in helping
us maintain close ties with elected officials and
candidates for office,” said General Counsel Bob
Sahr. “Employee contributions to ACRE help
ensure that lawmakers are well informed on
cooperative issues when crafting legislation that
impacts our industry.”
STAYING CONNECTED WITH POLICY MAKERS
In June 2019, East River, Rushmore Electric,
Basin Electric and SDREA hosted a group of
South Dakota legislators at Basin’s facilities in
Bismarck. The trip is hosted bi-annually to provide
legislators with tours and informational sessions
about our industry. The legislators traveled from
the west and east sides of the Missouri River
to Bismarck to tour the Antelope Valley Station,
Dakota Gasification Company and the coal mine.
In addition to the tours, co-op representatives
provided the group with an overview of issues
that are important to our industry.
“The legislators who attended the trip said that it
was very valuable and that they came away with
a better understanding of our electric cooperative
network,” said Chief Member and Public Relations
Officer Chris Studer.
Also in June 2019, South Dakota Representative
Dusty Johnson visited East River and met with
our board during their June meeting. His visit
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included a productive discussion with the directors
on issues that affect our industry. Johnson also
gave an overview on his latest efforts in D.C.
“We appreciate the time that Congressman
Johnson took to visit East River and enjoyed the
“Our Action Committee for
Rural Electrification, or ACRE,
remains an invaluable tool in helping
us maintain close ties with elected
officials and candidates for office.”
- General Counsel Bob Sahr
opportunity to discuss a number of important
topics with him,” said Sahr.
SOUTH DAKOTA TERRITORIAL INTEGRITY ACT
South Dakota’s rural electric cooperatives
worked with Sen. Brock Greenfield who was the
lead sponsor of South Dakota Senate Bill 66
during the 2019 South Dakota legislative session.
Otherwise known as the Territorial Integrity Act,
the bill sought to freeze electric utility service
territories and stop municipal utility taking of
electric cooperative territory.
There are currently two sets of rules that govern
changes in South Dakota electric service territory.
By law, electric cooperatives and investorowned
utilities must collaborate and agree upon
changes in service territory between the two.
Municipal governments, on the other hand, have
the authority to expand their electric service
boundaries and take territory from incumbent
electric providers. These differences in the law
favor government-taking of private enterprise.
Senate Bill 66 sought to level the playing field by
requiring municipal electric utilities to follow the
same negotiation rules followed by rural electric
cooperatives and investor-owned utilities.
Electric cooperatives have built the infrastructure
needed to serve all areas of their territories.
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When municipal utilities take away the electric
service areas of those co-ops, the infrastructure,
including generation, transmission, substations
and distribution assets, that has been put into
place to serve the load becomes stranded. The
municipal-taking of incumbent utility territory also
greatly limits the incumbent’s ability to plan for the
future because territory neighboring a municipal
utility is so easily seized by the local government.
“Ultimately, electric co-op members are the ones
being hurt when our service areas are reduced,”
said Northern Electric Cooperative General
Manager Char Hager, who is chairing an SDREA
committee that was set up to help the cooperatives
prepare their case for the legislative committee.
“The cooperative members who are left behind
bear a greater share of the fixed operating costs,
increasing their electric bill. There are fewer
members to cover infrastructure and generation
costs when a territory is reduced in size. This
is especially detrimental to affordability for the
members of not-for-profit electric cooperatives.”
Towards the end of the 2019 legislative session,
the Territorial Integrity Act was hoghoused to
create an interim legislative committee that met
over the summer to study the issue of municipal
taking of co-op service territory.
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MINNESOTA LEGISLATIVE UPDATES
A strong push in Minnesota by Gov. Tim Walz
during the 2019 legislative session included a
bill that would have required utilities to provide
100 percent carbon-free electricity to MN
consumers by 2050. The House easily passed
the 100 percent carbon-free legislation, but
the bill never received a hearing in the Senate.
The new proposed standard was thrown out
in conference committee discussions, and the
bill died for the 2019 session. This will continue
to be an issue next session.
MREA coordinated a meeting with Gov. Walz
and the managers of the generation and
transmission co-ops that serve in Minnesota
to discuss the 100 percent carbon free energy
provision. East River General Manager Tom
Boyko attended the meeting along with Basin
Electric CEO/General Manager Paul Sukut
and the managers of Minnkota and Great
River Energy along with a representative from
Dairyland. MREA also coordinated meetings
with legislators to discuss the issue.
“The discussions focused on educating
legislators on what happened during the 2019
polar vortex when wind generators had to be
shut down due to the extreme temperatures
and that being 100 percent carbon free by
2050, or 80 percent renewable by 2035 is
unrealistic with today’s technology,” said Boyko.
Clean Energy First, which would have required
all new generation to come from clean energy
first unless the utility proves that fossil fuel
generation is a more viable option was
another energy provision that died during the
2019 session. This issue will almost certainly
return in 2020.
East River also continued work in Minnesota
with MREA this past year on Conservation
Improvement Program (CIP) reform. MREA
introduced a CIP modernization bill on behalf
of the Minnesota co-ops and municipals that
sought to give utilities credit for electrifying the
transportation sector and other fuel switching.
It also eliminated the spending goal, gave
flexibility to utilities trying to meet goals
through multi-year plans, and maintained the
current exemption for small cooperatives and
municipals.
The CIP modernization bill passed the Senate
Energy Committee as both a stand-alone bill
and as part of the Senate energy omnibus bill.
The House energy omnibus bill contained CIP
language, but it included more spending and
oversight requirements than under current
law and overall was a step backward from the
status quo. The House and the Department of
Commerce also tied the CIP modernization
reform provision to an ultimatum that MREA
would support the House’s clean energy first
and 100 percent carbon-free provisions. In the
end, the CIP modernization bill and the House
CIP provisions were not included in the final
bill.
AFFORDABLE CLEAN ENERGY RULE
The Environmental Protection Agency
finalized its Affordable Clean Energy (ACE)
rule in June 2019. The ACE rule officially
repeals and replaces the Clean Power Plan.
The new rule will be a longer-term solution
and gives cooperatives a more flexible way
to manage carbon emissions that won’t have
a major negative impact on the economy as
would have been the case with the Clean
Power Plan.
The ACE rule will regulate individual power
plants “inside the fence” and allows states
to regulate plants based on each individual
plant’s capabilities while taking into account
its remaining useful life. The state could look
at a power plant and determine the remaining
useful life is short enough that there is no
way carbon capture technology or heat rate
improvements would be cost recoverable
and then allow that plant to continue to run.
The rule provides greater regulatory certainty
and flexibility and a more legally-defensible
approach. Groups opposing the new rule have
said they will challenge it in court.
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SHAPING GROWTH
THROUGH
BUSINESS
DEVELOPMENT
East River’s business development efforts
continued expanding in 2019, alongside
the REED Fund, with overall goals to build
connections with prospective load-growing
businesses and show them the benefits of
locating in the service territories of our member
systems in eastern South Dakota and western
Minnesota.
LIVESTOCK DEVELOPMENT SUMMIT
In November 2018, East River and our member
systems hosted a regional Livestock Development
Summit on the South Dakota State University campus.
The purpose of the regional summit was to address
key issues related to livestock development in our
region, discuss the most effective and responsible
ways to move forward and connect producers with
industry leaders and businesses.
“The Summit targeted South Dakota and
southwestern Minnesota farm families as well as
community leaders who are interested in learning
more about emerging livestock development
opportunities,” said Business Development Director
Mike Jaspers. “We were pleased to welcome more
than 300 attendees to the event.”
Then South Dakota Governor Dennis Daugaard and
South Dakota State University President Barry Dunn
served as featured speakers. The day also included
panels on economic impacts, next generation farmer
outlooks, siting, zoning, permitting and finances. The
day ended with a networking session.
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East River was awarded a 2019 Silver Spotlight
