East River Electric 2020 Annual Report

eastriver89175

ENERGIZED FOR FOR THE THE

EAST RIVER ELECTRIC 2020 ANNUAL REPORT

EAST RIVER ELECTRIC 2020 ANNUAL REPORT



Table of

CONTENTS

02

04

10

12

16

20

22

Letter from the President and General Manager

COVID-19 Pandemic: Responding to the Crisis

Strategic Planning: Working Together with our

Member Systems

Advocating for Co-ops: Public Policy

Partnering for Innovation

Adding Solar Power to our Generation Mix

Transmission System Upgrade Plan

28

30

34

38

40

44

46

52

Recovering from Severe Weather

Focusing on Workforce Health & Safety

Meeting Member Needs

Hosting the 2019 Line Patrol Charity Ride

Fostering Business Development

Board of Directors

2019 Financial Statements

East River Senior Staff


Letter from the

PRESIDENT

AND

GENERAL

MANAGER

By far, the biggest impact on our industry and

our nation over the past year was the COVID-19

pandemic. From a near total shutdown of our

region’s ethanol industry and major impacts to

food processing plants and agricultural supply

chains to causing unprecedented unemployment

levels, the pandemic’s effects were broad

reaching and the full extent of its impacts have

not yet been realized.

2

James Ryken, President

Tom Boyko, General Manager

In this annual report, we have provided a recap of

the pandemic’s impacts to our industry as well as

details of how our cooperative network relied on

our shared resources to make it through. While

the pandemic brought immense struggles—both

on micro and macro levels—it also showcased the

strength of the cooperative business model and

the resilience of our cooperative family. Member

cooperatives stepped up to help each other

through this crisis and leaned on each other for


advice and shared best practices. The resilience of

our cooperative structure also came to the forefront,

with our member systems pulling together to share

resources, overcome challenges, support each other

and keep the power on for hundreds of thousands of

people in our region.

Outside of the pandemic, East River continued our

critical work of fulfilling the objectives that are outlined

within our strategic plan. We completed several

key projects for our transmission system upgrade

plan that are designed to strengthen our system’s

backbone. We also launched new service-sharing

programs and expanded several existing programs

this year, with end goals of helping the membership

fulfill their business needs and minimize costs.

East River’s strategic plan serves as our North Star

by outlining the strategic initiatives that our teams

strive to achieve and also by ensuring that each

business decision is made for the betterment of our

member systems. To keep our strategic plan aligned

with the future needs of our member systems, East

River began a new strategic planning process in

2020 in collaboration with our Board of Directors

and Managers Advisory Committee. We’re excited to

finalize and launch the next evolution of our strategic

plan in 2021 and continue the critical work to energize

our cooperative future.

East River exists to enhance the value of our member

systems and open communication with each local coop

is essential for ensuring that East River’s efforts are

in sync with the needs of the membership. It is through

collaboration, connection and communication that

our cooperative family will remain energized for the

future.

3


COVID-19

PANDEMIC:

Responding to

the Crisis

The World Health Organization officially

declared COVID-19 a pandemic on March

11, 2020. That was also around the same

time when the virus emerged locally in

our region.

East River was closely tracking the pandemic’s

spread into our region and took action to implement

our Pandemic Response Plan that exists as part of

our broader Emergency Restoration Plan. Due to

the fluidity of the situation, the leadership team

met several times each week and remained in close

contact to implement and evolve the response plan to

respond to situations as they arose.

“All of our efforts were made to keep our workforce

safe so that we could continue providing our essential

service,” said General Manager Tom Boyko. “I want to

commend the whole electric cooperative family on

their focus to provide our essential service. Without

4

electricity, modern society does not function. Every

essential societal function—from hospitals to food

distribution facilities and beyond—requires electricity.

It was essential that we continued as a co-op family

to provide our critical service and proactively position

ourselves to best serve our members through the

pandemic.”

The safety of our workforce has always been a top

priority at East River. Construction, maintenance and

operation of our system continued, but East River

took many steps to protect our employees and ensure

continued reliable service to our membership.

We suspended all non-essential business travel and

restricted all non-essential outside visitors from our

facilities. We also ramped up cleaning and sanitization

across our facilities. East River established a backup

system operations area and isolated a team

of operators to that area. Through a revised work


schedule, our day-shift system operators reported

to East River’s main system operations area and

night-shift workers reported to the back-up system

operations area.

East River split our Operations Division crews into

separate teams and limited face-to-face interaction

between the teams. We also increased our stock of

essential construction material as well as personal

protective equipment. In addition, we limited access to

East River’s warehouse. Many of our office employees

transitioned to remote work settings to prevent the

virus from spreading in our office environment.

As the pandemic progressed, it brought shortages

of hand sanitizer and other cleaning supplies across

the country. However, our team worked to secure and

receive a large shipment of hand sanitizer to ensure

ongoing access for East River and our members. We

also began ordering dry wipes to which sanitizer

could be added and used for our cleaning processes.

All East River employees received cloth face coverings

and crews working around our electrical plant

received flame retardant face coverings. In addition,

we procured and sent hand sanitizer, face masks and

infrared non-contact thermometers to our member

systems. We also coordinated with Rushmore Electric

and sent facemasks for the use of Rushmore and their

members.

“I applaud the work of our employees to ensure that

East River and our membership had the necessary

resources to maintain the best sanitization we could

provide as we implemented our return to work plans,”

said Chief Financial Officer Dustin Zubke.

In May 2020, as local COVID-19 cases began to decline,

East River implemented our Opening Back Up plan

to transition employees back into the office in a safe

manner. Our plan followed the guidance of the CDC

and provided resources to our employees during the

transition including reinforcement of social distancing

protocols as well as face coverings and hand sanitizer

provided by East River, among other items.

“All of our efforts were made to keep our

workforce safe so that we could continue

providing our essential service. I want to

commend the whole electric cooperative

family on their focus to provide our critical

service. Without electricity, modern society

does not function.”

Tom Boyko

East River General Manager

“I’ve been incredibly impressed with the resilience of

our employees and their efforts to serve our member

systems throughout the pandemic,” said Boyko. “I

would like to thank our workforce for your dedication

to East River and our members as well as for your

professionalism as we’ve worked to navigate these

unprecedented times.”

IT and Cybersecurity Support

East River’s IT and cybersecurity functions served as

an essential element of our pandemic response. The

processes and cybersecurity infrastructure that our IT

Division has put into place over the past several years

allowed East River to quickly transition portions of our

workforce to work from home and continue providing

our critical services throughout the pandemic.

“The effectiveness of our IT and cybersecurity

operations are a testament to the many years of

planning and support for projects by East River’s

Board of Directors, Managers Advisory Committee and

senior management,” said Boyko. “As a result of these

5


Administrative Support Specialist Anne Hall

joined a Teams call held by Chief Operations

Officer Mark Hoffman during the COVID-19

pandemic. Teams became a critical employee

communication channel during the pandemic.

projects, East River was successful in transitioning

staff to work remotely with no downtime.”

Member systems that were already enrolled in East

River’s IT and Cyber Services program were also fully

ready to convert traditional office staff to remote

work. Additionally, our IT Division developed a plan to

help co-ops that were not already part of the program

transition staff to remote work.

Hackers used the pandemic as an opportunity to send

an increased amount of phishing scam emails and

other hacking attempts. Additionally, while connecting

home computers to a corporate network can make

remote work possible, it also increases organizational

cybersecurity risks. Our IT and cybersecurity teams

6

were prepared for the enhanced hacking risks through

our monitoring and alert practices that were already

in place.

Beyond remaining diligent in protecting our

infrastructure against cybersecurity threats, our IT

Division was also instrumental in rolling out a new

communications channel to help our employees

communicate and collaborate during the pandemic.

Our employees relied heavily on the newly

implemented Microsoft Teams platform to send text

chats and also to host team video calls.

“Microsoft Teams has been a great tool for our staff

to safely communicate with colleagues during the

pandemic,” said Boyko. “There’s a lot of value in being


able to see someone during important discussions

and Teams allowed us to still have those beneficial

interactions while maintaining social distancing

guidelines.”

Member Communications Support

Communication, coordination and collaboration with

our member systems was a top priority through the

pandemic. East River scheduled an ongoing series

of calls with the member managers to communicate

our activities and to receive updates on their local

efforts. In addition to having regular calls with the

member system managers, we coordinated with

interdependent organizations like Basin and WAPA to

ensure continued communications.

East River’s Member Services team provided

communications support to our member systems

through the pandemic to ease the burden felt by

the local co-ops. We hosted conference calls with

the member system communications and member

services professionals to keep them updated on

the COVID-19 internal and external communications

resources available to their co-ops from various

associations. East River also created a series of

template pandemic communications materials for

members to use along with social media posts and

videos. With schools closed across the region because

of the pandemic, East River postponed all spring Coops

in the Classroom presentations. As a supplement

to the in-person program, we created a content

package of homeschool electricity experiments and

fun facts for the members to distribute to their local

schools.

The pandemic’s spread throughout our region

corresponded with the planned springtime annual

meetings of several East River member systems. As

the members began to announce the postponements

of their annual meetings, East River’s team started

researching possible alternative meeting options.

