Serving You During COVID-19 // CEO Column July 2020

Cooperatives are based upon principles – seven, to be exact. The seventh principle is Concern for Community. Today, this is as important as ever as our community deals with the economic impact of COVID-19. Todd-Wadena Electric Cooperative is working diligently to continue to maintain safe, reliable electric service and to keep rates low. Here are a few ways your cooperative is serving you during this challenging time:

  • TWEC Member Services and Finance Department employees have continued to work, albeit remotely for a period of time, to serve our members with quality service. They are processing billing statements and payments in a timely manner and providing our member services offerings. TWEC’s Operations Department is out in the field daily to quickly act to restore power and provide operational support for construction work plans, new services, and routine maintenance of our distribution plant.
  • TWEC suspended disconnects and penalty fees for over three months to help our members who are struggling to pay their electric bills. Our Finance Department is working hard to contact members and find a way to resolve arrearages for each member’s individual situation.
  • We offer several energy saving programs to help members save money each month. By opting into our dual fuel, interruptible air conditioning, or water heating programs, you can reduce the amount of energy you use. In addition to energy efficiency, these programs offer savings on your energy rate that will save you money on your electric bill.
  • Residential rebate programs are available with the purchase of new higher efficiency appliances, such as refrigerators, dryers, air source heat pumps, or electric heating systems, which also results in savings on a monthly basis.
  • We did work very closely with fuel assistance agencies to ensure those who needed help paying their bills were able to receive funds that the state set aside for this purpose. Please visit our website to find the appropriate agency for your county.

Rest assured that we will continue to serve our members during this difficult time and into the future. Our lineworkers are out in the field daily, and our staff is available to help members. It is our pleasure to continue to provide you with excellent service in all circumstances.

This is The Cooperative Difference. Todd-Wadena is owned by those we serve – our members. The Cooperative’s Board and staff focus on the local needs of our members and our communities. Our number one goal is to provide safe, reliable, and affordable electricity to our members.

Concern for Community

By Marie Katterhagen

Cooperatives are based on seven guiding principles. The seventh principle is Concern for Community, defined as contributing to the sustainable development of our community. At Todd-Wadena Electric Cooperative (TWEC), this is evident at many levels. A primary example is Operation Round Up, where members choose to have their electric bills rounded up to the nearest dollar and the money is distributed by a Trust Board to support local community projects and organizations. TWEC is also active with its own Economic Development program, in addition to supporting other local programs to help give opportunity for development in our territory.

Concern for Community comes in all forms of volunteering and helping our neighbors near and far. Personally, last January I completed my ninth surgical mission trip to the mountainous regions of Guatemala to provide medical care to indigenous people who have no access to medical care.

It takes two days to travel to the abandoned facility where we set up our surgical area, with three to four surgeries going on in one room. All the tables, sterilizers, instruments, and beds are trucked up with us. People are lined up on the roads for days hoping for a chance to get themselves or their families needed medical care and greet us as we arrive!

During our five days at the facility, we touch the lives of close to 2,000 medically through surgery, dental, and medical clinic teams. The dental and medical teams also go out into the villages and set up clinics. We complete approximately 130+ surgeries during this time. It is humbling to assist with routine cases, taken for granted in the U.S., that are lifesaving procedures in Guatemala. Patients sit in a “waiting room” in the hallway knowing they may be there from morning to night waiting their turn, yet they don’t complain and only show gratitude. It is heart wrenching to watch them enter the operating room and pray to their God and over our hands; and then put their trust in foreigners. We are blessed to live in a country where there is easy access to medical care.

We also have a stove team that installs self-contained wood stoves with chimneys. These replace the open pit fires many Guatemalans have in their homes. They help reduce burns, especially to the children. The stoves also reduce carbon exposure in the homes, which helps improve life expectancy. In Guatemala, it is common to spend much of the day gathering wood. Approximately 120 stoves are installed each trip, reducing the amount of wood needed by 60 percent. Our stove teams are the proudest when they can say they created carbon-free homes and a smoke-free village in our world.