on Excellence Award from NRECA in the category
of Best Event for the summit. The Spotlight on
Excellence Awards program recognizes outstanding
work produced by electric co-op communication and
marketing professionals from across the country.
Thanks to our board of directors and member system
managers for supporting the event and to everyone
who provided input and ideas for the summit.
“Our hope was that this regional discussion would
lead to interest among various entities to host local
summits, which it did,” said Jaspers. “The local
summits are structured to have more in-depth
conversations about how to increase local community
interest in and support of livestock operations.”
LOCAL AG DEVELOPMENT EVENTS
East River teamed up with Ag United in March 2019
to host a livestock seminar for producers who are
thinking of building a livestock facility or expanding
an existing facility. This event was hosted on East
River’s main campus and was attended by more
than 50 farmers and industry representatives. It
was structured to provide answers and ideas for
producers, ag lenders, ag insurance agents and
others involved in agriculture.
Based on the success of the March seminar, similar
meetings were held in July at Lake Area Tech in
Watertown and the Agtegra Innovation Center in
Aberdeen. Co-sponsorship of these events has
grown to also include the SD Soybean Research and
Promotion Council, Agtegra Cooperative, Dakotaland
Feeds, LLC and the SD Pork Producers Council.
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PROTECTING
THE GRID:
CYBER
SECURITY
Over the past year, our IT and cyber security
team successfully resolved nearly 5900
help desk tickets for our member systems.
In addition to this, East River handled and
successfully resolved over 5300 internal IT
help desk tickets.
The hard work of our IT and cyber security
team in resolving these help requests ensures
that East River’s operations continue to run as
efficiently and safely as possible.
The IT and cyber security team moved into a new
combined space this past year after previously
working in scattered areas throughout the main
campus. The newly remodeled space features
an open office concept that’s designed to foster
discussion and teamwork. It also includes
adjustable desks that allow employees to
transition between sitting and standing positions.
After construction wrapped up on East River’s
new Madison substation building, the IT team
began building a redundant data center in the
space. The redundant data center will improve
our ability to respond to failures and disasters.
Looking to the future, it will also allow East
River to offer additional needed services to our
member systems.
A few other key projects from the past year include
creating and implementing a cyber security
incident response plan as well as implementing
two-factor authentication for all remote and
SCADA connections. East River continues to
expand its SCADA access for members after
completing the multi-year project to redesign
the SCADA system and make it accessible from
any device. A top priority of our cyber security
team is to increase the cyber security awareness
of employees at East River and our member
systems. To help achieve this goal, they released
a series of brief cyber security videos on various
important topics. The videos are available to view
at any time on our internal website, The Grid.
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“Thank you to our IT and cyber security team
for your hard work this past year in completing
these various projects,” said Chief Information
Officer Dr. Pat Engebretson. “I’d also like to
thank the member systems for trusting our
team with your sensitive co-op information
and for working with us to enhance the cyber
security awareness of our cooperative family.”
CYBER AND IT SERVICES PROGRAM
Our cooperative family is always looking for
service-sharing opportunities that will benefit
East River’s member systems while minimizing
costs. From accessing low-cost hydropower
to creating youth education programs and
beyond, our history is ripe with examples of
our member systems working together through
their East River cooperative for the betterment
of all.
In its second year, East River’s Cyber and IT
Services program is one of our newest servicesharing
opportunities and now has eight
member system participants. The program is
unique among East River’s other federated
services in that each participating member
system pays individually for the program. The
program provides participating co-ops with
complete cyber security and IT support and the
co-ops also receive full IT helpdesk services.
The program’s cyber security services include
logging, incident response, vulnerability
scanning, software patching, data backup, end
user training, monthly reports and more.
FEM Electric has utilized East River’s IT
services for nearly 10 years and was one of
the first member systems to enroll in our Cyber
and IT Services program after it launched.
“As a smaller co-op, we knew that implementing
newer technology and ever-increasing security
needs was more than we could handle inhouse
without hiring an IT specialist,” said
FEM Electric General Manager/CEO Scott
Moore. “In the past, we found that working with
multiple IT companies was both costly and
time-consuming to complete projects. Now,
with the addition of cyber security, we use East
River as a one-stop IT shop and it is working
very well.”
Similar to FEM, Lyon-Lincoln Electric has
utilized East River’s IT services for many years
and was also one of the first members to enroll
in the Cyber and IT Services program. Lyon-
Lincoln General Manager Tim O’Leary said the
biggest improvement that has come from the
program so far was moving to a virtual server
that is maintained by East River’s IT team. He
also said that, because of the program, the coop’s
employees are more aware of the threats
that hackers present to their network.
“The biggest benefit of participating in
the program is knowing that East River’s
experienced and professional IT team is
maintaining our network system and looking
out for our co-op when it comes to identifying
threats to our physical, informational and
financial assets,” said O’Leary.
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EXTREME WEATHER:
MAINTAINING
OUR SYSTEM
East River set a new all-time record for peak
demand at 717.8 megawatts the last week of
January 2019 when our region experienced
a polar vortex which brought extremely cold
air temperatures and wind chills from 20 to
50 below zero. The previous peak record,
set in January 2018, was 696 megawatts.
The polar vortex’s impacts on our system started
late in the evening on January 27 when high
winds caused several short outages ranging
from momentary blinks to five minutes in length.
Members served from the Bowdle substation
experienced multiple outages and were without
power for about 3.5 hours due to the high winds
causing multiple breaker operations on the
Montana-Dakota Utilities system. A larger impact
to our system happened on January 27 when the
WAPA Huron substation experienced an outage
due to equipment failure.
“The need for our all-of-the-above generation
mix approach to supply electricity was
highlighted during the record-setting cold period
when wind generators across the entire region
had to be shut down,” said General Manager
Tom Boyko. “Weather stations installed on
each turbine automatically shut down the wind
generation when temperatures drop to -22
degrees Fahrenheit, as the extreme cold puts the
components of the wind tower at risk of failure.”
During that time, Basin Electric Power
Cooperative had about 1,100 megawatts of their
total 4,000 megawatts of power coming from
wind. When the wind generation had to shut
down, Basin turned to their reliable natural gas
and coal generation as well as market purchases
to meet member demand for electricity. A
shortage of natural gas during the polar vortex
in major urban areas like Minneapolis put further
demands on our generation fleet and market
purchases.
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“Overall, East River’s system performed well
through the extreme weather,” said Chief
Operations Officer Mark Hoffman. “This is a
testament to the investments that have been
made in the system by our member cooperatives
and the hard work of our employees in maintaining
the equipment. Those efforts have added to our
system’s resiliency in extreme conditions.”
MARCH STORM
In mid-March 2019, a late winter storm rolled
through our service territory bringing a mix of
rain, ice, snow and high winds. The storm began
affecting our system overnight on March 13 due to
high winds, ice and snow. East River experienced
more than 50 total breaker operations throughout
the weather event. Outage times ranged from
short durations up to 34 hours. In total, breaker
operations and outages affected 13 of our
member systems, 35 distribution substations and
just over 15,000 member-owners.
The storm broke 16 East River poles and
conductors in various phases. The most significant
damages and outages related to ice and snow
happened in the Summit area along the Grenville
tap. A 34-hour outage to the Grenville substation
affecting Lake Region’s members was caused by
13 broken poles. Crews were able to mobilize on
the morning of March 15 to begin repairs in that
area and restored power to the Grenville sub in
the early morning hours of March 17.
Flooding in the southern portion of our service
territory damaged a pole in the James River area
20

