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.
We want to address a letter that was sent to Dakota Energy members and distributed on social media and the Cooperative Connections magazine which made inaccurate claims and misrepresented the facts.
- Working with concerned members of Dakota Energy
East River responded to several members who were asking for information about the consequences of Dakota Energy’s board’s actions. The members asked for information, and because they also own East River Electric through their Dakota Energy membership, we provided information. The Dakota Energy board’s attempt to buy power from a for-profit energy broker was leading members down a dangerous path they didn’t want to travel on, so East River provided members with information and looked for ways to help the membership understand the issue.
- East River Created a Website to Give Co-op Members the facts
East River created its own publicly-available website www.keepourcoop.org to help inform the membership with facts. The lawsuit involved complicated issues, so the concerned members asked us to share information important to member-owners. We did that through this website.
- East River Has Not Funded the Concerned Member Group
Hundreds of people signed a petition to try and stop their board’s actions. East River did not fund any of the members’ efforts to fight back against their own board and the risky direction they were headed. The concerned members have spent thousands of dollars of their own money on attorneys trying to stop a Colorado-based, for-profit energy broker called Guzman Energy from taking over their power supply. Members have asked for proof from Dakota Energy about their claims of East River funding to this group. No proof has been provided because none exists.
- East River Never Committed to Providing Dakota Energy a Buyout Number
In Dakota Energy’s own board minutes that came to light during the lawsuit, East River and Basin Electric leadership told the Dakota Energy board it had no right under the contract to buy out of their long-term contract it just signed a few years ago. The federal judge agreed. Their board minutes from that day say this: “The current contract is in effect until 2075 and that the legal position is that there is no course for a buyout.”
- Dakota Gasification Company has a Net-Positive Financial Impact
The Dakota Gasification Company, a subsidiary of Basin Electric Power Cooperative, has had a net benefit to the members of $800 million over the life of the plant. Since commodities have gone up significantly in recent months, currently Dakota Gasification is very profitable, which has a positive impact on consumers.
- FERC Ruling Affirms No Right to Buyout Number
The Federal Energy Regulatory Commission (FERC) regulates the interstate transmission of electricity, natural gas and oil. East River Electric is not regulated by the FERC, but Basin Electric is. The FERC ruled in February 2021 that “Basin’s Bylaws…do not require that the Wholesale Power Contracts provide for early termination and withdrawal.” FERC also said that Basin’s bylaws don’t permit withdrawal until a member has met all its contractual obligations to the Cooperative. You can read the excerpts here, or the full FERC orders for September 14, 2020 and February 18, 2021. In Colorado, another generation and transmission (G&T) cooperative voluntarily gave member cooperatives a buyout number. What the FERC said is because the G&T willingly agreed to buyouts, the number must be just and reasonable. It’s a completely different situation with East River and Basin. Neither East River nor Basin have agreed to allow a buyout. The Dakota Energy board’s argument is off base and completely irrelevant.
East River is disappointed by the Dakota Energy board’s decision to appeal this case and spend even more of their member-owner’s money on an expensive lawsuit. But we’re confident that the judge’s ruling will stand and Dakota Energy’s member-owners will be protected from being forced to buy power from a for-profit energy broker. They will continue to have access to East River Electric’s affordable and reliable power supply for decades to come.