“Through our research, we learned the story of

Richmond Electric Cooperative in Wisconsin that

held a drive-in annual meeting for its membership

and knew that it could be a good option for some of

East River’s members,” said Chief Member and Public

Relations Officer Chris Studer.

East River’s team secured the FM transmitter and

provided other audio equipment that was needed.

We then worked with several of our member systems

that decided to host the drive-in alternative to their

memberships.

“East River exists to enhance the value of our member

cooperatives and we were pleased to secure the FM

transmitter and ensure that the local co-ops could still

host their annual meetings,” said Studer. “Ensuring

that member-owners remain engaged with their

electric co-op is essential at all times, but especially

during times of uncertainty, and the drive-in meeting

provided that opportunity for engagement.”

Supporting other Critical Businesses

A nationwide lack of personal protective equipment

for frontline workers heightened concerns and risks

surrounding the COVID-19 pandemic. Respirators were

one of the most crucial pieces of needed personal

protective equipment, and one in shortest supply.

In April 2020, East River was contacted by Northern

Electric in response to a call they received from 3M

about their Aberdeen plant. To meet the demand

for respirators, the 3M plant in Aberdeen expanded

its workforce and began running two 12 hour shifts

7 days per week. The plant contacted Northern, as

their power supplier, to ensure continued operation

7


In April 2020, East River transferred a mobile

substation to the substation serving the 3M plant

near Aberdeen. The sub was moved to provide

an emergency backup to the plant in the event

of any major outages. The 3M plant ramped

up production of N95 masks to meet demand

through the pandemic.

of the plant. Northern has multiple feeds from the

substation to the plant and East River has a dual

transmission feed to the substation. We coordinated

with Northern to ensure the 3M team that our system

was equipped to serve the plant with undisrupted

power, with no scheduled outages or switching and no

planned construction in the area that would affect the

plant. East River system operations put a heightened

awareness on the Aberdeen plant and planned to

bring that substation back on first in the event of an

outage.

As an additional precautionary measure, East River

and Northern Electric moved our mobile substation to

the substation serving 3M to serve as an emergency

8

backup in the rare event we would have had any major

issues in that area.

Advocating for Rural America

From temporary slowdowns and shutdowns of

food processing plants to ethanol plant workforce

reductions, slowdowns and shutdowns, rural America

suffered significant economic impacts caused by the

COVID-19 pandemic.

The nationwide steep drop in liquid fuel demand

during the pandemic resulted in a major economic

impact on biofuels processing plants across the

country. Estimates show as much as half of U.S.


ethanol production was idled. In addition, the

pandemic forced several food processing facilities to

either idle or shut down. These events left producers

of several agricultural commodities without a market

for their product, forcing some to euthanize animals

or destroy their products. The pandemic compounded

the impacts of low commodity prices and extreme

weather events that had already created a struggling

farm and rural economy.

created to provide electricity to farms and rural

communities and have continued to expand this

essential service as rural America has grown and

Continuing our cooperative family’s long tradition

of stepping up to assist our communities in times of

need, in May 2020, East River and its members were

part of a group of more than 30 cooperatives serving

members across the Upper Midwest to sign on to a

letter that urged members of Congress to provide

economic relief for rural America. The letter was

addressed to members of Congress from Minnesota,

South Dakota, North Dakota, Iowa and Nebraska.

“Reduced ethanol production and livestock

processing threatens our food and energy security,

and, in turn, results in reduced electric load, a burden

that ultimately falls on the individual members of an

electric cooperative,” the letter said. “The combination

of these issues poses a significant threat to the overall

well-being of the rural communities that we serve.”

Specifically, the letter called for Congress to support

additional stimulus package relief for food and ethanol

processing plants, and the farmers and ranchers

who serve them—most of whom are also electric

cooperative members. The electric cooperatives

represented on the letter combined serve over 3

million consumers across the region.

“We are respectfully requesting much-needed

economic relief for rural America, which continues to

suffer from the impacts of the coronavirus pandemic,”

the letter said. “Rural electric cooperatives were

In the photo: Cyber Security Analyst I Tanner Engbrecht.

East River’s IT and Cyber Security team members provided

invaluable support to East River employees and our

member systems throughout the COVID-19 pandemic.

prospered. Our member-owners have invested in

not only the electric infrastructure through their

cooperative to serve these areas, but also in helping

to develop the rural economy in which they live.

These investments have allowed for diversification

into biofuels, food processing, and other business

development opportunities.”

Through the pandemic and beyond, we continue our

important work of keeping rural issues top of mind for

lawmakers and federal agencies.

9


STRATEGIC

PLANNING:

Working Together with

our Member Systems

East River’s strategic plan serves as our

North Star by outlining the strategic

initiatives that our teams strive to achieve

and also by ensuring that each business

decision is made for the betterment of

our member systems.

Our current strategic plan was developed in 2015 when

East River’s board along with our senior management

team underwent a strategic planning process to

develop our first planning matrix that outlined a series

10

of strategic initiatives. Based on that plan, East River

has taken several crucial steps toward energizing the

future of our cooperative family.

“Our workforce has done a great job at directing their

efforts toward the initiatives that are outlined within

our strategic plan. The planning matrix truly serves

as our guiding compass to ensure we’re serving the

needs of East River’s membership,” said General

Manager Tom Boyko. “We regularly update our

board and member system managers on progress


toward accomplishing the strategic initiatives that are

outlined within the strategic plan.”

Five years have passed since the original plan was

developed, with East River’s team outlining new

yearly goals along the way to continue moving our

cooperative family forward toward the future. To

keep our strategic plan aligned with the future needs

of our member systems, East River began a new

strategic planning process in 2020 in collaboration

with our Board of Directors and Managers Advisory

Committee.

The process first launched with groups of member

system managers teaming up with each East River

senior staff member to outline the initiatives that

should be included in the next evolution of East

River’s strategic plan. The groups met several times

through the winter and spring to finetune the next

generation of strategic planning initiatives for each

East River division.

“To be successful, the development of the next

evolution of our strategic plan required close

collaboration with our member system managers,”

said Boyko. “East River exists to enhance the value

of our member systems and open communication

with each local co-op is essential for ensuring that

East River’s efforts are in sync with the needs of the

membership.”

A joint planning session with our Board of Directors,

Managers Advisory Committee and East River

management team that was originally planned for

April 2020 to review the initial plan was delayed due

to the COVID-19 pandemic.

“East River exists to enhance the value of our

member systems and open communication

with each local co-op is essential for ensuring

that East River’s efforts are in sync with the

needs of the membership.”

Tom Boyko

East River General Manager

A rescheduled planning session was held in August

2020, with a goal of implementing the new plan

starting in 2021. Leading up to the joint planning

session, each East River senior staff member held a

townhall-style meeting for all East River employees to

outline the updated plans for each division as well as

to take in feedback from the workforce.

“East River is owned by its member cooperatives,

and working closely with them through this process

and aligning our goals and objectives with the

membership ensures that we’re collectively moving in

the same direction and making sure we’re energized

for the future,” said Boyko.

Strategic Planning Snapshot

East River’s current strategic plan was developed in 2015 under the guidance of our

Board of Directors. Each year since 2015, East River’s employees have outlined new goals

for achieving the strategic plan’s initiatives to continue moving our cooperative family

toward the future. We are currently working with our Board of Directors and Managers

Advisory Committee to develop a new strategic plan that will guide our efforts in 2021

and beyond.


Advocating for Co-ops:

MUNICIPAL

TAKINGS

The 2020 South Dakota legislative

session marked the second consecutive

year South Dakota’s electric cooperatives

worked with lawmakers to find a solution

to the issue of municipal government

taking of co-op service territory.

An exception in current state law allows the 35

municipal electric systems in South Dakota to take

electric service territory in newly annexed areas

from adjoining electric cooperatives and investorowned

utilities (IOUs). State law establishes territory

boundaries for all electric utilities to protect

consumers, facilitate efficient long-term planning of

the electric grid and to avoid costly duplication of

service and infrastructure. The law’s exception that

gives municipal electric systems the unilateral option

to take over service territory in newly annexed areas

negatively impacts the consumers left behind.

“Rural electric cooperatives and IOUs can’t take

territory away from municipals, and these differences

in the rules favor government taking of private

enterprise,” said General Counsel Bob Sahr. “It is

fundamentally unfair that South Dakota’s municipal

electric systems have the unfettered option to take

away the service areas of electric cooperatives and

12


IOUs without any ability for the incumbent utility to

argue against the taking and receive due process.”

In 2019, the South Dakota Rural Electric Association

worked with Sen. Brock Greenfield (R-Dist. 2) to

introduce Senate Bill 66, otherwise known as the

Territorial Integrity Act, to address the long-standing

problem of electric service territory takings by

municipal governments. SB 66 would have frozen

service territories of the municipal electric systems,

putting them on a level playing field with the coops

and IOUs. Ultimately the stakeholders amended

SB 66 to create a summer study committee of nine

legislators that were tasked with studying the issue of

municipal taking of co-op service territory.

the utilities could not negotiate an agreement as to

who would serve the newly annexed areas, the Public

Utilities Commission (PUC) would settle the dispute.