MWh
Generation Resource Position
January 29-30, 2019
3,500
3,000
2,500
2,000
1,500
1,000
500
0
1:00 5:00 9:00 13:00 17:00 21:00 1:00 5:00 9:00 13:00 17:00 21:00
January 29 January 30
Time (In Hours)
Wind
Coal
Gas
Load
Generation
moved from
West via
Basin
Electric ties
Throughout the storm, East River experienced
173 operations on our system affecting 18 of
our supply substations. We had outages on
96 East River substations and 10 municipal
substations to which East River wheels power.
Our member systems and neighboring
cooperatives also experienced significant
outages during the storm. East River assisted
Sioux Valley in their restoration efforts by
providing linemen and equipment for multiple
days.
On April 14, East River crews assisted the City
of Madison by restoring a section of the city’s
transmission line that was damaged by the
April storm.
The graph above was created by Basin Electric Power Cooperative and was provided to East River Electric for
use in our annual report. It demonstrates how wind power across the region had to be shut down during the
2019 polar vortex and highlights the need for our all-of-the-above generation mix.
about five miles north of Yankton on our Volin
to Utica tie. Crews had to wait until the flood
waters went down to replace that structure.
“Thank you to East River’s
membership for your cooperation
and patience as we worked through
the restoration process of both
storms and the challenging conditions
we faced throughout our territory.”
- General Manager Tom Boyko
East River’s shared communication
system with WAPA had two overhead fiber
breaks during the storm which isolated our
communications from Ft. Thompson to Pierre.
We experienced a four-hour outage on our
communications system until circuits could be
rerouted over different paths to our operations
center.
APRIL STORM
In mid-April, another late winter storm brought
a mix of rain, ice, snow and high winds and
caused widespread damage to East River
and our member systems. In total, the storm
damaged 37 of East River’s structures.
“We are proud to be a Madison community
partner and a big thanks to our crews for their
dedication in helping out the city in a time of
need,” said Hoffman.
East River also received a request from Great
River Energy for storm restoration assistance.
We responded to their request by sending two
linemen and a track digger-derrick to provide
assistance.
“Thank you to East River’s membership for
your cooperation and patience as we worked
through the restoration process of both storms
and the challenging conditions we faced
throughout our territory,” said Boyko. “Thank
you as well to our employees for your effort
and dedication in monitoring, maintaining and
safely repairing our system.”
21