As a member of Todd-Wadena Electric Cooperative, the seventh cooperative principle applies to all of us. Concern for Community is evident in how our TWEC directors and staff are actively involved in the betterment of our community. Opportunities to serve are everywhere and the rewards are endless. I would encourage you to always be open to the opportunities in front of you.

For more information on Guatemala, visit www.helpsintl.org.

Coal Creek Closure // CEO Column June 2020

Todd-Wadena Electric Cooperative’s wholesale power provider, Great River Energy (GRE), recently announced plans to transform its portfolio of power supply resources in the coming years. One element of this includes the retirement of the 1,151-megawatt Coal Creek Station power plant in the second half of 2022.

As part of the plan to increase economic efficiencies, GRE plans to phase out remaining coal resources, add significant renewable energy, and explore critical grid-scale battery technology. Each of these steps is an important part of GRE’s plan to significantly reduce member-owner wholesale power costs, while taking advantage of cost-competitive renewables and reliable access to market energy.

Although the decision to close Coal Creek Station will have a dramatic impact on the North Dakota communities that rely upon it for employment and economic benefits, the decision ultimately came down to what was in the long-term best interest of GRE’s member-owner cooperatives such as Todd-Wadena Electric Cooperative. To continue to pay for the plant’s losses each year, when there was a practical alternative available, ultimately led to the decision to close Coal Creek.

Despite what you might read or hear from some news sources, GRE did put a lot of thought into this decision and has made every effort to be transparent, honest, and fair with the communities in North Dakota that are affected the most. This includes voluntarily making payments to these communities for several years after the plant closes, to relieve some of the immediate impact of lost tax revenue.

Great River Energy’s portfolio changes will significantly reduce its power supply costs. The new power supply plan takes into consideration affordability, reliability, and environmental stewardship – three necessary components to ensure GRE’s member-owner electric cooperatives, like Todd-Wadena Electric Cooperative, are well positioned for the future.

 

A Historical Perspective // CEO Column March 2020

Since Todd-Wadena Electric Cooperative was formed in 1940, there have been many changes. Our first substation was energized in 1941 with a capacity of 450 kilowatts, serving 170 members. At this time, the TWEC headquarters was on Jefferson Street in Wadena. Growth required TWEC to build a new facility in 1949 when we moved to the location we reside in now. An addition to the office was built in 1980 as we grew to 5,600 members.

Today, TWEC serves over 8,900 member services and maintains approximately 2,250 miles of power lines. We operate 14 substations and our system peak demand was 47.9 megawatts in 2019.

Power Supply

Beginning in 1940, TWEC purchased its power from MN Power & Light Company. In 1965, TWEC changed from MN Power & Light Company to Cooperative Power for its power needs. In the year 2000, Cooperative Power became Great River Energy–whom we still receive the majority of our power from today.

Value

Throughout the years, GRE and TWEC have focused on making energy a great value for our members. The cost of powering your home has risen at a much slower pace compared to rent/mortgages, cable TV, or even education. Despite many successful efficiency upgrades, the average household needs more power to operate electronics every year. With electricity being both affordable and abundant, it can be easy to take it for granted. Despite increased use and value in our daily lives, you can see in this graph how the cost of electricity has remained relatively flat.

In May 1944, the average electricity bill was $5.07. When you figure in inflation, the equivalent would be an average bill of $73.65 today. While that may seem low compared to your average 2019 bill, there are other factors to consider. Back in 1944, the average consumption was 93 kWh. Today, average consumption is more than 1,400 kWhs per month. This means our members use 15 times more electricity at only two times the cost compared to 1944. That is affordable electricity!

As you can see, there have been many changes in the past and there will be many in the future. However, through all the change there is a constant: Todd-Wadena Electric Cooperative. We will always be here to be of great value to our members and to responsibly provide safe, reliable, and affordable utility services.