The compromise framework was structured into

Senate Bill 227 and brought forward by the committee

chairman, Sen. Alan Solano.

2019 Summer Study Hearings

The Electric Services in an Annexed Area legislative

summer study committee held three hearings in

2019 to study and evaluate the government-taking

process, economic development practices of electric

utilities, the history of defined service territories

and ratemaking practices of electric utilities. South

Dakota’s cooperatives approached the study as an

opportunity to engage in a serious discussion about

a real problem and made a commitment to present

the electric cooperative position in a professional

manner, respect the summer study process and strive

to find a compromise. Several representatives from

East River’s member systems as well as East River

employees testified at the hearings.

At the third hearing, the committee considered nine

legislator-submitted proposals to address the issue

and voted 8-1 in favor of compromise language that

would have required regular meetings and good faith

negotiations between all utilities involved in electric

service territory boundaries in newly annexed areas.

The compromise framework further stated that if

Electric co-op employees and directors from across South

Dakota attended the hearings held in 2019 by the Electric

Services in an Annexed Area legislative summer study

committee.

“The compromise framework represented a significant

step back from asking for a territory freeze and

was a true compromise on the part of the electric

cooperatives,” said Sahr.

Unfortunately, in subsequent meetings, municipal

electric lobbyists said they never agreed to any

compromise that would put territory issues in front

of the PUC. While SDREA and its members were

committed to following through on the good work

of Senator Solano and the summer study committee,

conversations to finalize the compromise bill language

with the municipals came to a standstill and ultimately

ended.

13


“The legislative committee spent a lot of time and

effort to work with all parties involved to adopt the

compromise and we were disappointed in the outcome

of the compromise bill coming to a standstill,” said

Sahr.

2020 Legislative Session

After conversations ceased regarding the compromise

bill, our family of cooperatives and the IOUs worked

with Rep. David Anderson (R-Dist. 16) to introduce

House Bill 1262 as a middle-of-the-road approach

that would finally bring a higher degree of fairness to

the issue of municipal government taking of electric

service territories. While it wouldn’t stop a municipal

from growing into another utility’s territory, HB 1262

aimed to give South Dakota’s electric cooperatives

and IOUs a voice in the process.

Specifically, HB 1262 required adequate notice of

a municipality’s intention to take service territory

from an incumbent utility; required good faith

negotiations allowing the parties to work on a

territory agreement; in some circumstances, allowed

for a third-party, unappealable court review of the

municipal government taking, and preserved the

current compensation formula for utilities that lose

service territory. On Feb. 26, 2020, the South Dakota

House of Representatives passed House Bill 1262 by a

vote of 48-20.

14


Electric co-op employees and directors joined together in

Pierre for the annual Co-op Day at the Capitol, which was

held on February 18, 2020.

“The current statute gives the cities that right to elect

to serve territory that they’re annexing into the city.

This bill would alter that ever so slightly,” said Rep.

David Anderson on the floor of the House prior to the

vote on HB 1262. “The only time that (a city’s) decision

to serve, their election to serve, can be challenged is

if there has been fraud, or one party believes there

has been fraud, or they believe there has been abuse

of discretion. All this bill really is doing is providing a

little bit of due process.”

After the bill passed with a veto-proof majority in

the House, the state’s electric cooperatives were

optimistic in our ability to push it through the Senate,

with Sioux Falls Sen. Jack Kolbeck (R-Dist. 13) as its

prime sponsor. Unfortunately, the bill was directed to

the Senate Commerce and Energy Committee where

it faced opposition from some legislators. Knowing

that he didn’t have the votes to pass it out of the

committee, Sen. Kolbeck asked the committee to

table the bill, effectively killing the measure.

“While this isn’t the outcome that our electric

cooperative family had hoped for, we want to thank

everyone who supported us through this legislative

push,” said Sahr. “Our cooperative family joined

together as a unified front this legislative session and

we thank you for your advocacy.”

15


Dakota State University (DSU)

researchers assisted East River’s

team in setting up our smart

home project research space in

the DSU MadLabs facility.

Partnering for

INNOVATION

Innovation is one of East River’s guiding

values. Our employees are challenged to

think outside the box of current business

practices and explore new solutions that

will benefit our industry, always looking

through the lens of how those solutions

can enhance the value of our member

systems.

The successes of this approach are visible throughout

East River’s history, from launching one of the most

successful cooperative load management programs

in the country to serving as a driving force behind

growing our region’s ethanol industry and more.

16

Over the past year, East River entered into two

new partnerships that are exploring innovative

opportunities for our industry. The first partnership is

the Connected Home Research Project with Dakota

State University (DSU) that is exploring how utilities

can help consumers optimize their energy use through

next generation smart home technologies. The

second partnership is the Equitable Solar Deployment

with Electric Cooperatives research project led by the

University of Minnesota, East River and several of our

member systems.

Connected Home Research Project

The Connected Home Research Project officially

launched in October 2019 within DSU’s MadLabs


facility and is a partnership between East River on

behalf of our member systems, DSU and the National

Rural Electric Cooperative Association.

The partnership is exploring groundbreaking

technologies that will be included in the next

generation rural home and is also working to find

solutions that will allow electric cooperatives to play

an integral role in helping consumers optimize their

energy use.

home technology to optimize their energy usage while

allowing East River system operators to continue, and

possibly enhance, our load management program,”

said Studer. “We’re excited about the amount of

progress the researchers have made on the project

and are excited for the project’s next phase.”

“From wi-fi thermostats to smart appliances, our

network of electric cooperatives is seeing increased

adoption of smart home technologies among

consumers,” said Chief Member and Public Relations

Officer Chris Studer. “While current technologies can

help manage electricity usage and benefit consumers,

we noticed a gap between the capabilities of those

technologies and the needs of our utility network to

connect to those technologies. We hope to close that

gap through this project.”

DSU researchers began by investigating current

smart home technologies to learn more about their

capabilities. Unable to find an existing interface

that met the needs of East River’s evolving load

management program, the researchers began

developing hardware to connect multiple devices

in a prototype “home hub” device. They are also in

the early stages of developing a software system to

control those devices.

Much of the early research has involved simulations

and testing the hardware and software to figure out

what level of utility control is possible with different

devices.

“Our team at East River has kept in close contact with

the researchers to guide them down a path we believe

will help cooperative members who adopt connected

In collaboration with East River staff, researchers at Dakota

State University developed hardware like the prototype

above and software for a home hub designed to meet the

needs of East River’s evolving load management program.

In the next year, the researchers will continue refining

the home hub’s hardware and software. If all goes

well with that process, they will begin field testing

the interface in end consumer homes. The research

efforts are being led by teams of DSU undergraduate

and graduate students.

“The fact that East River is really, in a lot of ways,

leading a national effort to update and find new ways

to do things, I think really makes them an exciting

partner,” said Tom Halverson, computer science

professor at DSU who is leading the research team.

17


East River’s Board of Directors toured our Connected Home

Research Project space in 2019. The research space is housed

within the MadLabs facility at Dakota State University.


Organizational Innovation for Equitable

Solar Deployment with Electric

Cooperatives

A virtual kick-off workshop for the Organizational

Innovation for Equitable Solar Deployment with

Electric Cooperatives partnership was held April

7-9, 2020. The research project is being led by the

University of Minnesota, East River and several of

our member systems to study cross-subsidization of

solar. The collaboration was selected as one of only

four teams across the country in the area of solar in

rural communities.

Employees of East River, Renville-Sibley, Lyon-Lincoln,

Bon Homme Yankton, Sioux Valley Energy and Clay-

Union Electric joined other experts from national

laboratories, universities and other groups for the

kickoff workshop. The workshop’s intent was to set a

baseline of the project proposal, discuss the meaning

of equitable solar, explore models that may be used

to leverage a better understanding of our project and

determine areas where our technical experts need to

build new models for equitable solar deployment.

“The kickoff workshop was very productive, with

beneficial conversations and sharing of information

among the group’s members,” said Chief Financial

Officer Dustin Zubke. “Equitable solar deployment is

a pertinent topic for our industry and this research

project includes several crucial objectives that will

bring much value for all involved parties.”

The project includes three main phases with the

first including the development of an analytical

tool to understand how different solar deployment

organizational models shift costs and values in the

different tiers of the electric cooperative energy

delivery structure. The second phase will involve

developing an electric cooperative playbook for

capturing value from various solar deployment

models, including voluntary, member-driven and

shared solar. The third phase will include developing

two pilot organizational models for deploying solar,

selected from the playbook, that meet the goals of

East River, our power suppliers and our member

systems.

Former South Dakota Governor Dennis Daugaard (left),

U.S. Representative Dusty Johnson and Linda Daugaard

visited with East River Chief Member and Public Relations

Officer Chris Studer about the Connected Home Research

Project.

“We are looking forward to engaging with the

University of Minnesota researchers as well as the

other involved stakeholders through this project’s

phases,” said Zubke. “Many questions currently

surround the equitable deployment of solar and a

main goal of this project is to develop a path forward

that is fiscally responsible and in the best long-term

interests of our cooperative family.”

