As we begin a new year, Lake Region Electric Cooperative will do so from a position of strength. By working together, we’ve made several advances.
The satisfaction of our cooperative members has always ranked high in LREC’s goals. After all, this is your cooperative and our members are its owners. That’s why I’m so pleased to tell you that a recent member survey shows an increase in satisfaction from 8.6 to 8.9 (on a 1 to 10 scale, with 10 being the highest satisfaction) during the past two years. I feel that this positive score can be traced back to our continued focus on some very fundamental priorities: improving reliability, keeping rates stable, safety for our employees and the public, and using our resources wisely so that we see strong financial performances across our entire cooperative. It’s also appropriate that I extend my sincere thanks to our employees and the board of directors for the great efforts they’ve made in setting and adhering to these priorities. We’re on a very good path!
There are other ways of gauging our success, too. For instance, we continue to have downward trend on outage times. Our vegetation management schedule and upgrading of facilities have been part of our overall strategic plan. Clearly, this approach is paying off.
In terms of our financial performance, I point to what will be another great capital credit retirement—in fact, a record $1.6 million! Unlike other forms of business that make profits for their shareholders, we operate on a not-for-profit basis through our system of retiring capital credits. Capital credits represent your share, as member-owners, in the financial success of Lake Region Electric Cooperative. We are very pleased to be able to make such a large retirement (or return) of money to our local member-owners. This influx of dollars also creates an economic boost for our local communities. Lake Region’s financial strength is good for everyone!
Our electric rates remain stable and we do not see a need for a rate increase anytime soon. Wholesale power provider, Great River Energy (GRE), has also kept its wholesale electric prices stable. That keeps a huge chunk of our annual expenses unchanged, assisting in our budgeting at the electric distribution level. Because of rate stability, Lake Region members will be better able to budget their energy dollars, too!
In November 2019, GRE put in a new transmission substation that feeds four (Frazee, Dora, Dent, and Perham) of our distribution substations. This was a $6.8M project that will improve reliability in a large portion of Lake Region’s service territory. The Frazee GRE transmission substation is scheduled to be rebuilt starting construction in 2020. This will also increase reliability.
Locally, we have worked hard to create new revenue streams to help bolster our cooperative’s revenues. The new natural gas subsidiary is an example of innovation. We applied lessons of the rural electrification movement to extending a new vital service in unserved areas. The natural gas business is projected to become profitable this year, in just its second full year of operation!
The wet conditions and high moisture content in the corn caused a very slow harvest process in 2019. It was certainly a difficult year for our agricultural members. We tried to be as helpful as possible in working closely with our natural gas grain drying customers. Local people working together really makes a difference and we were able to supply the natural gas they needed.
Our new wind/solar hybrid electric generation project is another innovative endeavor producing financial benefits. This local project has been saving our Lake Region members money since it came on-line in March 2019.
The 2020 District Meeting Schedule is as follows: District 2 Meeting – February 6th, 2020 at 2 p.m. at Frazee Event Center; District 8 Meeting – February 6th, 2020 at 6:30 p.m. at Battle Lake Community Center; and District 5 Meeting – February 8th, 2020 at 10 a.m. at St. Mary of the Lakes, Detroit Lakes. We will have two long-serving directors retiring from the board this year. District Meetings are also a great opportunity for LREC leadership to engage directly with members. Please take this opportunity to share your questions and ideas with us. We always welcome your feedback. That’s how we’ll continue to improve.