SHAPING OUR FUTURE
TRANSMISSION
SYSTEM
In August 2018, East River’s board
of directors approved a transmission
system upgrade plan that will accelerate
additions and replacements to our
infrastructure over the next 10 to 12
years.
This approval came with the understanding
that the plan will be reassessed during each
year’s budgeting process and can be adapted
as needed based on new technologies, power
supply costs, or other changes.
“East River has spent a great deal of time and
effort maintaining our system over the past seven
decades. The original estimated life of our electric
plant was 40 years, but in many cases, because
of great maintenance and investment from our
members, we have infrastructure that has been
serving members well for more than 60 years,”
said Chief Operations Officer Mark Hoffman.
“But parts of the system are reaching the end of
their useful life and this will increasingly impact
reliability and limits our ability to accommodate
new load growth.”
The increasing age of our system, our continued
projected load growth, meeting increased
reliability demands and the difficulty in keeping
pace with member projects are just a few of the
reasons East River’s board of directors approved
the transmission system upgrade plan. East
River set the upgrade plan into motion at the start
of 2019 by submitting our RUS work plan and
receiving RUS approval on the first four years of
work outlined within the upgrade plan. This work
also included design and construction work on
the plan’s first projects as well as reorganizing
22

23

24

staff to carry out the transmission system
upgrade plan’s work while also maintaining
our current system.
“An important piece of the transmission system
upgrade plan has been hiring the best people
for completing the needed work,” said Human
Resources and Administration Manager Liz
Avery. “We are in the process of hiring more
employees to successfully complete the
increased workload of the replacement plan.
Also, where appropriate, East River is working
with external resources to complete projects. ”
The following projects are among the first
being implemented as part of the transmission
system upgrade plan. Our focus is on
upgrading infrastructure, accommodating load
growth and meeting higher reliability needs of
East River’s membership. Overall, the plan
is designed to shape the continued future
success of our cooperative family.
“An important piece of the
transmission system upgrade
plan has been hiring the best people
for completing the needed work.”
- East River Human Resources and
Administration Manager Liz Avery
LAKE COUNTY SUBSTATION
Construction began on the Lake County
substation in the summer of 2019. This is
a new facility within Sioux Valley Energy’s
service area.
This new substation is needed by East
River to reliably serve the area’s loads. East
River received a Notice to Construct for this
substation from the Southwest Power Pool
(SPP) to resolve low voltage issues on the
transmission system in the area around
Madison, S.D. This substation will serve our
membership and the area’s municipals to
which we wheel power.
LANCER SUBSTATION
As of summer 2019, plans for a new Lancer
substation were in the design stage with
construction anticipated to begin in the fall of
2019. This 115/69 kV substation will be located
in the Yankton, S.D., area providing a new
delivery point to the transmission system in the
area to meet load growth needs, resolve low
voltage issues and address reliability concerns
surrounding Yankton for the member-owners
of Bon Homme Yankton Electric.
MARSHALL SUBSTATION REBUILD
The current Marshall substation was
constructed in 1967 and has reached the end
of its useful life. This substation is served by
the Marshall tap, which is an interconnection
point between the Xcel Energy and East River
transmission systems which also interconnects
the Regional Transmission Organizations
(RTO) Midcontinent Independent System
Operator (MISO) and SPP.
The Marshall substation will be rebuilt to
provide better metering and coordination at
the interface between the two RTOs as well
as to increase reliability and capacity for the
member-owners of Lyon-Lincoln Electric.
VT HANLON TO SPENCER LINE REBUILD
East River’s VT Hanlon to Spencer stretch of
line that passes the towns of Montrose, Salem
and Spencer was identified as needing to
be rebuilt as part of the transmission system
upgrade plan because of its age, condition
and limited capacity abilities.
This stretch of line was built more than 60 years
ago and needs to be rebuilt to current design
standards to improve the capacity, reliability to
the area loads and better access to the line for
maintenance purposes. The total project will
include the construction of 24.5 miles and the
retirement of 23.5 miles.
25

BEST IN CLASS:
TOUCHSTONE
ENERGY
Touchstone Energy continues to be a
valuable asset for our family of cooperatives.
The Touchstone brand allows East River to
maintain an effective advertising program
for the collective benefit of our member
systems. Touchstone also serves as a mark
of best in class service that sets electric
cooperatives apart from other utilities.
“Touchstone Energy brings the power of a
national brand as well as innovative tools and
resources that help East River and our member
systems engage our communities and empower
our employees,” said Communications and
Marketing Manager Shayla Ebsen.
TOUCHSTONE BRAND EXPERIENCE WORKSHOP
East River, in collaboration with the national
Touchstone Energy team, Basin Electric and
Minnkota Power Cooperative, recently hosted
two Touchstone Brand Experience workshops.
The first workshop was held in Brandon, S.D.,
and the second took place in Fargo, N.D. The
workshops brought together communicators
and member services representatives from our
member systems to train the groups on the latest
resources and tools offered by Touchstone. The
events also provided training on Touchstone’s
new Best in Class model.
“The Best in Class model focuses on the four
pillars of cooperative performance, co-op culture,
digital engagement and member engagement,”
said Chief Member and Public Relations Officer
Chris Studer, who also serves as the chair of
the Touchstone Energy Regional Members
Committee. “The model is designed to help
Touchstone member co-ops access the tools
and resources they need to stand out as the gold
standard in our industry.”
RE-ENERGIZING RURAL CAMPAIGN
East River and our member co-ops expanded
our Re-Energizing Rural advertising campaign in
2019. The campaign first launched in 2018 with
a goal of highlighting the many ways that local
co-ops and their member-owners work together
26