The project will span 15 to 18 months and will include

a detailed collaboration of numerous stakeholders

and technical experts from national laboratories and

other research institutions.

19


Adding Solar Power to Our

GENERATION MIX

East River will soon be adding solar

energy to our generation mix thanks

to a 128 megawatt (MW) solar energy

project that will be constructed near New

Underwood, S.D., that is projected to be

operational by 2022.

On Feb. 18, 2020, Geronimo Energy, a National Grid

company, and Basin Electric Power Cooperative

announced the execution of a power purchase

agreement for the Wild Springs Solar Project. The

announcement was made during a press conference

during Co-op Day at the Capitol in the South Dakota

State Capitol Rotunda in Pierre. The announcement

received widespread coverage across nearly 70 local,

regional and national media outlets including the

20

Wall Street Journal, MSN, and Yahoo Finance. Once

operational, Wild Springs will be the largest solar

project in South Dakota. It will be located about 20

miles east of Rapid City in the service area of West

River Electric Association, Inc., which is a distribution

electric cooperative member of Basin Electric.

“For the first time in its history, Basin Electric will buy

solar generation on a large scale to serve our members.

The board’s decision to add solar generation to our

resource portfolio is to continue with our all-of-theabove

strategy, as well as solar generation becoming

a more economic energy source. We are excited about

adding solar to our already diverse generation mix,”

said Paul Sukut, CEO and general manager of Basin

Electric Power Cooperative.


The Wild Springs project has been supported by

local and state community members and will bring

significant economic benefits to the local area.

Current estimations for the project’s economic

benefits total over $17 million throughout the first

20 years of operation, including positive impacts in

new tax revenue, construction jobs, new full-time

jobs, and charitable funds through the project’s

Education Fund. The Wild Springs Education Fund

alone will offer approximately $500,000 in donations

to the local school districts connected to the project

above and beyond all tax revenue and local spending

benefits.

“Historically, there has been a misconception that solar

in the northern regions of the United States wasn’t

feasible,” said David Reamer, president for Geronimo

Energy. “Both Geronimo and Basin Electric recognized

that the addition of solar to its overall generation fleet

not only offers customers a clean, economic option

for their electricity, but it also diversifies a utility’s

portfolio.”

On June 15, 2020, Basin Electric announced its

second solar energy project—the Cabin Creek Solar

Project with Clēnera Renewable Energy. When

complete, Cabin Creek will consist of two, 75 MW

projects in southeastern Montana. The project will

be located within the service area of Southeast

Electric Cooperative. Cabin Creek is expected to

bring significant economic benefits to the local area.

According to Clēnera, the project will contribute $8

million in property taxes and $5 million for the state

of Montana over 35 years. The company states it will

create approximately 300 construction jobs and two

to three full-time jobs.

“Our cooperative network is always looking to ensure

we have a mix of power resources to meet the needs

of our membership and renewable energy is an

important part of that strategy,” said General Manager

Tom Boyko. “These solar projects are important

strategic steps as we look to the future in continuing

our strong history of providing safe, affordable and

reliable power.”

A crowd of electric co-op employees and directors, media

representatives and other interested parties gathered for

the press conference that was held at the State Capitol in

Pierre to announce the Wild Springs Solar Project.

In 2019, nearly 38 percent of East River’s power supply

mix came from wind and hydropower generation. That

percent is projected to increase as new renewable

sources, including the Wild Springs and Cabin

Creek projects, are added to the mix. East River also

continued expanding our Renewable Energy Credit

(REC) program in 2019, with 13 member systems now

offering the program to their memberships and two

more looking at adding the program in the next year.

Through the REC program, local member-owners can

purchase RECs to offset their current energy usage

with 100 percent renewable energy and showcase

their support for current and future renewable

projects.

21


Transmission System

UPGRADE

PLAN

In 2020, East River marked the midway

point of our 2018-2021 construction

work plan. We are also now well into the

development and construction of many

of the projects that are outlined within

our Transmission System Upgrade Plan.

The upgrade plan, which will invest about $700

million over 10 to 12 years to accelerate additions

and replacements to our infrastructure, was originally

approved by East River’s board of directors in August

2018.

The plan’s approval came with the understanding that

it will be reassessed during each year’s budgeting

22

process and can be adapted as needed based on new

technologies, power supply costs, or other changes.

East River set the upgrade plan into motion at the

start of 2019 by submitting a RUS construction work

plan and receiving approval on the first four years

of work outlined within the upgrade plan. East River

also reorganized and expanded staff to carry out the

upgrade plan’s work while continuing to maintain the

current system.

“East River’s upgrade plan will provide for new load

growth, strengthen the backbone of our transmission

system, replace aging infrastructure that has passed

its useful life, meet the reliability expectations of

our membership, develop and implement optimized

planning and design criteria and increase the


deployment of technology across our system,” said

Chief Operations Officer Mark Hoffman. “The upgrade

plan will bring with it a more complicated and complex

system to construct, operate and maintain. These

changes are prompting East River to transition its

workforce to manage these changes in engineering,

construction and maintenance, and to partner with

outside consultants and contractors.”

East River is prioritizing Southwest Power Pool (SPP)

projects in the first years of the upgrade plan to

address reliability projects and limit the impact on

member rates. Main focus areas of the plan include

delivery point substation construction, moving the 115

kV deliveries further into the East River system and

rebuilding or adding to our backbone transmission

lines and system. These projects will improve the

reliability of the system and provide for future load

growth.

We continue to grow our relationships with and

within SPP. In response to East River’s requests to

include our local planning criteria in SPP studies, in

2020, SPP moved forward with the Holistic Integrated

Tariff Team (HITT) recommendation to change their

tariff to implement uniform zonal planning criteria. In

connection with this step, East River was successful

in promoting our zonal planning criteria to the Upper

Missouri Zone Coordination Group (UMZCG), a group

consisting of all transmission owners in the Upper

Missouri Zone (UMZ) of SPP. The UMZCG unanimously

approved the zonal planning criteria for the UMZ and

submitted those criteria to SPP. SPP has committed

to using the UMZ’s zonal planning criteria in the 2020

planning studies for development of 2021 projects.

“The UMZ is the first zone to implement zonal planning

criteria. These new criteria will be instrumental to

the further success of aligning the internal planning

criteria of our upgrade plan with the UMZ and SPP,”

said Hoffman. “The criteria will also help to gain SPP

exposure and approval for projects that are critical for

the reliability of East River’s system.”

“East River’s upgrade plan will provide for

new load growth, strengthen the backbone

of our transmission system, replace aging

infrastructure that has passed its useful

life, meet the reliability expectations of

our membership, develop and implement

expanded planning and design criteria and

increase the deployment of technology

across our system.”

Mark Hoffman

East River Chief Operations Officer

The following projects are some of the larger projects

currently being implemented as part of East River’s

upgrade plan. These and the plan’s other projects

focus on upgrading infrastructure, accommodating

load growth and meeting the higher reliability needs

of East River’s membership. Overall, the plan is

designed to energize the continued future success of

our cooperative family.

Sioux Falls 115 kV Conversion

East River recently completed the final phase of our

multi-year 115 kV conversion project on the west side

of Sioux Falls. A total of six substations serving Sioux

Valley Energy and Southeastern Electric are now

included in this upgraded system. The Chancellor

substation, the conversion project’s final substation,

was completed in the spring of 2020.

“The overarching conversion project in the Sioux Falls

area has included a series of smaller projects over

several years and has taken significant coordination

with Sioux Valley Energy and Southeastern Electric to

23


East River crews worked during summer 2020

on installing equipment at the Bryant substation.

The project is being completed to strengthen

the transmission system serving Codington-

Clark Electric and H-D Electric.


complete,” said Hoffman. “Thanks to the hard work of

our crews and the collaboration between the co-ops,

East River now has a 115 kV system around Sioux Falls

that is set up to serve future load growth.”

Wall Lake Substation

Construction on a new Wall Lake substation began in

the summer of 2020 and is projected to be completed

by the end of the year. Property for the substation

was purchased and grading was completed in 2011

as part of a series of land purchases preparing for

future Sioux Falls area growth. This substation is now

needed by Sioux Valley Energy and Southeastern

Electric to serve expanding loads around Sioux Falls

and Hartford and will also improve the reliability of

East River’s transmission system. This project is also

an important step to bring additional facilities into

SPP.

substation. This tie line is currently under construction

and will provide a secondary feed eliminating a 30-

mile radial line serving two East River substations.

When the tie line is complete, East River plans to

disconnect its Veblen and Hillhead substations from

Otter Tail Power’s transmission system and connect

Roberts County Area

In December 2019, WAPA finished construction on a

new 115/69 kV delivery point substation in Roberts

County. This new Roberts County substation provides

a new delivery source for Lake Region Electric,

Traverse Electric and Whetstone Valley Electric.

Along with this project, East River is constructing two

new tie lines that will connect the Roberts County

substation to East River’s transmission system. The

2-mile Roberts County to Sisseton line connects to the

East River system at the Sisseton substation and was

energized in December 2019. The construction of this

project was directed by SPP through a Notification to

Construct and provides a secondary delivery point to

our system in that area, eliminating a 40-mile radial

line serving five East River substations.

