What’s the difference between East River Electric and Guzman Energy when it comes to power delivery?
East River Electric is a 70-year-old wholesale electric supply cooperative, headquartered in Madison, S.D., with 8 locations spread across South Dakota and Minnesota that was created and is still owned by its member cooperatives, including Dakota Energy.
Guzman Energy is an 8-year-old for-profit energy broker owned by a Florida-based private equity investment group which also has an office in Denver which has signed a letter of intent to provide power to Dakota Energy if they’re successful in buying out of East River Electric, the cooperative they already own.
East River Electric owns and operates over 3,000 miles of transmission lines and 250 substations across South Dakota and Minnesota that safely and reliably deliver low-cost wholesale power to member distribution systems which, in turn, deliver power to homes and businesses in our region.
Guzman Energy is an energy broker with no infrastructure to deliver power. They buy and sell electricity on the spot energy market. In the case of one cooperative who signed up with Guzman Energy, their wholesale cost of power went up over 40 percent in four years.
East River Electric and its power supplier Basin Electric are members of the Southwest Power Pool (SPP). Basin Electric owns generation and transmission resources, and East River owns transmission and substation infrastructure in SPP which allows them to sell power on the market when prices are high and buy power on the market when prices are low. Selling generation is a hedge against wild swings in the market. It helps Basin Electric and East River Electric provide stable and affordable electric rates.
Guzman Energy owns no generation in the SPP market, and if Dakota Energy were to sign up with Guzman Energy, they would still be in SPP and would be buying in the market. Additionally, buying power through Guzman Energy would not have shielded Dakota Energy from the energy emergency that took place in our region on Feb. 16. Rather, Dakota Energy would have still been included in the energy emergency through Guzman and would have to trust Guzman to protect their interest through the extreme volatility of the energy market. East River’s members paid the same rate during the energy emergency as they paid before and after because we have long term resources to serve our load.