Whetstone Valley Electric Cooperative, Inc.
Minutes of the 77th Annual Membership Meeting
March 22, 2018
The 77th Annual Membership Meeting of the Whetstone Valley electric Cooperative, Inc. was called to order by President Bill Tostenson at 6:30 pm on Thursday, March 22, 2018 in the Milbank High School Gymnasium, Milbank, SD.
President Tostenson stated that 225 voting members were present, creating a quorum. Tostenson invited everyone to stand and join in the singing of the National Anthem led by six Juniors from Milbank High School.
Pastor Robert Hansen, Pastor of American Lutheran Church of Milbank gave the invocation.
Tostenson then introduced the Board of Directors, former employees and directors, and guests.
Secretary Darren Strasser affirmed that the Notice of Annual Meeting and the unapproved minutes of the 2017 Annual Meeting had been mailed to each member. Tostenson called for a motion to waive the reading of the Notice of Annual Membership Meeting and to approve the minutes of the 76th Annual Meeting as mailed out. A motion from the floor was seconded and carried.
Tostenson called on Treasurer Krista Atyeo-Gortmaker to present the Treasurer’s Report.
Atyeo-Gortmaker reviewed the 2017 Operating Statement, Balance Sheet, Auditor’s letter, Statistical Report, History of Capital Credits Paid, and list of Taxes paid in 2017. Her report showed that 2017 revenues were $10,345,105 and total expenses at $10,068,833. Total margins were $781,780. The cooperative’s balance sheet showed assets of $32,529,700, liabilities of $22,059,360 and equity of $10,470,340. Members were informed that capital credits in the amount of $187,782 would be credited to members’ in May. A motion from the floor to approve the Treasurer’s Report was seconded and carried.
Tostenson introduced Bob Sahr, General Counsel for East River Electric Power Cooperative to present the East River report.
Bob provided a brief history of East River as a power supply cooperative. He reported that East River is in its third year of becoming a transmission owner in the Southwest Power Pool and talked about the challenges and benefits that has provided to East River members. Bob discussed the portfolio of generation resources and reported that in 2018, about 36 percent of the power East River provides will be renewable including wind and hydroelectric energy. He provided an update of the load management system that has saved East River members more than $200 million in avoided wholesale power costs since it launched in 1985.
Bob discussed the continued need for safety education for the public working near power lines. He noted the trend of larger agriculture equipment being used and the increased potential of contact with overhead power lines. East River developed and released a farm safety marketing campaign with the goal to remind farmers to remain aware of electrical equipment when working on the farm.
Bob also updated those attending the meeting of the Rural Electric Economic Development Fund (REED). REED has been in operation for more than 20 years and is owned by 22 electric cooperatives. The REED fund helps to provide financing to public and private projects that add value to our communities.
Tostenson invited Mark Hofer, Director of NRECA to address the members.
Mark Hofer, the South Dakota Director for the National Rural Electric Cooperative Association (NRECA), reported on current activities of the national organization. NRECA is the national service organization that represents America's electric cooperatives.
Mr. Hofer discussed government relations activities and legislative issues that NRECA is currently addressing with federal lawmakers and agencies. He also discussed board leadership classes, staff training opportunities and health insurance offered by NRECA to its member’s directors and employees. Mr. Hofer reported that NRECA also performs economic and technical research services regarding engineering, environmental, legal, tax and other issues.
Mr. Hofer concluded by talking about international efforts of the national organization. He reported that NRECA International has brought electricity to more than 126 million people outside of the US by designing and implementing rural electrification programs in 43 developing countries.
Tostenson called on Whetstone Valley General Manager, Dave Page for his report.
Page welcomed the members to the Annual Meeting of the Cooperative and began by discussing the activities of the cooperative in 2017. He talked about the restoration of the damaged distribution system sustained in the ice storm of 2016. He reported that due to the disaster declaration, FEMA assisted with the cost of restoration.