The second new tie line will be a 45-mile line stretching

from the Roberts County substation to our Britton

Apprentice Lineman James Wold joined other East River

crews to work on a stretch of transmission line between

Pukwana and Plankinton. The project is part of a series to

rebuild one of East River’s backbone transmission lines.

those substations to East River’s transmission system,

a move that will bring greater control of the level of

service. As part of the project, East River upgraded

the Veblen substation for the voltage change and

rebuilt the 1969 vintage Hillhead substation.

Yankton Area Improvements

Several projects are planned in the Yankton area to

improve service for Bon Homme Yankton Electric.

The new 115/69 kV Lancer substation is planned for

completion in the summer of 2020 and is needed

to address load growth and reliability needs in the

Yankton area. In 2021, East River is also planning a new

25


East River crews worked on installing equipment

at the Bryant substation. The substation is part of

several key projects that will increase reliability

to Codington-Clark Electric and H-D Electric.

115 kV interconnection with NorthWestern Energy at

their NAPA Junction substation with a three-mile 115

kV tie line between the Lancer substation and NAPA

Junction. The line will be routed through East River’s

existing Yankton substation, which will be converted

from 69 kV to 115 kV to better serve the area’s growing

loads. In the summer of 2020, East River will modify

8 miles of line to build the existing facilities into the

Lancer substation and rebuild 3.5 miles of older line

along our Tabor tap to improve reliability to the area’s

loads.

Willow Lake to Bryant Tie Line

A planned 24-mile, 69 kV tie line will provide a twoway

transition feed between East River’s Willow Lake

and Bryant substations. This project will strengthen

26

East River’s transmission system in the Codington-

Clark Electric and H-D Electric service areas, increase

reliability and provide a backup power source between

the two substations that are currently served from

radial transmission lines. The project is planned for

completion in 2020. In future years, East River plans

to rebuild the Willow Lake tap, Hayti tap and the

Castlewood tap. When those projects are complete,

East River will have a new transmission line, all less

than 10 years old, between WAPA’s Carpenter and

Watertown substations.

Pukwana to Plankinton Tie Line

In 2020, East River plans to rebuild a section of 69 kV

transmission line between Pukwana and Plankinton

due to the age and condition of the current line


serving Central Electric. When complete, the new

line will improve the capacity and reliability to the

area’s loads. It is part of a series of planned projects

that stretch from the WAPA Sioux Falls substation

to VT Hanlon to WAPA Mt. Vernon on to Pukwana.

This series of projects will rebuild one of East River’s

original backbone transmission lines.

Oahe Electric. When the project is complete, East River

will retire our facilities in the WAPA Pierre substation

and our line between the Pierre and Hughes County

substations. In future years, we also plan to rebuild

the Sully Buttes 230/69 kV substation.

Pierre Area Projects

East River is working to complete a series of projects

that connect our Sully Buttes substation to the WAPA

Pierre substation to strengthen the transmission

system serving Oahe Electric. At the end of 2019, crews

completed a new 17-mile tie line between the Pierre

and Grey Goose substations. This tie line provides a

second transmission feed to the Grey Goose substation

and serves as a backup line between the WAPA Pierre

and Sully Buttes delivery point substations. East River

also recently rebuilt a 3.5-mile section of line leading

to the Buckeye substation as well as a rebuild of the

Logan substation. In addition, crews completed a

capacitor bank addition to the Onida substation that

will support the area’s load growth.

In 2020, East River will begin constructing a new

115/69 kV Hughes County substation with completion

planned in summer 2021. This will be a joint project

between East River, WAPA and the city of Pierre to

improve reliability of the area’s transmission system.

The Hughes County substation will be constructed

near the intersection of Range Road and Highway

1804, which is also the takeoff location of the newly

constructed Pierre to Grey Goose tie line. This project

will include routing WAPA’s 115 kV line into the Hughes

County substation and interconnecting the city of

Pierre’s 115 kV line. The city will take future service

from the new substation and East River will have two

69 kV transmission lines between the Hughes County

substation and the Sully Buttes substation serving

Journeyman Lineman Eric Nesheim, along with other East

River crews, worked on East River’s Bryant substation

project.

Big Stone to Blair

East River is working on a rebuild of our transmission

network serving Whetstone Valley Electric from our

F.L. Blair substation. The F.L. Blair substation was

rebuilt in 2019 and, as part of the project, East River

built a new 69 kV bay to separate H-D Electric and

Whetstone Valley Electric loads coming from the

substation. East River will build a new tie line from

the F.L. Blair substation that will tie to a series of 44

miles of line rebuilds from our Moritz substation to

the Big Stone substation. A portion of this line will

be rebuilt due to the South Dakota Department of

Transportation Highway 15 reconstruction project. This

line is currently under construction with completion

planned for 2021-2022.

27


East River crews aided in the relief efforts of the

2019 Madison flood. East River also provided

equipment to the recovery efforts.

Recovering from

SEVERE

WEATHER

East River’s employees are always at

the ready to repair damages and restore

power after severe weather. Apart from

frigid temperatures, the past winter

was mild, with minimal weather-related

impacts to East River’s system.

The most severe weather event to impact our region

within the past year happened in September 2019,

bringing three tornados in Sioux Falls and heavy rains

throughout southeastern South Dakota.

East River’s system performed well through the

September storm, experiencing just a few momentary

breaker operations. While the tornadoes caused

extensive damage in parts of Sioux Falls, our crews

inspected East River’s facilities in the area and didn’t

find any significant damages.

Sioux Valley Energy and Southeastern Electric both

reported only a few minor outages related to the high

winds and tree damage. Overall, East River was very

fortunate to not have more impacts from the storm.

28


“East River’s system performed well through the

storm,” said Chief Operations Officer Mark Hoffman.

“The ability of our system to withstand such extreme

weather comes from the hard work of our employees

in maintaining the equipment as well as from the

investments that have been made in the system by

our member cooperatives.”

The September storm’s heavy rain brought massive

flooding to Madison and Lake County. Luckily, East

River’s facilities weren’t impacted by the flood.

East River provided support to the greater Madison

community through equipment and volunteer

assistance, even helping to evacuate and rescue

residents from their homes.

Six of our employees aided in the relief efforts

through their roles in the Madison Fire Department.

East River also provided equipment to the recovery

efforts including a snowcat, payloader, semi, low boy

trailer and a flat bottom boat.

“A big thanks to all of our employees who helped out

the city during that time of need,” said Hoffman. “As

a Madison community partner, we were thankful to be

able to help out by providing equipment and other

assistance.”

Severe weather also swept across our service area in

June 2020, causing momentary blinks, damages and

outages on East River’s system. In total, the storms

impacted 84 of East River’s structures. The most

severe damage from the summer storms occurred on

June 4 along a stretch of line between WAPA’s Groton

substation and East River’s Ordway substation. A

3-mile stretch of line along that path was damaged,

with 52 total structures and one substation impacted.

East River crews worked to remove and replace a pole that

caught on fire after a summer storm rolled through the

Yankton area in June 2020.

29


Focusing on

WORKFORCE

HEALTH & SAFETY

A top priority of East River is fostering

a culture of safety leadership within our

workforce. Our safety culture isn’t built

from the top down. Rather, it’s built by

each employee taking ownership of their

responsibility as a safety leader.

By taking a safety-first approach to work, our

employees are protecting themselves and their

coworkers from the impacts of workplace accidents.

No matter the task or the workload, safety must

always come first in our industry.

30

Focus Committee

East River’s Focus Committee continued our internal

Focus on Safety campaign in 2020. 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 every employee is

a safety leader.

“Fostering a culture of workplace safety leadership is

an important part of minimizing workplace accidents

and near misses. Distraction tends to be a large

contributing factor to workplace accidents and a big

part of this campaign involves reminding employees


to focus completely on each task at hand,” said Safety

and Health Professional Nick Reiff.

The Focus Committee also continued using Worklete

in 2020, which is a program that teaches participants

to work like an athlete and use the strongest

body position through every task. Worklete was

implemented at East River in 2019 to reverse a trend

that the Focus Committee noticed of increasing

musculoskeletal injuries related to weak body position.

Also in 2020, the Focus Committee completed a

review of East River’s safety manual. The committee’s

members split into teams to complete the review

process, which focused on ensuring the manual

was up-to-date and not lacking any crucial safety

information.

External Safety Campaigns

East River’s farm safety public awareness campaign

continued in 2020. The campaign reminds farmers to

remain aware of electrical equipment when working

on the farm and teaches them the steps to take if their

equipment contacts a power line.

Also this year, we released a video as part of the

campaign that tells the story of Grant McCann, a

farmer who was killed in Bon Homme Yankton’s

service territory in an accident involving a sprayer and

power lines. The video has received a lot of traction so

far, with the link on our Vimeo account viewed more

than 2,300 times and posts featuring the video on

Bon Homme Yankton’s Facebook page shared more

than 265 times.

An article featuring Grant’s story that ran in Co-op

Connections magazine also received a lot of attention.