to advance our region. The campaign includes
television ads, radio ads, digital efforts, articles
and other tactics. In 2019, we began working
with our member co-ops to highlight the inspiring
stories of their involved member-owners through
a series of web videos. One of the web videos
featured Sioux Valley Energy Director Dan
Leuthold.
“The video that was created featuring Dan
Leuthold is a great addition to our online and
social media presence,” said Sioux Valley Energy
Director of Communications and Government
Relations Carrie Vugteveen. “The messaging
was on point and really drives home the idea
that the cooperative difference really lies within
our members. We believe these types of
well-produced videos will help with member
engagement and will also help us tell the
cooperative story.”
In the coming year, East River plans to combine
portions of the member-owner videos that are
produced into a longer video that will serve as
the campaign’s next television advertisement.
BRAND BUILDER WEBSITE 2.0
East River first launched the Brand Builder
website for our member systems in 2018. It’s a
tool that each local co-op can use to access and
customize our regional advertising materials.
A main goal of the website is to strengthen the
connection between our regional advertising
efforts and each local co-op’s efforts. The
website is also intended to simplify the process
of creating and releasing marketing materials for
our member systems.
In 2019, East River launched the next generation
of the Brand Builder website for the membership.
The updated site includes faster loading speeds,
additional customization options and a layout
that’s easier to navigate. Looking ahead to the
coming year, we plan to continue stocking the
Brand Builder site with content packages for our
member systems to customize and release in
their service areas.
27

10 YEARS OF
CO-OPS
IN THE
CLASSROOM
The Co-ops in the Classroom program
celebrated its 10 th anniversary in 2019.
Almost 44,000 students throughout East
River’s service area have participated in
the program since it began in 2009.
East River Education and Outreach Coordinator
Jennifer Gross facilitates the program. She teaches
students ways to conserve electricity, how to be
safe around electricity, helps them recognize where
electricity comes from and also introduces them
to the cooperative business model and principles.
By learning these concepts from an early age,
the students will be better prepared to make
wise energy decisions now and be conscientious
consumers of energy in the future.
“Hearing them laugh while learning valuable
information makes me smile,” Gross said. “The
teachers also value the concepts the students
learn and their appreciation for the free program
makes it very worthwhile for the local cooperative.”
East River’s member cooperatives utilize the
program to build relationships with their local
school districts and reach their future members.
The students that participated in the program’s
first year back in 2009 will soon be graduating
from college, making career choices and some
might possibly return to their family farms. These
students are the future leaders of electric co-ops
and this program is a great way to encourage the
next generation of co-op member-owners.
28

29

30

“Co-ops in the Classroom illustrates how
electricity works and the importance of safety in
a way that the students remember,” said Central
Electric Manager of Communications Courtney
Deinert. “Additionally, it creates an initial
relationship with the school and students that
opens the door for future student engagement,
Youth Tour and more.”
The program is a great example of how East
River and our member systems work together
to enhance our communities. Gross works
closely with each local cooperative to schedule
the presentations. In the 2018-2019 school year,
she presented almost 200 times and visited 17
cooperative service territories. Combining the
resources and talents between East River and
our members allows us to bring a high-quality
educational experience to students who might
not otherwise have the opportunity to learn
about these topics.
“This is a great program that highlights how East
River and our member distribution systems can
team up to make a difference in our region,” said
East River Communications and Marketing
Manager Shayla Ebsen. “It also highlights
how our cooperative family is committed to
advancing the communities we serve.”
The program continues to grow each year and
is a great way for our member systems to live
out the cooperative principle of commitment to
community.
31

EVOLVING OUR
MARKETING
PROGRAMS
For nearly 35 years, East River’s member
systems have guided the success of our
marketing programs.
This success has been achieved, in part, by
the diligent work of our Communications and
Marketing Committee, which includes three
member services representatives and three
general managers from East River’s member
co-ops. This committee assists our Member
Services division with decisions for new and
existing rebate programs, researches new
marketing opportunities and helps guide our
advertising campaigns.
In 2019, the committee completed a
comprehensive review of East River’s rebate
programs. As we enter a new era of evolving
demand response and smart home technologies,
a main goal of the committee’s review was to
establish protocols for evaluating East River’s
new and existing marketing programs. The
committee requested that rebates offered by our
cooperative family should encourage beneficial
load growth, promote new technologies, apply
downward pressure on rates and raise member
satisfaction.
Several nationally-recognized regulatory tests
measure benefits and costs of utility programs.
The committee compared the test procedure
options and selected the Ratepayer Impact
Measure (RIM) test. The RIM test is the
most stringent of the testing procedures as it
calculates a program’s costs versus its benefits.
A rebate program passes the RIM test if the cost
vs. benefits outcome is above a 1.00. The RIM
testing process was completed on each rebate
from East River’s perspective and results above
a 1.00 mean the rebate puts downward pressure
on rates for all East River members.
“With concern for the prudent and effective use of
the members’ money, the committee requested a
measurement tool to justify the rebate programs,”
32

