CEO Column // October 2022

Good afternoon NIECI!

I have been running to a lot of meetings this month.  The Minnesota Rural Electric Association held the CEO conference one week prior to Great River Energy strategic planning.  Next week I am heading down to GRE in Maple Grove for my monthly Member Managers Meeting.  My month has been filled with travel and commitments. 

Mr. Bruce Leino was recognized at the strategy event for his years of service representing us at Great River Energy.  He brought up a very valid point; we are required and allowed to spend time away to conduct business on behalf of North Itasca/Great River.  Our employees and, most importantly, our families are left to handle the day-to-day activities while we are away.  Thanks, Bruce, for that important reminder.  I also need to thank my staff and most importantly my wife Cathy.  Sometimes I imagine she enjoys the break away from me, but… she has always been supportive of my career and the commitment I have to North Itasca Electric.  Thank you.

The Hwy 38 sales are happening this weekend signaling the start of fall.  The leaves are changing, and temps are dropping.  Jerry put in a good reminder to check your heating system this month. 

I am being told by Great River Energy to expect more hours of control this winter on the dual fuel program.  This is our short-term control. The reason behind the level of control rising over other years is related to the costs in the MISO market.  Extremely high demand prices have been a reality over the past year.  The value of these programs is realized during these price events.  We can control loads during the times of high cost and avoid the price spikes. 

I know this isn’t good news when the price of propane is up.  The cost of natural gas is up significantly also.  Natural gas is very common in power production; this is driving some of the rising costs.  Typically, I have seen natural gas in the $2-3 dollar range, it was $7.86 when I wrote this article, down from the $9 we saw this summer.

With the change in season, this is the time of year we start the next year’s budget.  There is a significant amount of thought and planning that goes into the budget.  We will have a preliminary budget for the Board of Directors by the October meeting. 

This year is going to give me streaks of gray hair.  The cost of an underground transformer in 2018 was around $1,200, that same tub will be $2,400 the next time we buy one.  All our materials have gone up 20-50 percent and things do not seem to be slowing down.  I was just in Tina’s office.  I told her I don’t want to be negative in my article, but I also need you to understand the pressures on your cooperative currently. 

I have been working diligently on a spreadsheet I have used for several years.  I track our exact bill from GRE every month.  This helps me to predict the power costs when it comes time to budget.  I got a glimpse of the proposed rates from Great River this past week.  I will be traveling down to Maple Grove to discuss how these new rates could impact my members.  Far and away the bill from the power supplier is the biggest portion of any electric cooperative’s budget.  Changes in this bill will directly affect the budget in substantial ways. 

All right Brad, pull up!  October is time to celebrate National Cooperative Month.  This cooperative was started by our communities in 1940 at a meeting in Effie, Minn.  Through tough times the communities banded together to lay the foundation of what we are today.  I am proud of North Itasca Electric and the employees I get to work with every day.  I am honored to serve the communities that built us so many years ago.  Cheers to North Itasca Electric Cooperative, Inc.

By your side! Miigwech