NorthWestern Energy and South Dakota Farmers

Union both contacted East River about the article and

reprinted it in their customer newsletters and other

organizations have printed the article or shared the

video with their members or customers.

“Fostering a culture of workplace safety

leadership is an important part of minimizing

workplace accidents and near misses.

Distraction tends to be a large contributing

factor to workplace accidents and a big part of

this campaign involves reminding employees

to focus completely on each task at hand.”

Nick Reiff

East River Safety and Health Professional

Similar to the uptick in farming accidents that our

cooperative family noticed back in 2016 that spurred

the creation of our farm safety campaign, we noticed a

similar recent trend within the contractor community.

Contractors working near our power lines are more

frequently contacting our infrastructure, aren’t

reaching out to the electric co-op in advance of

working near power lines and also often don’t know

what steps to take after their equipment contacts

a power line. In response to this trend, East River’s

Member Services team developed a contractor safety

awareness campaign in collaboration with the Focus

Committee and our Marketing and Communications

Committee.

“Our external safety campaigns are designed to

ensure that anyone who is working near our power

lines, whether a contractor or a farmer, is taking

the proper steps to stay safe,” said Marketing and

Communications Manager Shayla Ebsen. “We are

working closely with our member systems to release

these important messages to both the contractor and

farming communities.”

31


East River crews worked during summer 2020

on installing new transmission lines between

Spencer and Hanlon.


Wellness Committee

East River’s Wellness Committee is a voluntary

group of employees that come together to promote

workforce health and wellness through annual events

and programs. One of the past year’s most popular

challenges was Project Zero which the committee

hosted to help employees avoid weight gain over the

holidays. Employees joined together in groups and

submitted weekly weigh-ins with the goal of either

maintaining their weight or losing weight through the

challenge.

“Participating in the challenges that the Wellness

Committee puts on has been so motivating,” said

Kenny Clements, Madison maintenance foreman.

“The challenges keep you aware and help you make

healthier choices. It is fun to have some friendly

competition and the challenges bring comradery

with the teams. I appreciate all the time and effort

the committee puts in to provide healthy activities for

East River’s employees.”

When COVID-19 social distancing recommendations

took hold in spring 2020, the Wellness Committee

stepped in with fun ways for employees to remain

focused on their wellness. The committee launched

a steps challenge that encouraged employees to

stay active, especially when working from home.

Employees signed up for the challenge as teams

and their steps were calculated using wearable

devices. The challenge lasted for 40 days and over

50 employees participated. At the end of the steps

challenge, East River employees had walked nearly 20

million steps.

“While doing the steps challenge, I was more intentional

about getting movement in during my workday. Being

part of a team keeps me motivated because I don’t

want to let anyone down,” said Clements.

A water challenge during the summer encouraged

employees to stay hydrated. The committee also

launched a virtual wellness community to connect

employees and provide daily movement reminders.

“Participating in the challenges that the

Wellness Committee puts on has been so

motivating. The challenges keep you aware

and help you make healthier choices.

I appreciate all the time and effort the

committee puts in to provide healthy activities

for East River’s employees.”

Kenny Clements

East River Madison Maintenance Foreman

Employees are using the community to share healthy

recipes, links to workouts, wellness articles and other

encouraging comments. Quarterly lunch and learn

events that were previously held in person were moved

to a virtual setting through the pandemic, allowing

employees to participate from their individual office

spaces.

“I joined the Wellness Committee because I know

that healthy habits are a crucial part to everyone

performing their best on the job. Healthy employees

equal fewer injuries and sick days needed and the

committee adds some fun and encouragement to

keep up healthy habits,” said Anne Hall, Wellness

Committee member. “The best part about being part

of the Wellness Committee is that by thinking of

challenges and new ways to keep employees healthy,

I also do better at applying those healthy habits to my

own lifestyle and the health of my family.”

33


MEETING

MEMBER

NEEDS

East River offers a suite of federated

services to our membership that are

designed to uphold our mission of

enhancing the value of our member

systems.

From providing advertising and communications

packages to offering IT and cyber security assistance,

employees across East River work hard to support and

complement the efforts of our member systems. Over

the past few years, at the request of our membership,

we’ve launched new service-sharing opportunities

and expanded several existing member support

programs.

34

“East River’s federated services are designed to ease

the pressure that our member systems face in today’s

fast-paced environment,” said General Manager Tom

Boyko. “Our employees are dedicated to helping the

membership fulfill their business needs and minimize

costs.”

Cyber and IT Services Program

East River’s Cyber and IT services program is now in its

third year and 11 member systems are enrolled in the

program. 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 participating


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.

Among other benefits, the program has saved the

enrolled co-ops the expense of hiring an IT specialist

or contracting with multiple outside companies to

provide IT and cyber security support. The program’s

value was even more heightened during the COVID-19

pandemic, when many of East River’s member systems

transitioned employees to work remotely. Whetstone

Valley Electric is enrolled in the program and General

Manager Dave Page said the services provided by

East River’s team eased the transition of their staff

working from home during the pandemic.

“It has been great to partner with East River for our

IT and cyber services, especially during the COVID-19

pandemic. Within a few short hours of our request, the

team met the challenge to enable our entire workforce

to work from home if needed,” said Page. “To have a

qualified team of professionals to call on for all of our

IT and cyber services needs is a real advantage for a

small co-op. The services they provide in the rapidly

changing world of IT and cybersecurity is an excellent

value to our members.”

Digital Services Program

East River’s Member Services division is energizing

the digital future of our cooperative family through a

new digital services program. A well-rounded online

presence is essential for communicating with all coop

member-owners, but especially the young adults

who will soon make up the bulk of our membership.

“Our membership is getting more tech savvy every

year. Their expectations are changing, and they

want everything available to them online,” said

Matt Klein, general manager from Union County

Electric Cooperative. “Rather than having to come

to the office, our members are first looking for the

information they seek online. Further, this is a very

affordable way to reach and engage with our current

and future members.”

East River’s Member Services division launched the

digital services program in 2019. The program includes

website and social media management assistance as

well as website auditing. East River’s team works with

the local cooperative on social media content posting

calendars with an end goal of saving the local co-op

time on maintaining a social media presence. The

local cooperative maintains control of the page to

post local content including outages, office closures,

events and employee anniversaries.

“After a bad storm, I realized that other cooperatives

were using their Facebook pages to keep members

up to date with what the crews were accomplishing

and the working conditions they were dealing with.

I felt this was something that I wanted to offer, but

being a small co-op, we did not have anyone that

could be dedicated to setting up or monitoring a

Facebook page,” said Jay Spaans, general manager

of Douglas Electric Cooperative. “When I heard that

East River would help us out, it was an easy decision

for us to take the leap and launch a page. If it hadn’t

been for East River’s help, we probably still wouldn’t

have a Facebook page.”

The website auditing service includes a review of

the local co-op’s website by East River’s team to

find outdated or missing information, broken links as

well as to provide content recommendations, design

suggestions and more. The audit also includes the We

Own It Minnesota report card checklist.

35


Sioux Valley Energy Key Account and Community

Relations Executive Jay Buchholz spoke about

the success of Sioux Valley’s REC program

during a breakout session at the national NEXT

conference in 2020.

“The audit really helped me see areas on our website

that were no longer pertinent and identify areas

that we really needed to promote more,” said Klein.

“We’ve slowly been working to address these issues

and will look to do a redesign, giving our website a

more modern feel, after we have the content updated.

The website audit laid the foundation to start working

towards this goal.”

Rebates Program

For more than 30 years, East River’s rebates program

has been serving as a crucial member-owner

touchpoint for our member systems. Through our

rebates program, member co-ops can effectively

promote energy efficiency, increase participation in

our load management program, and continue building

positive relationships with their member-owners.

In 2020, East River’s Communications and Marketing

Committee conducted an audit of all current rebate

and incentive programs using the Ratepayer Impact

Measurement (RIM) Test. The review process led to

changes and additions to the programs.

“With the help of a great team of East River employees,

the Communications and Marketing Committee

utilized the Ratepayer Impact Measurement test to

decide which rebates were economically feasible,” said

Russell Gall, general manager of Charles Mix Electric

and the committee’s chair. “The recommendations

were accepted, and adjustments were made to the

36


programs to put funding to work in the most effective

manner. I think the manager group appreciated the

efforts of everyone involved in that effort.”

Based on the outcome of the RIM testing process,

effective December 31, 2019, the residential LED

lighting rebate and the residential Energy Star®

appliance rebates were discontinued. A new rebate

for third-party grain dryer controls was approved to

begin January 1, 2020. Northern Electric was one of

the first co-ops to implement the third-party grain

dryer rebate.

those members to support renewable energy. 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.

“Members want choices and control, and this device

allows for both,” said Russel Ulmer, Northern Electric’s

manager of member services. “Members’ grain drying

and handling facilities continue to grow and we have

been able to minimize the impact of the added load

on the electrical system by managing it correctly.”

Renewable Energy Credit Program

East River’s Renewable Energy Credit (REC) program

entered its fourth year in 2020 and 13 of our member

systems are now offering the program to their

member-owners, with two more planning to launch

the program soon.

