GRE closes 2012 on high note
By containing costs and improving efficiency, Great River Energy yielded positive financial returns in 2012. In addition to boosting the company’s bottom line, Great River Energy closed the year by returning millions to its member cooperatives.
Great River Energy’s 2012 revenues totaled more than $921 million and 2012 margins exceeded $45 million, outpacing its budgeted margin target of $40 million, according to unaudited financial results. Great River Energy will invest those margins into the organization to help fund future capital expenditures, thereby offsetting future cost increases. Throughout 2012, Great River Energy also refunded more than $5 million to its member cooperatives through a power costs adjustment.
Great River Energy’s power costs adjustment is a mechanism in wholesale power contracts that credits or debits its member distribution cooperatives based on the variable components of power costs, such as fluctuating power market prices and fuel expenses.
“In 2012, our objective was the same as it has always been: Operate and maintain world-class generation and transmission resources that provide value to our member cooperatives,” said Great River Energy President and CEO David Saggau. “However, we also empower our employees to analyze their work and seek out better, more efficient solutions — and the results are impressive.”
This challenge is one aspect of a company-wide “business improvement” program that encourages employees to discover more cost-effective ways to work. In 2012 alone Great River Energy employees recorded savings opportunities of more than $8.3 million. Since the program’s inception in 2002, it has amassed cumulative savings of $83.3 million.
In 2012, that savings represented the difference between positive and negative financial results. These financial returns occurred despite flat energy and demand sales.
“We’re a cooperative business and we’re owned by 28 cooperatives. When Great River Energy succeeds, we all share the rewards,” said Saggau.
Great River Energy is a not-for-profit cooperative which provides wholesale electric service to 28 distribution cooperatives in Minnesota and Wisconsin. Those member cooperatives distribute electricity to approximately 645,000 member consumers – or about 1.7 million people.
Headquartered in Maple Grove, Great River Energy’s Elk River operations include a power plant and a facility where garbage is processed into fuel for that power plant.