By Ken Schlimgen
General Manager
As I write this, we have completed five of the eight scheduled district meetings. The final meeting will be held in Aurora County on June 18. I want to extend a sincere thank you to everyone who took the time to attend these important gatherings.
I also want to recognize and thank both Don Klinkner and Jeremy White for their efforts in campaigning for the open board seat representing Sanborn County. Competitive elections are a vital part of our cooperative’s democratic structure, and we appreciate both candidates’ willingness to serve. Congratulations to Jeremy White on his successful campaign. He will officially join the board following the Annual Meeting in September.
I hope the information shared at the district meetings was helpful and informative. Much of our discussion focused on the rising costs of doing business—something that has changed dramatically since we began our aging system replacement plan in 2019. Each year, we replace 50 to 60 miles of our oldest overhead lines with buried cable. We’ve consistently met this target, yet we still have approximately 1,500 miles to go.
Inflation and supply chain delays continue to negatively impact our financial position. While inflation affects everyone, the cost increases for materials like copper, aluminum, and steel have made our projects significantly more expensive. On top of that, unpredictable delivery timelines mean we must maintain larger inventories, often financed through higher-interest borrowing.
During the meetings, I also shared that 67 cents of every dollar we receive goes toward the purchase of electric energy. Looking ahead, we anticipate those energy costs will increase in 2026. If that projection holds true, a rate adjustment will be necessary.
This summer, our crews are tackling several major projects. One of the largest is the installation of electrical infrastructure for the new High Plains Processing facility south of Mitchell. The project remains on schedule, with operations expected to begin this fall. Once online, this new commercial customer will generate additional revenue to help offset future operating costs.
Another key project underway is the construction of a new service center in Howard. This initiative has been in the planning stages for quite some time, and we’re pleased to see it moving forward. Puetz Construction of Mitchell was awarded the contract, and we expect the facility to be completed by December 2025.
We also recently received encouraging news: our cooperative has been awarded a FEMA mitigation grant to replace approximately 1.6 miles of three-phase overhead line south of Chamberlain. The grant will cover about 75% of the costs. Although not originally part of our 2025 plan, we aim to complete this project by the end of the year.
In closing, I shared several key performance metrics at the district meetings, comparing Central Electric’s meters per mile, facility charges, and revenue per kilowatt-hour to those of other South Dakota cooperatives. The data confirms that our rates are about average for the state. More importantly, our ongoing investments in system upgrades have led to fewer outages and increased reliability—benefits our members are already experiencing.
Your cooperative remains committed to evaluating where and how we invest in infrastructure to ensure the best possible return on your member dollars. These decisions continue to support our mission of providing reliable energy and services with a commitment to safety and member satisfaction. Thank you again for your continued support and engagement.
Until next month, stay safe!