Each year, East River’s members are allotted

renewable energy credits from Basin’s wind purchases

and owned projects based on each co-op’s usage.

Each megawatt-hour of electricity generated from

a renewable source equals one renewable energy

credit. Prior to the REC program, the RECs allotted to

the member systems were sold on the market and the

funds were distributed amongst our member systems.

As an alternate option, East River created this

highly-customizable renewable program through

which each local co-op can sell their allotted RECs

to their member-owners and satisfy the desire of

In 2020, East River launched a new rebate for third-party

grain bin dryer controls.

Sioux Valley Energy was one of the first East River

member systems to begin offering the program. Sioux

Valley Energy Key Account and Community Relations

Executive Jay Buchholz spoke about the success of

Sioux Valley’s REC program during a breakout session

at the national Touchstone Energy New and Emerging

Technologies conference in 2020.

Glanbia Nutritionals, a Sioux Valley commercial

member, recently signed on to the program as a way

to satisfy their renewable energy goals. The program

allowed the plant to become Glanbia’s first location to

be powered by 100% renewable energy and the Sioux

Falls plant is now using the program’s badge on its

ingredient packaging.

37


Hosting the

2019 LINE

PATROL

CHARITY

RIDE

Each year, the Line Patrol Charity

Ride brings together past and present

cooperative employees and directors

along with suppliers and vendors for

a fundraiser that benefits the SDRE

Accident Victims Fund.

In 2019, East River hosted the 17th annual Line Patrol

Charity Ride in Madison. The event took place Sept.

6-7, with 41 motorcycles, 60 vehicles and more than

240 people taking part in the festivities. Employees

from across East River’s workforce joined together,

split into subcommittees, and began planning for

the event a year in advance. The logistics committee

secured a venue, lodging, transportation and meals.

The communications committee designed the charity

ride t-shirt, flyers, signage and promoted the event.

The ride committee selected a route and stopping

points, contacted authorities for road closures and

38

traffic control and prepared the ride’s game. East

River’s volunteers worked with both the Line Patrol

Inc. committee and a team at the South Dakota

Rural Electric Association (SDREA) to coordinate the

charity event. SDREA provided online registration,

t-shirt sales and event promotion.

“It was wonderful to see the East River employee group

come together to plan this event with SDREA and the

Line Patrol Inc. Committee,” said Kelsey Stone, former

East River’s executive support specialist and member

of the planning committee. “The heart behind this

event truly captures the idea of cooperative family.

It was wonderful to see cooperative employees and

families from across the state support the cause,

and the immense support of all the sponsors was

amazing.”

The event began with an evening gathering at

the Madison Country Club. Attendees enjoyed a


meal prepared and sponsored by Irby along with

entertainment from local band RBF sponsored by

Altec. Rain greeted attendees on the morning of

the ride but didn’t hinder the day’s excitement. The

day began with tours of East River’s main campus

and a breakfast sponsored by Dakota Supply Group.

Organizers modified the day’s ride route so that

lunch could be served by Border States indoors at

Southeastern Electric’s new outpost in Salem instead

of outdoors at Lake Vermillion State Park as originally

planned. The route led the bikes and cars through the

service areas of Sioux Valley Energy and Southeastern

Electric as well as along the lakes surrounding Madison

and past a few East River substations.

The fundraiser culminated with an evening event that

included a meal sponsored by East River and served

by a local Madison restaurant, the Prime Time Tavern,

at the Madison Country Club. The evening ended with

both live and silent auctions during which items that

were donated by employees were awarded to top

bidders. All money raised was donated to the SDRE

Accident Victims Fund. In addition to hosting the

2019 event, East River’s employees donated $12,000

to Line Patrol, Inc.

“Each year we gather as a community of fellow rural

electric co-ops to donate time, talent and treasure to

help our fellow employees and families who have been

affected by hardships,” said Merl Bechen, East River

Mitchell area maintenance foreman. “The Charity Ride

is the exciting final product of a lot of planning that

allows each co-op to showcase their community and

their special talents.”

Line Patrol Inc. launched in 2003 by a small group of

co-op employees to provide financial help to South

Dakota electric cooperative employees during times

of need. Since its inception, the fund has donated

$423,700 to 207 recipients. $23,000 has been

donated so far in 2020 to cooperative families in need.

“Line Patrol Inc. would not exist without the

extraordinary support of the cooperatives we serve,”

said Roger Lawien, director of member services and

IT at Moreau-Grand Electric Co-op and a member

of the Line Patrol Inc. committee. “The relationships

East River hosted the 17th annual Line Patrol Charity

Ride in September 2019. Along with the ride that took

participants on scenic routes throughout our service area,

East River also hosted evening events at the Madison

Country Club.

and support from South Dakota Rural Electric

Association, Basin Electric Power Cooperative, East

River Electric Power Cooperative, Rushmore Electric

Power Cooperative, our suppliers, and, most of all, the

South Dakota rural electric employees that run this

charity each year, are greatly appreciated.”

Line Patrol Inc. is recognized by the South Dakota

Secretary of State and the Internal Revenue Service

as an independent corporation as a 501(c)(3) charity.

The Line Patrol Inc. committee is comprised of three

directors that serve alternating three-year terms,

take no salary or compensation and must be fulltime

employees of a South Dakota rural electric

cooperative.

39


Now former REED Fund Chair Ken Schlimgen

(left), Avera Health President and CEO Bob

Sutton and East River General Manager Tom

Boyko spoke during a press conference to

announce Avera’s investment into REED’s

workforce housing development financing

initiative.

Fostering

BUSINESS

DEVELOPMENT

The Rural Electric Economic Development

(REED) Fund is a nonprofit corporation

created and governed by 26 member

electric cooperatives.

REED partners with commercial and other economic

development lenders to provide financing and

leverage private investment in more than 69 counties

throughout South Dakota and Minnesota.

REED assists projects that promote community wellbeing

and contribute to employment, business and

wealth creation, as well as improve the infrastructure,

services and economic base. REED had another

strong year in 2019, issuing 18 loans for $12.8 million.

Since 1996 the REED Fund has invested more than

$100 million in the region through more than 343 loans.

The REED Fund and partner lenders have combined

to distribute more than $873 million in economic

investment, 9,435 jobs have been impacted, and 2.27

million square feet of facilities have been constructed

or renovated, mostly by non-profit development

corporations committed to helping the region grow.

40


Workforce Housing Development Financing

Initiative

Housing shortages are hampering growth in towns

of all sizes across South Dakota. Businesses in

communities without decent housing options face

especially difficult challenges in recruiting and

retaining workers.

“All business sectors including health care and electric

cooperatives in rural areas are looking for highlyskilled

staff,” said General Manager Tom Boyko. “It

can be a real challenge to recruit workforce without

quality housing options. We’re working to solve this

critical issue.”

Past and current REED Fund loan projects have

assisted housing projects in several communities in

South Dakota and Minnesota, and more projects are

in the works. In addition, over the past year, the REED

Fund launched a new initiative to specifically address

the growing housing shortage. The initiative began

with an initial $4 million in loan funds that REED

dedicated specifically to housing development, with

a goal of raising an additional $6 million in outside

investments.

REED’s housing loans assist private and nonprofit

developers who build multi-family apartment

complexes and single-family homes for sale or rent;

and are not made to individual homeowners. As a

nonprofit operation, the REED Fund can offer loans

with attractive rates with the objective of spurring

economic development.

“REED’s member electric cooperatives are excited

to launch this housing development initiative and

cultivate partnerships for the initiative with other

regional entities,” said Ken Schlimgen, general

manager of Central Electric and the former REED

Board President. “We want to assist communities in

developing housing that meets the needs of today’s

workforce. This initiative will help this region begin

to address the urgent need for quality workforce

“We’re all in this together. All of these

organizations share similar footprints and we

all have the same common goal of trying to

work on this problem.”

Mike Jaspers

East River Business Development Director

housing.”

The first outside investment into the initiative

came from Avera Health and was announced at a

press conference on September 3, 2019. Avera has

committed $2 million, with funds from the partnership

to be used for lending in partnership with banks

and other agencies to provide loans for housing

development and housing infrastructure in Averaserved

communities.

In June 2020, SDN Communications and its 17

member companies across South Dakota also joined

the partnership. SDN has pledged to invest $1 million,

contributing $250,000 per year for four years in

the project. The company recently made its initial

investment. First Bank and Trust joined as a third

partner, also in June 2020, pledging $1.1 million to the

effort.

“It’s great to have investors like Avera, SDN, First Bank

and Trust and hopefully others in the near future,”

said Mike Jaspers, East River business development

director and administrator of the REED Fund. “We’re

all in this together. All of these organizations share

41


SDN Communications Board Chair Denny Law

(left) presents a check to East River General

Manager Tom Boyko for SDN’s investment in the

REED workforce housing initiative.


similar footprints and we all have the same common

goal of trying to work on this problem.”