“The Ratepayer Impact
Measure test gave us the clear
picture we were looking for.
Now, using this industry standard
of measurement, the committee can
make informed recommendations
to maximize the impact of our
marketing dollars.”
- Communications and Marketing
Committee Chair Russell Gall
said Communications and Marketing Committee
Chair Russell Gall from Charles Mix Electric.
“The Ratepayer Impact Measure test gave us
the clear picture we were looking for. Now, using
this industry standard of measurement, the
committee can make informed recommendations
to maximize the impact of our marketing dollars.”
Based on the RIM test results, the committee voted
to continue the current Third-Party Irrigation, Heat
Pumps, Water Heaters, Commercial Lighting and
Energy Audit programs. The committee also voted
to discontinue our LED Residential and Energy
Star Appliance rebates based on the testing
results. As part of the assessment process, the
committee also reviewed a draft Third-Party
Grain Dryer rebate and voted to implement the
rebate based on the RIM testing outcome. After
the initial RIM testing process was complete, the
committee recommended an annual review of
all rebate programs as well as a RIM test audit
every three years.
East River is also recommending that our member
systems complete the RIM testing process from
each local co-op’s perspective. Doing so will help
each co-op determine if offering a specific rebate
will benefit their member-owners. East River’s
member systems utilize rebate programs as an
important member touchpoint to expand their
reputation as local energy experts.
33

SHAPING THE
CONNECTED
FUTURE
For nearly 35 years, East River has been
working in close step with our member
cooperatives to build one of the most
extensive electric co-op load management
programs in the country.
As of mid-2019, our load management program has
saved our cooperative family about $230 million in
avoided wholesale power costs.
Our current load management program has served
us well and we must ensure it continues meeting
the needs of our cooperative network into the future.
From electric vehicles to smart home technologies,
loads in consumer homes are changing. We are
partnering with our member systems and other
entities to research emerging technologies and to
ensure we take the proper steps now so consumers
and utilities will benefit from them.
ELECTRIC VEHICLE CHARGING INFRASTRUCTURE
The number of registered electric vehicles and
plug-in hybrids in South Dakota and nearby
states continues to rise. For example, as of 2019,
Minnesota had nearly 9,000 registered EVs and
plug-in hybrids and nearly 22,500 EVs and plug-in
hybrids were registered in Illinois. Those two states
also bring in the highest numbers of visitors to South
Dakota each year. Seeing this trend, East River
began discussions in 2019 with the South Dakota
Department of Tourism to explore opportunities
for working together in improving electric vehicle
infrastructure throughout the state.
34

“The tourism office’s staff are interested in
hearing more about our cooperative network’s
ideas on how to plan now for the influx of
electric vehicle owners from other states who
will likely visit South Dakota in the future and
who will expect a charging infrastructure that
will meet their needs,” said Chief Member
and Public Relations Officer Chris Studer.
“We look forward to future discussions with
the Department of Tourism and other state
agencies on this topic.”
East River also met with representatives from
the South Dakota Department of Environment
and Natural Resources (DENR) about the VW
Settlement funds that will become available in
the near future. The state received $8.1 million
from the settlement and the DENR plans to
set aside about $400,000 of those funds for
electric vehicle charging infrastructure.
“East River will continue to work with the
DENR and tourism office to find best uses for
the funds to build an electric vehicle charging
network in South Dakota,” said Studer.
Interest in electric vehicles is also increasing
among East River’s member systems. In
2019, several of our members requested
that East River’s Member Services division
begin exploring the possibility of offering
an EV charger rebate. While additional
research is needed regarding possible EV
rebates, we began the research process
by assessing three rebate options with our
Communications and Marketing Committee.
As part of our discussions with the DENR and
SD Department of Tourism, we also began
collecting information from our member coops
regarding prime locations to install public
EV chargers across the East River footprint.
SMART HOME RESEARCH PROJECT
From wi-fi thermostats to smart appliances,
East River and our member systems are
seeing increased adoption of smart home
technologies among consumers in our service
territory. While current technologies can
help manage electricity usage and benefit
consumers, we noticed a gap between the
capabilities of those technologies and the
demand response needs of our utility network
connecting to them.
In response to that gap, East River staff has
been meeting with Dakota State University
(DSU) officials over the past year about a
potential smart home research project. In
mid-2019, NRECA and East River entered
into an agreement to begin the project with
researchers from DSU to explore technologies
that will be included in the next generation
rural home. The project will also work to find
solutions that will allow electric cooperatives
to play an integral role in helping consumers
optimize their energy usage.
The research project will include three phases,
with an initial exploratory phase investigating
current products to determine how utilities
could utilize existing technologies to control
loads within a home. The exploratory phase
will also research the potential to build utilityspecific
technologies, both hardware and
software, that could be used in homes to
optimize energy usage and control wholesale
power costs. The second phase will include
creating a utility connected smart home
laboratory space modeled after a real home.
The lab space will be housed at the Madison
Cyberlabs (MadLabs) building that will open
on the DSU campus in fall 2019. The third
phase could include field testing of potential
products in consumer homes to determine
the viability of any hardware and software that
is developed.
NRECA staff has provided DSU with an initial
list of smart home products and software for
the project’s exploratory phase. East River
staff is also working with DSU on providing
ideas and direction on technologies that will
be part of the exploratory phase as we look
into existing technologies and how they could
integrate with our load management program
and new products.
“As use of smart home technology continues
to increase among our membership, we’re
hoping to use this research project to identify
technologies that will help us in our transition
to a new demand response future to help
consumers optimize energy usage and save
them money,” said Studer.
35

SUPPORTING
COMMUNITY:
REED FUND
The Rural Electric Economic
Development (REED) Fund, which is
governed by 26 electric cooperatives
in South Dakota and Minnesota, had
another strong year in 2018, issuing 16
loans for $6.9 million.
Since 1996 the REED Fund has invested more
than $100 million in the region through more
than 338 loans. The REED Fund and partner
lenders have combined to distribute more than
$858 million in economic investment, 9,400 jobs
have been impacted, and 2.3 million square feet
of facilities have been constructed or renovated,
mostly by non-profit development corporations
committed to helping the region grow.
“The REED Fund experienced modest
membership growth and completed 2018 in
a strong financial position thanks to the active
involvement of its member cooperatives,” said
REED Fund Board Chair Ken Schlimgen. “The
REED Fund is a valued resource for improving
economic development and community
resources throughout REED’s footprint.”
COMMUNITY PARTNERSHIP
REED lends to business/agribusiness,
community projects and housing development.
Since 1996, 33 percent of REED’s lending
has gone to cooperatively-served projects, 15
percent in communities with municipal electric
systems and 52 percent in towns served by
investor-owned utilities.
36

