Posted 6/26/13 (Wed)
By Neal A. Shipman
With the exploding development in the Bakken oilfield in McKenzie County, many businesses are seeing the biggest growth in sales in their history.
And McKenzie Electric Cooperative is one of those local businesses that is seeing unprecedented growth as the local power supplier is scrambling to keep pace with new demand.
“The Bakken boom is exploding,” stated Ray Tescher, chairman of the cooperative’s board of directors, during the co-op’s annual meeting in Watford City last Tuesday. “We have doubled in two years what we did in electric sales during the first 66 years of the co-op’s existence.”
According to Tescher, of the 188 rigs that are currently drilling in North Dakota, 100 of them are in the cooperative’s service area.
“In 2011-2012, cooperative sales grew by 70 percent,” stated Tescher. “And this past year, we saw growth of over 40 percent.”
That unprecedented growth has resulted in the co-op’s gross operating revenues to grow by $27 million, a 64 percent increase from last year, and the net margins to increase by over $4.8 million.
In 2011, the cooperative had net margins of $8,003,328 on sales of $37,995,060, while in 2012 net margins increased to $12,847,583 on sales of $64,613,133.
And according to Tescher, McKenzie Electric doesn’t expect to see any slowdown in the growth of electric sales in the years ahead.
“By 2025, we estimate that the cooperative will be six times our size today,” stated Tescher. “And we probably are underestimating that growth.”
As a result of the growth, according to Tescher, the cooperative is constantly upgrading and expanding its system which improves electrical service to its members.
“As we’re building substations and lines, we are improving them,” stated Tescher. “We’re building redundancy into our system, which will mean less power outages and better service.”
And because of the growth, the cooperative is still able to offer its residential customers some of the lowest electrical rates in the state.
But with the tremendous growth, the biggest challenge facing McKenzie Electric and its power supplier, Basin Electric, is ensuring that there is enough power available to serve the demand.
“Our peak load is normally in December,” stated John Skurupey, McKenzie Electric’s CEO. “This past winter, we could have been load limited, which is why Basin Electric is working to bring more power to this area of the state.”
According to Skurupey, the cooperative is facing a daunting task in meeting the demand for increased electrical service. But he says that McKenzie Electric is holding its own.
And to meet the increased demand for power, the cooperative is looking forward to seeing several of Basin Electric’s new projects come online.
Currently, Basin Electric, according to Andrew Serri, CEO of the regional power supplier, the cooperative is in the process of building three electric generating stations near Watford City, as well as three more near Williston. Those six stations will add 270 megawatts of power to the system. In addition, Basin Electric is planning to construct a 345kv line from the Antelope Station to Tioga.
“Overall, Basin Electric is seeing a 200 megawatt increase in power demand system-wide,” stated Serri. “And almost all of that growth is in the Bakken region of northwest North Dakota.”
While McKenzie Electric is growing to meet the demands for new electric customers, Tescher assured the members at Tuesday’s meeting that everything that the cooperative is doing is being done for its members.
“We’re adapting our policies to protect our members, both old and new,” stated Tescher. “We’re trying to do it right for you, the consumer. But it’s hard. We’ve got to treat all our members fairly.”