Local Livestock Development

Over the past year, East River continued expanding

its business development efforts alongside the

REED Fund. Following our 2018 regional livestock

development summit that our cooperative network

held in Brookings on the campus of South Dakota

State University, we expanded our partnerships with

other ag associations into 2020 to host local livestock

seminars throughout our service area.

ag associations to resume these local seminars,”

said Jaspers. “Our region’s ag producers have been

hit hard over the past several years. These seminars

are designed to help provide producers with the

information they need to pursue diversification and

build enhanced resilience in their operations.”

The local seminars are targeted at producers who are

thinking of building a livestock facility or expanding an

existing facility and are structured to provide answers

and ideas for producers, ag lenders, ag insurance

agents and others involved in agriculture.

In partnership with Ag United, we hosted the first

local seminar in March 2019 at East River’s main

campus in Madison. The seminar was attended by

more than 50 farmers and industry representatives.

Similar meetings were held in July 2019 at Lake Area

Tech in Watertown and the Agtegra Innovation Center

in Aberdeen.

A Mitchell area livestock information meeting that

was scheduled to be held in March 2020 at Mitchell

Technical College was postponed due to the

COVID-19 pandemic. Before it was postponed, the

meeting garnered significant interest with more than

150 registrants and spurred discussion and interest

on holding an additional meeting in southeast South

Dakota. We’ll be working with Mitchell Technical

College on rescheduling the event when it’s safe to

do so.

“After the pandemic is behind us, we are looking

forward to continuing our partnerships with other

East River, in collaboration with several ag associations,

hosted a series of livestock development seminars in

2019. We plan to resume the seminars after the COVID-19

pandemic passes.

Producers who have shown the most interest in

the local seminars are those who feel they need to

diversify and add cash flow to their operations and

those who wish to convert existing feeding facilities to

more environmentally-friendly facilities and facilities

that improve animal health and efficiency.

Co-sponsorship of these events has grown to include

Ag United, the SD Soybean Research and Promotion

Council, Agtegra Cooperative, Dakotaland Feeds, LLC

and the SD Pork Producers Council.

43


EAST RIVER

BOARD OF

DIRECTORS

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. 2020 marked Ervin Fink’s

20th year on East River’s board of directors.

James Ryken, President

Clay-Union Electric

Pat Homan, Vice President

Traverse Electric

Ervin Fink, Secretary

Douglas Electric

Bert Rogness, Treasurer

H-D Electric

John Ostraat

Southeastern Electric

44

Deb McCreary

City of Elk Point

Alan ‘Whitey’ Hinderman

Renville-Sibley Cooperative

Power

Duane Wolbrink

Central Electric


Ron Samuelson

Charles Mix Electric

Alan Vedvei

Kingsbury Electric

Kermit Pearson

Lake Region Electric

Darren Strasser

Whetstone Valley Electric

David Allen

Dakota Energy

Gary Bachman

FEM Electric

Galen Grant

Lyon-Lincoln Electric

Mark Sumption

Northern Electric

Ken Gillaspie

Oahe Electric

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

45


EAST RIVER

MEMBER

SYSTEMS

46

Member Systems

Consumer

Accounts

Miles

of Line

Peak Demand

(MW)

kWh Sales

1 Agralite 5,251 2,431 41.8 238,558,633

2 Bon Homme Yankton 3,868 1,298 21.5 94,329,901

3 Central 7,199 4,476 68.3 349,412,740

4 Charles Mix 2,550 1,311 12.6 65,653,568

5 City of Elk Point 1,000 16 3.8 18,286,808

6 Clay-Union 3,448 1,171 15.5 77,226,316

7 Codington-Clark 3,364 1,905 27.0 131,797,209

8 Dakota Energy 3,587 2,530 43.3 238,338,671

9 Douglas 814 501 6.4 25,544,796

10 FEM 2,081 2,045 26.3 172,615,725

11 H-D 3,643 1,586 23.7 105,776,611

12 Kingsbury 1,090 675 6.8 26,158,879

13 Lake Region 3,471 1,665 35.6 191,900,865

14 Lyon-Lincoln 3,916 1,668 22.2 98,549,310

15 Meeker 9,061 1,944 28.1 201,757,216

16 Northern 6,417 2,510 62.2 308,201,670

17 Oahe 3,181 1,203 24.3 125,688,949

18 Redwood 4,452 1,326 25.8 134,801,669

19 Renville-Sibley 1,887 1,038 34.4 163,161,214

20 Sioux Valley Energy 26,393 6,070 156.2 849,285,373

21 South Central 5,843 2,462 45.9 226,972,926

22 Southeastern 18,781 4,377 121.9 646,988,967

23 Traverse 3,095 1,714 23.1 115,297,896

24 Union County 1,649 512 7.2 32,372,894

25 Whetstone Valley 3,367 1,474 22.6 100,169,592

TOTAL 129,408 47,908 4,738,848,398

*Partial requirements member

*

*

*

*



EAST RIVER

2019 FINANCIALS

BALANCE SHEET

ASSETS AND OTHER DEBITS

DECEMBER 31 2019 2018

Utility Plant

Electric Plant in Service 461,297,008 418,102,044

Construction Work in Progress 40,525,351 38,094,234

Total Utility Plant 501,822,359 456,196,278

Less Depreciation 121,516,428 114,137,250

Net Utility Plant 380,305,931 342,059,028

Investments and Other Property

Non-Utility Property 260 962

Investments in Associated Organizations 150,954,720 148,149,277

Other Investments 988,148 990,077

Special Funds 4,663,486 5,412,967

Total Investments & Other Property 156,606,614 154,553,283

Current Assets

Cash: General Operating Funds 4,914,116 4,409,067

Accounts Receivable: Members 24,223,695 23,509,125

Accounts Receivable: Others 5,564,410 4,166,843

Materials & Supplies 13,310,334 12,403,454

Prepayments & Total Current Assets 1,044,225 894,264

48

Total Current Assets 49,056,780 45,382,753

Deferred Debits 6,354,908 6,336,035

Total Assets & Other Debits 592,324,233 548,331,099


BALANCE SHEET

LIABILITIES AND OTHER CREDITS

DECEMBER 31 2019 2018

Equities

Membership Fees 2,500 2,500

Appropriated Margins 4,450,000 4,450,000

Patronage 215,054,353 205,124,467

Total Member and Patron Equities 219,506,853 209,576,967

Long Term Debt

RUS Mortgage Notes - 6,848

Cooperative Finance Corporation Notes 4,696,622 6,150,458

Federal Financing Bank 247,949,994 213,340,320

CoBank 53,726,437 57,068,517

Capital Lease Obligations 934,932 -

Less Advance Payments 12,109,047 11,523,630

Total Long Term Debt 295,198,938 265,042,513

Noncurrent Liabilities 1,254,234 1,179,875

Line of Credit 33,000,000 30,500,000

Current Liabilities

Accounts Payable 33,775,031 31,894,009

Accrued Liabilities 3,924,570 3,781,355

Other Current Liabilities 1,001,121 919,976

Total Current Liabilities 38,700,722 36,595,340

Deferred Credits 4,663,486 5,436,404

Total Liabilities and Other Credits 592,324,233 548,331,099

49


EAST RIVER

2019 FINANCIALS

OPERATING STATEMENT

DECEMBER 31 2019 2018

Operating Revenues

Sales to Members 260,641,938 260,905,810

Other Electric Revenue 23,767,645 22,181,134

Total Revenues 284,409,583 283,086,944

Operating Expenses

Purchased Power 229,265,460 230,526,722

Operations and Maintenance 17,087,767 15,590,946

Administrative and General 9,481,575 9,576,816

Interest 11,475,479 10,140,759

Depreciation 10,669,214 9,338,475

Other Operating Expenses 145,345 81,410

Total Operating Expenses 278,124,840 275,255,128

Operating Margin 6,284,743 7,831,816

G&T and Other Capital Credits 8,182,005 31,326,983

Non-operating Margins 995,264 612,383

Net Margins 15,462,012 39,771,182

50


2019 REVENUES

Sales to members

Other operating revenues

92%

8%

2019 EXPENSES

Purchased power

Operations and maintenance

Interest

Administrative and general

Depreciation

3.4% 3.8%

4.2%

6.2%

PEAK LOADS (MW)

Winter Peak

Summer Peak

82.4%

AVERAGE WHOLESALE

RATES (mills per kWh)

TOTAL UTILITY PLANT

VALUE (millions)

ENERGY SALES

(millions of MWh)


EAST RIVER

SENIOR STAFF

East River’s senior leaders guide our workforce to fulfill our cooperative’s

mission and in achieving the objectives of our strategic plan. In 2020, Chief

Information Officer Dr. Pat Engebretson left his role at East River to return

to Dakota State University. At the time of this annual report printing, East

River was conducting a search for a new CIO.

Tom Boyko

General Manager

Bob Sahr

General Counsel

Dustin Zubke

Chief Financial Officer

Mark Hoffman

Chief Operations Officer

Chris Studer

Chief Member and Public

Relations Officer

Mike Jaspers

Business Development Director



EAST RIVER ELECTRIC

POWER COOPERATIVE, INC.

PO Box 227

211 South Harth Ave.

Madison, SD 57042-0227

WWW.EASTRIVER.COOP

More magazines by this user
Similar magazines