A Look at Headquarters Building Financials

This process began in 2012 when the TWEC staff and Board of Directors began evaluating the future need for a new headquarters building. There has been extensive study and planning with many experts and consultants. Two of the experts were Ringdahl Architects and Contegrity Group – Construction Management that worked with staff and the Board to provide estimates to remodel or to rebuild. The cost estimate to remodel was approximately $2.9M. The proposal to rebuild is approximately $3M. The estimate to rebuild is to be done in phases at our current location. There are many cost savings and practicalities to rebuilding in the same location such as existing infrastructure, the location within our service territory, the ability for quick line crew response times, and the economics of already owning the land.

As can be seen from the graph to the right, the costs to rebuild and remodel are very close. However, the life of a new building would be significantly longer than that of a remodel. By rebuilding, we would ensure the quality of the building to serve TWEC members for over 50 years to come, versus needing additional remodeling in as little as 25 years. A breakdown of the costs over the lifetime of the building shows that rebuilding makes economic sense.

Potential New HQ Finances

The analysis has also consisted of a narrowly focused strategic planning session conducted by a financial planning expert from National Rural Utilities Cooperative Finance Corporation (CFC). Since that planning session, staff and the Board have been preparing financially as to how we would best pay for a potential new headquarters.

There are many positive financial factors that allow TWEC to fund the new HQ if it is approved.

Over the past several years, long-term interest rates have fallen and remained low. TWEC refinanced long-term debt that was repricing every few years to long-term fixed debt at low long-term interest rates.

Cash has been saved and invested to earn interest income, adding to non-operating margins that have contributed to our growth in equity. Our equity is currently in a good place at 45.10 percent. As you can see in the following chart, this has been growing since 2010. These investments have earned us interest—not only growing our equity but also creating a savings plan for projects such as unexpected storm work, distribution plant construction, or the new headquarters. 

Great River Energy (GRE), our wholesale power supplier, has managed their rates for the past few years to provide rate stability. GRE is forecasting the same stability in the foreseeable future.

TWEC has worked very hard to manage costs through staffing levels, maintenance programs, and the replacement of assets.

As a result of these factors, TWEC is in a position to pay for a new building without taking out a new loan. We are a not-for-profit, member-owned utility and our members’ needs, concerns, and equity are always front of mind with every decision we make. We are committed to serving our members effectively and efficiently for years to come.

A TWEC Board Member’s Perspective // Tom Brichacek February 2020

Headquarters Building

Tom Brichacek TWEC Board Vice Chair

Tom Brichacek
TWEC Board Vice Chair

When I was elected to the Board of Directors in 2012, my first meeting there was a presentation on the needs of our headquarters building. In the presentation, there were multiple deficiencies with our current building that were brought up. After that presentation, a building committee was formed to look into possible solutions for the issues.

Throughout 2012 and 2013, we researched, received bids, and evaluated the use of our members’ money versus the gains to the building. The committee came to the conclusion that putting that much money remodeling a 1940s building didn’t make economic sense.

Moving into 2014, we researched the cost of a new headquarters building and it was concluded that building new versus remodeling made more long-term sense. But the Board felt there were other more pressing items that needed our funds, so we shelved the project at that point.

This year, with no substations being built and no major construction projects on the docket the board felt we were in a good position to bring the headquarters project back up again. We reviewed the past documents and plans and came to the same conclusion we did in 2014, that a remodel wasn’t the best use of our members’ money. We are currently working on updating the plans that were drawn in 2014 to reflect our current needs, and then we will send those plans out for contractor bids.

Our CFO has been working on the funding sources we will need to complete the project. The Board feels strongly that raising our members’ electric rates cannot and will not be a component of the funding for the building. We have also increased the deprecation of the existing building, so there will not be any remaining equity when the time comes to remove it. Once we receive the bids back, we will review the bids to determine the cost for a new building. We will then make the final decision to move forward or not. Rest assured, we are working hard to ensure we are doing what is best for our membership.

