Word from leadership
2021 was an exceptional year for Cass County Electric Cooperative. The success of the cooperative is directly tied to the “people behind the power.” Cass County Electric has 92 full-time, one part-time and six seasonal employees and an active board of directors committed to supporting our mission to serve our members’ energy needs with affordable and reliable electricity.
This past year, we completed a strategic planning process to ensure the board and management are in sync. During the session, we reviewed and validated our strategy execution road map and business plan for 2022.
Growth is essential for the cooperative to increase revenue and keep rates stable. We are fortunate to serve in communities with a growth mindset and embraces economic development. We have exceptional employees committed to establishing new services and maintaining reliable service to our existing members. In 2021, the membership grew by 1,778 new accounts, including 1,217 new homes, for a year-end total of 55,199 accounts.
Kilowatt-hour (kWh) sales started the year slow because of a mild winter. The summer months were warm, resulting in record kWh sales. Fall and winter sales were slightly below average, especially grain drying because of the dry conditions. Overall, the cooperative ended up selling 1.308 billion kWh, slightly under the budgeted amount of 1.315 billion.
Revenue at year-end was $142.7 million, about 4.1% over the previous year. The average selling price was 10.91 cents per kWh. With strong sales and lower-than-anticipated operating expenses, margins were $8.3 million. The margins will be allocated to the membership as patronage capital and eventually returned to the members as capital credits. Last year, the cooperative paid out 1.75 million in capital credits to the membership. This March, the cooperative paid out $3 million in capital credits for 1999, 2000, part of 2001, estates and early retirements.
Controlling expenses is a primary focus of the cooperative. In 2021, the cost to operate the cooperative was 2.234 cents per kWh, about 39% below electric cooperatives of similar size. Operating expenses for 2021 were at $15.1 million, slightly lower than in 2020. The employees are responsible for managing the operations and expense control for the cooperative. Thanks to them, we held down our cost to run the cooperative.
Our equity currently sits at 44.5%, about the median for an electric cooperative of our size and growth.
In 2021, we once again achieved “four nines” of reliability, with the power being on 99.991% of the time. Reliability does not happen by chance; it is intentional and is executed by our dedicated employees. To maintain high reliability, we invest in employee training, utilize specialized trucks and equipment, operate a 24/7 power control center, automated substation controls, automated switches in the metro, automated metering infrastructure, and an active outage management system.
With cyberattacks on the rise, Cass County Electric is committed to investing in employee training, critical security controls, and other systems to fortify our defenses against cybercriminals. Protecting data is a strategic focus for the board and management, and something we take seriously.
Another focus area for the cooperative’s employees is to provide exceptional service for our members. In 2021, we surveyed our members and scored an 86 in the American Customer Satisfaction Index. The average electric cooperative scores a 72. We are very proud of the people behind the power; they know their purpose and perform exceptionally well!
As we look forward to 2022, there are opportunities and challenges ahead.
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We anticipate strong growth in new services, and kWh sales are up from near-record cold in January and February.
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With the passage of the federal infrastructure investment and jobs Act, there may be opportunities for electric cooperatives to capitalize on some of the funds. The state will decide how to distribute the funds for electric vehicle charging infrastructure, grid automation, and other electricity-related areas.
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One area of concern is the supply chain for materials used to build new power distribution infrastructure. Lead times for equipment like transformers are out more than one year. Our procurement team has done an excellent job ensuring we have the product on hand to meet the demand for new services and maintenance on existing equipment.
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Minnkota is evaluating various power supply options for our future and will likely decide this fall
It is an exciting time to be in the electric industry. Cass County Electric is positioned well with an active board and a dedicated team of employees, “the people behind the power,” to ensure your electricity is affordable and reliable.