In his report on 2017 activities, Page noted that 25 miles of power-line had been replaced. Most of this was the conversion of overhead to underground line. The cooperative plans to replace 30 miles of line in 2018. He also reported that in 2017, 35 new services were built and 77 idle services were retired. Page noted that Whetstone has been investing about $1.5 million each year in system replacement and new construction.
Page discussed the increase in power costs of about 8 percent experienced in 2017 and the resulting rate increase. He noted that rates will likely remain stable throughout 2018.
Page discussed wholesale power supply, generation resources. He also talked about regulatory and power market changes experienced by Basin Electric Power in recent years impacting the cost of wholesale power.
Page reported on legislative issues being addressed by rural electric cooperatives including halting of the proposed sale of Power Administration transmission assets, the continued funding of USDA Rural Utilities Services and the successful extension of tax credits for geothermal heat pump systems.
Siting a Rate and Cost of Service Study conducted in 2017, Page reported that a rate adjustment may be needed in 2019 to meet the cooperative’s financial goals and revenue requirements.
Page reported that East River Electric Power Cooperative and Western Area Power Administration are currently working together on a joint project which will improve reliability to East River’s transmission system in the Whetstone Valley service area. WAPA is building a new high voltage transmission substation, named the Roberts County substation, near Sisseton. The substation will tie into Western’s existing transmission line that runs between Summit, South Dakota and Forman, North Dakota. East River will construct two new transmission lines that will tie into East River’s existing transmission system. The new Roberts County substation and transmission lines will provide a new additional source of power into this area. Construction on the project will begin in 2018 and is expected to be completed in the fall of 2019.
Page concluded his report by discussing the future of Whetstone Valley Electric. He remarked on the favorable financial position and overall reliability of the distribution system. Page sited the rising costs of power and replacement of the distribution system as challenges for the future. He also noted the Cooperative’s strategic plan with specific initiatives to address these challenges.
Tostenson called on the Cooperative’s attorney, Harvey Oliver, to conduct the election of directors and a proposed bylaw amendment.
Mr. Oliver reported that districts with open seats were districts 3, 4 and 6. Only one candidate for each of the districts was submitted; Darren Strasser, Tom Berens and Scot Niedert respectively. Oliver stated that no other members were nominated for these districts so the candidates were duly elected.
Mr. Oliver provided an explanation of the bylaw amendment proposed by the board of directors. The amendment would remove a stringent order of business that has required elections to be conducted later in the business meeting. The amendment would allow the membership to begin casting votes upon any matters immediately upon the establishment of a quorum. This will permit voting to take place during the luncheon and would allow for the completion of voting earlier in the business meeting. A vote ‘Yes’ would amend the bylaws as submitted. A Vote ‘No’ would leave the bylaws unchanged.
Mr. Oliver instructed the members to mark their ballots and called on the Credentials and Election Committee to collect and count the ballots.
General Manager, Page introduced all of the employees and presented two employees with service awards. Jon Christensen, Operations Manager for 10 years of service and Brian Davis, Journeyman Lineman for 5 years.
Page announced that Logan Meyer and Shelby Lee were chosen to participate in the 2018 Cooperative Youth Excursion to the Basin Electric facilities near Bismarck, North Dakota. Kylie Kasuske was chosen as the representative for the National Rural Electric Youth Rally in Washington, DC. Montana Swenson was congratulated as the 2018 winner of the Basin Electric/Whetstone Valley Electric $1,000 Scholarship for a member dependent.
A video was presented highlighting the mission and accomplishments of NRECA’s Action Committee for Rural Electrification (ACRE). General Manager, Page talked with the members about the value of contributing to the political action committee to support political candidates that advocate for electric cooperatives.
President Tostenson presented the Credentials and Election Committee report of the ballot count for the proposed bylaw amendment. With 154 ‘Yes’ votes and 54 ‘No’ votes, the amendment passed.
Tostenson called for any unfinished or new business from the floor. With no further business, and a motion and second from the floor, President Tostenson adjourned the meeting.
There was a drawing for numerous door prizes with Janet Michlitsch of Milbank winning the grand prize of $500.