 

Legislation

An important component of being on the Board of Directors at Todd-Wadena Electric Cooperative is keeping up with the bills being proposed in the State and Federal Legislature. Some of the proposed bills would have an impact on the way cooperatives do business, or affect the cost of providing electric service to our members. As directors, we meet with our legislators to lend our point of view to the bills and their impact on our member-owners.

One example of our work on your behalf happened last year. There was an unintended consequence of the 2017 tax reform law that was passed that would have threatened cooperatives’ tax exempt status if we accepted grants or federal disaster relief funds. Last September, TWEC CEO Dan Carlisle and I traveled to Washington, D.C. with other electric cooperative directors and CEOs from across the state to meet with our elected Representatives and Senators to discuss the impact of this law on our local cooperatives. We made real progress with all of the Minnesota legislators (except Representative Omar) signing onto or co-sponsoring the RURAL act to fix this issue. It was signed into law by President Trump in mid-December, saving cooperatives and, in turn, their members, across the nation from suffering the effects of the varied tax implications.

Your elected Board of Directors works with the employees of the Cooperative to ensure safe, reliable and affordable power reaches your homes.

Tom Brichacek
TWEC Board Vice Chair

Load Management // CEO Column February 2020

Photo of Dan Carlisle

Daniel Carlisle
President/CEO

We are always looking for ways to help our members save energy and money. Todd-Wadena Electric Cooperative uses programs and incentives to promote the use of electricity during off-peak hours—when it costs less. We do this through a process called load management.

Load management refers to a system that matches electricity supply with demand. Think of the electrical grid as a highway with rush hours at certain times (such as hot summer afternoons) when power supplies are stretched to their capacity. These periods of high demand cause spikes in power costs. Load management allows us to adjust participating members’ usage patterns to a different time, reducing the strain on an overloaded system.

Our power supplier, Great River Energy (GRE), determines when a control event will take place. By monitoring conditions over their entire system, as well as the price of electricity on the energy market, they control the load when it is most beneficial to members. GRE is able to purchase off-peak energy at a lower cost, generating savings which TWEC, in turn, can pass on to our members.

TWEC has load management programs for irrigation, dual fuel, water heaters, and commercial/industrial accounts that enroll. Control is managed with demand response units installed at members’ locations. These units listen for commands and control when needed. Currently we use radio frequency (RF) demand response units, which means the commands to control the system are sent via a radio frequency. This method has issues as commands are sometimes not received due to largely forested areas, remote fields, or weather conditions. A newer method for sending commands is now available via power line carrier (PLC) demand response units. Here the commands travel through the power line, just like electricity, so the error percentage is significantly decreased.

In 2020, TWEC will be conducting a pilot program installing 100 PLC units, which will utilize this new and improved technology. If everything goes as planned, in 2021, we will roll out a full change out of all receivers – over 5,000 units. With a lower error rate, we can increase savings during times of high demand for electricity. These savings are then passed on to our members.

Daniel Carlisle
President/CEO

Our ‘Sota Grown Indoor Food Production Container has Arrived!

Last year, Todd-Wadena Electric Cooperative was selected by our power supplier, Great River Energy (GRE), to be the host of a hydroponic indoor food production container in our service territory. This national research project is being conducted by the Electrical Power Research Institute (EPRI).

Picture of Allison and Greg taking a look at the internal control unit.

Allison and Greg taking a look at the internal control unit.

On January 15th, the ‘Sota Grown agricultural pod finally arrived to its home at the Ag and Energy Center at Central Lakes College (CLC) in Staples. The keys were passed from GRE to TWEC and then to the host, CLC. We have partnered with the Ag and Energy Center to give students the unique opportunity to learn firsthand about sustainable agricultural practices by maintaining and harvesting the produce.

Lakewood Health System is also another member of the project team and will receive the produce that is grown to use in their “Food Farmacy” program. This program works to address hunger/health disparities and is designed to connect families with healthy food options.

