News You Need to Know

Guzman Energy LLC is an investor-owned, for-profit energy broker based in Coral Gables, Florida, with an office in Denver, Colorado. Founded in 2013, the company contracts with other energy suppliers and markets to utilities, retail providers and large end users.

Dakota Energy Cooperative Annual Meeting

East River Electric would like to congratulate the members of Dakota Energy Cooperative on their annual meeting Tuesday, June 14. It’s been reported as a record attendance, and we want to congratulate the members on taking an active role in their cooperative. The members own their co-op, and we are pleased to see such high member participation.

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Dakota Energy Annual Meeting Tuesday, June 14th

Electric cooperatives are owned by their members. Dakota Energy Cooperative’s members will have a chance to vote Tuesday, June 14, for who they want to represent them on the board of directors. East River wishes all of the members well at their annual meeting.

You may have seen information falsely accusing East River of “recruiting” candidates for the board of directors. This couldn’t be further from the truth. We have not been involved in any conversations with the incumbent directors or challengers about running for the board of directors.

East River Electric has served Dakota Energy members for more than 70 years and will continue to serve them with affordable wholesale electricity for decades to come. Over the past few weeks, the power of being connected to a cooperative family has been proven once again after the destructive storms came through eastern South Dakota. East River crews worked diligently to repair hundreds of broken poles and damaged infrastructure to get the lights back on as soon as we could. Cooperatives work together for the benefit of the members at the end of the line.

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East River’s Response to Recent Letter by Dakota Energy Board and Management

Dakota Energy and Guzman Energy lost their federal court battle. A highly respected, long-serving federal judge ruled that Dakota Energy can’t terminate its contract early and dismissed the lawsuit against East River. Now they’re spending more of their members’ money on an expensive appeal, and we’re confident they’ll lose again.

They’re making a desperate attempt in a recent letter to their membership that was also inserted into the Cooperative Connections magazine to further confuse their member-owners by distributing out-of-context emails that don’t amount to anything. Dakota Energy’s own members contacted East River Electric at the start of the lawsuit to obtain information they said they could not get from Dakota Energy. They are co-op members who own East River through their membership in Dakota Energy.

Hundreds of Dakota Energy members have challenged the board to stop them from buying power from a for-profit company, Guzman Energy, and their efforts to tear down the cooperative system. The group of concerned members working to oppose these moves by Dakota Energy’s current board understand what the rural cooperative system does for them and for their fellow members, and they don’t want to see it destroyed.

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Judges Dismisses Lawsuit Against East River Electric

Federal Judge Lawrence Piersol has dismissed a lawsuit filed by Dakota Energy Cooperative against its wholesale power supplier East River Electric Power Cooperative, saying that the contract between the two electric cooperatives is clear and does not allow Dakota Energy to terminate its contract early.

“The ruling from Judge Piersol is a major victory for all of the electric cooperative member-owners across the state of South Dakota,” said East River Electric General Manager and CEO Tom Boyko. “A contract is a contract and Judge Piersol’s ruling is clear that the contract does not allow for an early termination. It affirms what we’ve been saying all along, Dakota Energy can’t just walk away from the commitment it made to its neighboring cooperatives. It is our sincere hope that this will end spending member-owner money on an expensive ill-fated legal battle.”

In November 2020, Dakota Energy, an electric co-op headquartered in Huron which serves consumers in Beadle, Hand and Hyde counties, filed a lawsuit against East River Electric in an attempt to force East River Electric to give Dakota Energy a buyout number so they could terminate their contract long before the agreed upon date of Dec. 31, 2075. East River Electric and its power supplier Basin Electric Power Cooperative argued in court that the contract that was extended in 2015 and signed by Dakota Energy did not allow for an early buyout. Judge Piersol agreed with East River and Basin Electric and granted their motions for summary judgement, dismissing the case.

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Cooperative’s Rates Rise After Signing Deal with Guzman Energy

Kit Carson Electric Cooperative (KCEC), based in Taos, New Mexico, was one of the first cooperatives that bought out of their long-term wholesale power contract with their power supplier Tri-State Generation and Transmission Association. But since that buyout, their rates have increased significantly.

In 2016, KCEC was able to buy out of its contract with Tri-State Generation and Transmission Association. The year before the buyout in 2015, according to public filings with the New Mexico Public Regulation Commission, the KCEC average power cost per member was $0.141 cents per kilowatt hour. And the rates have continued to go up. In 2016, the rate went up to $0.151 cents, 2017 it went up to $0.16 cents and in 2018 it went up to $0.169. By 2019 their per-consumer energy rate according to the federal Energy Information Agency increased to $0.1728– that’s a 22.5% increase in four years. The wholesale cost of power, which included transmission and other services, in 2016 from Tri-State G&T was $0.072 cents per kilowatt hour. The Tri-State average wholesale rate in 2019 according to its annual report went to $0.075 cents per kWh, but according to KCEC’s own filings with the New Mexico Public Regulation Commission, in 2019 the total wholesale cost of energy went to $0.1064 cents per kilowatt hour – significantly more than Tri-State’s average wholesale rate of $0.075 and a 47.8% increase over Tri-State’s average wholesale power rate in 2016. Tri-State’s wholesale cost of power has gone up just 4.16% from 2016-2019.

Guzman promised KCEC they would save $50-70 million over the next ten years. However, KCEC’s wholesale cost of power has gone up 47.8% in just four years.

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