37

38

“The REED Fund’s cooperative members
believe that economic development, the
community, and the cooperative memberowners
are interdependent. Together we can all
thrive,” said East River Economic Development
Manager Linda Salmonson who serves as
the REED Fund’s assistant administrator. “It
is because of this interdependence that the
REED member cooperatives provide financing
without regard to electric service boundaries.”
65 percent of dollars and 60 percent of loans
have gone to business start-ups and expansion
such as to Medgene Labs in Brookings, the
only South Dakota company that manufactures
livestock vaccines. REED also assisted the
SDSU Growth Partnership to aqcuire the
Brookings Research Park property. In fall 2019,
REED will provide financing to the Vermillion
Chamber and Development Corporation for a
facility leased to the National Music Museum
for research, restoration and protection of over
15,000 artifacts not on public display.
“The co-op members of the
REED Fund believe that economic
development, the community, and
the cooperative member-owners are
interdependent. Together we can all
thrive.”
- East River Economic Development
Manager Linda Salmonson
REED assistance to health care throughout
the region now totals more than $7.7 million.
Health care loans include funding to the
Eureka and Bowdle hospitals and Avera
Milbank in addition to 28 other clinics and
hospitals. Quality education is important to
REED member cooperatives as well, with over
$10.1 million loaned for improving classrooms,
purchasing technology and constructing new
facilities for youth and people with disabilities.
Andes Central Schools, Mitchell Technical
Institute as well as the Boys and Girls Club of
Aberdeen are three of the 24 beneficiaries of
REED loans for education.
REED has also provided infrastructure loans
to 24 communities to upgrade water and
wastewater systems, and 21 communities used
REED financing to upgrade fire protection,
emergency facilities and equipment. REED
financed 15 additional community facilities for
public use. The communities of Wall, Faulkton,
Parkston, Lake Norden and Beresford are a
few of the towns that have received loans.
FEATURED PROJECT: ANDES CENTRAL SCHOOLS
Public school students at Andes Central
Schools can now attend classes in state-of-theart
facilities in the heart of Lake Andes, S.D.,
thanks, in part, to a REED Fund loan through
Charles Mix Electric. For many years, local
leaders in Lake Andes wanted to upgrade the
district’s outdated buildings by renovating the
elementary school and expanding it to house
the junior high and high school, which were
located in a separate building across town.
The REED Fund loan, along with financing
from Dakota Resources and funds from the
Andes Central School’s reserves, turned
those plans into reality in the fall of 2017 when
ground was broken and construction began on
the new, combined campus.
The updated school campus now includes
55,000 square feet of space and connects
the high school with the elementary school.
New classrooms, restrooms, specialty rooms,
administrative offices, a courtyard, two new
gymnasiums and various other amenities
were included in the project.
The team from Andes Central hosted a tour
of the completed school in May 2019. School
board members and staff from Andes Central,
directors and employees from Charles Mix
Electric, REED board members and staff,
as well as staff from Dakota Resources and
USDA Rural Development attended the tour.
“The new school building is a thoughtfully
planned addition to the community as it
creates a great learning environment for the
students of Andes Central,” said Charles Mix
Electric General Manager Russell Gall. “I was
impressed by the combination of the latest
technology with considerations for nature
and the area culture. I am very proud that
Charles Mix Electric was able to be a part of
this project through the REED Fund. It is a real
distinction for the cooperatives when it comes
to economic development achievements.”
39

EAST RIVER
BOARD OF
DIRECTORS
James Ryken, President
Clay-Union Electric
Pat Homan, Vice President
Traverse Electric
East River Electric is governed by a
22-person Board of Directors. Each
director is elected and represents
one of East River’s member
systems. 2019 marked Kermit
Pearson’s 30th year on East River’s
board of directors.
Ervin Fink, Secretary
Douglas Electric
Bert Rogness, Treasurer
H-D Electric
40

John Ostraat
Southeastern Electric
Duane Wolbrink
Central Electric
Ron Samuelson
Charles Mix Electric
Alan Vedvei
Kingsbury Electric
Kermit Pearson
Lake Region Electric
Darren Strasser
Whetstone Valley Electric
Deb McCreary
City of Elk Point
David Allen
Dakota Energy
Gary Bachman
FEM Electric
Galen Grant
Lyon-Lincoln Electric
Mark Sumption
Northern Electric
Ken Gillaspie
Oahe Electric
Alan ‘Whitey’ Hinderman
Renville-Sibley Cooperative
Power
Dave Warkenthien
Codington-Clark Electric
Paul Voigt
Bon Homme Yankton Electric
Don Schurdevin
Union County Electric
Rodney DeMent
Sioux Valley Energy
Michael Baune
Redwood Electric/Class D
Member Representative
41