This project will gather useful data for the future expansion of Minnesota’s indoor agriculture industry. This hydroponic system is built entirely inside a shipping container. It will provide valuable data for utilities—allowing analysis of the electric load required to operate in our region. A wide range of operation parameters will be monitored to determine how Minnesota’s outdoor climate impacts energy consumption.GRE and TWEC will use this data for electricity load planning and evaluating beneficial rate designs.

TWEC is excited for this community project and grateful to be working with our local partners, Central Lakes College and Lakewood Health System. This project not only benefits the utility industry but the entire community.

'Sota Grown is installed.

Four-Year Work Plans

Photo of Dan Carlisle

Daniel Carlisle
President/CEO

Here at Todd-Wadena, our crews work year-round to provide members with safe, reliable, and affordable electricity. To accomplish the wide range of projects we face in any given year, we operate on four-year work plans.

These work plans, designed in large part by our electrical engineers, help us determine what needs to get accomplished each year. Tasks such as replacing undersized transformers, identifying and replacing old poles, and building new lines are all planned out in advance. This allows us to make sure we have necessary items such as the correct amount and type of poles in inventory, cement pads poured and ready to use, and the proper hardware required by Rural Utilities Service (RUS) for each pole assembly.

According to the 2016 Load Forecast and historical patterns, TWEC anticipated extending service to 373 new residential consumer locations during 2017-2020. The service extension cost for the 2017-2020 period was estimated at $492,000. During this same four-year period, we anticipated 480 service capacity increases, with an estimated cost of $800,000.

The four-year plan we are currently operating under also outlines recommended distribution line projects. This work plan calls for the building and replacement of 45.31 miles of line due to growth on the system, adding back feed capability between substations, and replacing old lines that have reached the end of their useful life. Also planned is 1.10 miles of new tie lines to address growth on TWEC’s distribution system.

The Blueberry Substation was also included in the construction work plan period, replacing Todd-Wadena’s former Menahga Substation. This new substation improved electrical service reliability in the Menahga area. Todd-Wadena co-located the Blueberry Substation with Great River Energy’s new transmission substation.
In addition to these projects, our crews stay busy with line patrol, vegetation management, and a variety of other responsibilities around our system. We appreciate the hard work they put in to make sure our members have reliable power. Please respect our crews and help keep them safe by pulling over and giving them adequate working space.

Happy New Year!

Building Goals for TWEC

As we continue to look into the possibility of a new headquarters building for Todd-Wadena Electric Cooperative, we are first and foremost concerned with how to best serve our membership. This means taking time to assess both the current and future needs of our cooperative.

Just as TWEC’s Board of Directors has a responsibility to maintain and enhance the co-op’s electrical distribution system, the Board is also responsible for maintaining and enhancing the facilities that serve the membership. Both are crucial to the long-term success of Todd-Wadena.

To further pursue the possibility of a new headquarters building, Todd-Wadena is working with Contegrity Group — a construction management company based out of Little Falls, Minnesota. Architects will develop designs and specifications based on input received from TWEC. A building committee, comprised of TWEC board members, CEO Dan Carlisle, and co-op employees, will then review building plans and offer feedback to help determine the most efficient design.

Once Todd-Wadena has the blueprint and specifications fully prepared, the Cooperative will send out for bids. The goal is to utilize as many local contractors as possible. If the bids received are within our budget range, the Board will then move forward with construction on a new headquarters building.

If we move forward with a building project, one of the primary goals will be to offer members new opportunities to be involved with the Cooperative. We would have hands-on displays to learn about energy efficiency, rebates, and overall ways to interact with the Cooperative. Another goal is making sure we can conduct business in the most efficient way possible. A small conference room is being included in the design to provide a private and comfortable setting where members can meet with us. Equally important is providing a safer and more productive environment for employees and members.

As we take these important steps over the next few months, we will keep our members informed throughout the process. We appreciate your support as we plan today for the future of Todd-Wadena Electric Cooperative.

New Headquarters Blueprint