Directors approve 2022 budgets

At their December meetings, the boards of directors approved the 2022 operating and capital budgets for Basin Electric and subsidiaries. 

Darla Jensen, Basin Electric manager of financial reporting and planning, said the 2022 operating budget includes total cost of electric service of approximately $1.93 billion. “Embedded in the cost of service is about $174 million of additional margin, which the board will take action to decide how it will be utilized,” she said.

The 2022 budgeted revenue and other income is $1.97 billion, and Jensen said member sales represents 92% of that. Basin Electric's average member rate for the 2022 budget is unchanged from 2021 at 61 mills.

“New capital projects to commence in 2022 are going to be about $206 million in project costs with cash flow estimated at $96 million. The lion’s share of that spend will go into new build of transmission at $160.4 million,” Jensen said.

The consolidated after-tax income for Basin Electric and its subsidiaries is estimated to be $76.1 million, with revenue deferral estimated at $15 million. This year’s revenue deferral will build the cooperative’s total revenue deferral to $300 million, which is the amount authorized by the board of directors.

Dakota Gasification Company

Kimberly Miller, Basin Electric senior business analyst, said the 2022 operating budget for Dakota Gas includes operating revenue of $516.4 million. “The main drivers behind the increased revenue at Dakota Gas is commodity pricing. After seeing historic low pricing for the past several years we are seeing an uptick in natural gas pricing and very strong fertilizer pricing,” Miller said. “We continue to look at expenses to make sure we get the best value for each dollar we spend.”

The budget also includes operating expenses of $409.6 million, with coal, utilities, and labor attributing greater than 60% of the total expense in 2022.

The operating income budgeted is $106.8 million. “When we add in other income, interest expense, and depreciation expense, and income tax we arrive at a net income for Dakota Gas of $35.7 million,” Miller said.

The 2022 capital budget is set at $4.7 million, which includes infrastructure, equipment, and catalyst, Miller said. Cash flows in 2022 include carryover projects from 2021 including the Dakota Carbon Pipeline and primary reformer FEED (front-end engineering and design) study, totaling $20.4 million.