EAST RIVER
MEMBER
SYSTEMS
East River’s 25 member systems
provide power to hundreds of
thousands of people and serve
more than 128,000 homes and
businesses.
Member Systems
Consumer
Accounts
Miles
of Line
Peak
Demand
(MW)
kWh Sales
1 Agralite 5,235 2,429 30.3 231,038,015 *
2 Bon Homme Yankton 3,835 1,296 20.4 93,866,459
3 Central 7,199 4,483 63.0 371,897,937
4 Charles Mix 2,569 1,311 12.7 65,013,851
5 City of Elk Point 970 16 3.9 18,363,639
6 Clay-Union 3,432 1,170 14.5 76,753,538
7 Codington-Clark 3,330 1,891 25.0 128,032,482
8 Dakota Energy 3,577 2,531 41.3 249,429,107
9 Douglas 818 500 5.9 25,102,858
10 FEM 2,107 2,040 24.9 167,215,499
11 H-D 3,621 1,579 22.1 102,571,074
12 Kingsbury 1,104 674 6.2 26,592,880
13 Lake Region 3,471 1,734 34.7 204,061,301
14 Lyon-Lincoln 3,908 1,667 20.8 99,462,710
15 Meeker 8,966 1,936 27.8 202,283,843 *
16 Northern 6,516 2,505 61.8 309,093,317
17 Oahe 3,183 1,202 20.3 99,660,089
18 Redwood 4,446 1,325 15.8 136,622,428 *
19 Renville-Sibley 1,883 1,035 29.2 188,918,012
20 Sioux Valley Energy 25,763 6,050 121.3 836,720,578
21 South Central 5,834 2,462 32.1 229,627,615 *
22 Southeastern 18,370 4,357 118.9 707,453,280
23 Traverse 3,051 1,702 19.8 108,574,832
24 Union County 1,634 511 7.1 33,486,578
25 Whetstone Valley 3,396 1,482 21.0 100,417,267
TOTAL 128,218 47,888 4,812,259,189
*Partial requirements member
42

43

EAST RIVER
2018
FINANCIALS
BALANCE SHEET
ASSETS AND OTHER DEBITS
DECEMBER 31 2018 2017
Utility Plant
Electric Plant in Service 418,102,044 378,874,071
Construction Work in Progress 38,094,234 44,636,268
Total Utility Plant 456,196,278 423,510,339
Less Depreciation 114,137,250 110,206,871
Net Utility Plant 342,059,028 313,303,468
Investments and Other Property
Non-Utility Property 962 1,664
Investments in Associated
148,149,277 122,208,796
Organizations
Other Investments 990,077 1,072,146
Special Funds 5,412,967 2,237,039
Total Investments & Other Property 154,553,283 125,519,645
Current Assets
Cash: General Operating Funds 4,409,067 1,697,363
Accounts Receivable: Members 23,509,125 25,136,351
Accounts Receivable: Others 4,166,843 4,429,390
Materials & Supplies 12,403,454 11,367,181
Prepayments & Total Current Assets 894,264 382,784
Total Current Assets 45,382,753 43,013,069
Deferred Debits 6,336,035 6,619,624
Total Assets & Other Debits 548,331,099 488,455,806
44

BALANCE SHEET
LIABILITIES AND OTHER CREDITS
DECEMBER 31 2018 2017
Equities
Membership Fees 2,500 2,500
Appropriated Margins 4,450,000 4,450,000
Patronage 205,124,467 170,670,565
Total Member and Patron Equities 209,576,967 175,123,065
Long Term Debt
RUS Mortgage Notes 6,848 89,070
Cooperative Finance Corporation
6,150,458 7,861,725
Notes
Federal Financing Bank 213,340,320 183,639,611
CoBank 57,068,517 60,562,253
Less Advance Payments 11,523,630 --
Total Long Term Debt 265,042,513 252,152,659
Noncurrent Liabilities 1,179,875 1,132,966
Line of Credit 30,500,000 24,000,000
Current Liabilities
Accounts Payable 31,894,009 27,906,960
Accrued Liabilities 3,781,355 4,949,235
Other Current Liabilities 919,976 930,445
Total Current Liabilities 36,595,340 33,786,640
Deferred Credits 5,436,404 2,260,476
Total Liabilities and Other Credits 548,331,099 488,455,806
45

EAST RIVER
2018
FINANCIALS
OPERATING STATEMENT
DECEMBER 31 2018 2017
Operating Revenues
Sales to Members 260,905,810 256,541,453
Other Electric Revenue 22,181,134 19,534,272
Total Revenues 283,086,944 276,075,725
Operating Expenses
Purchased Power 230,526,722 228,880,101
Operations and Maintenance 15,590,946 14,219,159
Administrative and General 9,576,816 8,990,070
Interest 10,140,759 9,538,821
Depreciation 9,338,475 8,740,918
Other Operating Expenses 81,410 78,375
Total Operating Expenses 275,255,128 270,447,444
Operating Margin 7,831,816 5,628,281
G&T and Other Capital Credits 31,326,983 10,452,889
Non-operating Margins 612,383 280,870
Net Margins 39,771,182 16,362,040
46

2018 REVENUES
Sales to members
Other operating revenues
92%
8%
2018 EXPENSES
Purchased power
Operations and maintenance
Interest
Administrative and general 3.4% 3.4%
3.7%
Depreciation
5.7%
83.8%
PEAK LOADS (MW)
Winter Peak
Summer Peak
AVERAGE WHOLESALE RATES (mills per kWh)
ENERGY SALES (millions of MWh)
TOTAL UTILITY PLANT VALUE (millions)
47

EAST RIVER
SENIOR
STAFF
Tom Boyko
General Manager
48
East River’s senior leaders
guide our workforce to fulfill our
cooperative’s mission and in
achieving the objectives of our
strategic plan. 2018-2019 brought
a few changes to our senior
leadership team. Greg Hollister
retired at the end of 2018 and
Dustin Zubke took over as East
River’s chief financial officer. Jim
Edwards retired in early 2019 and
Mark Hoffman was promoted as
East River’s new chief operations
officer.
Bob Sahr
General Counsel
Mark Hoffman
Chief Operations Officer
Dustin Zubke
Chief Financial Officer
Chris Studer
Chief Member and Public
Relations Officer
Dr. Patrick Engebretson
Chief Information Officer
Mike Jaspers
Business Development
Director