2008 budget

By Greg Miller, President & CEO

The Dakota Electric Association board of directors recently approved the 2008 budget and work plan. Senior management made presentations and answered numerous questions as the budget was thoroughly discussed at the December board meeting.

Here are some highlights:

• 1.9 billion kilowatt-hour sales will generate $155 million in revenue.
• Total distribution expenses are up only 1.4 percent. There will be no rate increase from Dakota Electric for distribution services again in 2008.
• Wholesale power costs will increase an average of 9 percent and be passed through to members each month in the Resource and Tax Adjustment (RTA) charge.
• The construction and maintenance budget for lines, equipment and substations totals nearly $13 million.
• Subsidiaries are projected to generate more than $500,000.
• The housing market slump will slow growth to 1,000 new members in 2008, compared to more than 2,600 new members in 2004.

As we develop our budget each year, we look at a variety of metrics to analyze Dakota Electric's financial health. While our finances are good, key indicators are pointing toward the need to file a rate case, possibly as soon as 2009 or 2010. We filed our last rate case in 2003 and continue to increase efficiencies and best practices to minimize the anticipated rate increase.

In 2007, Dakota Electric Association delivered competitive rates, exceptional reliability, customer satisfaction scores higher than national averages, enhanced environmental and energy conservation commitment and the best safety record in Dakota Electric's history. Following this great year, we expect continued success in 2008.

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