Manager Connection - Merger Update

Back in May, Steele-Waseca Cooperative Electric shared information with members about exploring the idea of consolidating with our neighbors at Goodhue County Co-op Electric. 

We discussed the concept of consolidating in terms of benefits and expectations. Now that a few months have passed, it seems appropriate to update the membership of the progress and expectations moving forward. 

To set the stage, let’s briefly look at what consolidation is and why the boards of each cooperative would want to consider it. 

We tend to use the terms consolidation and merger interchangeably. The outcome is essentially the same; two entities mutually agree to combine into one. In our case, there’s no exchange of funds, no buyout, no acquisition. We are simply merging two cooperatives into one larger cooperative and combining all our assets, including our number one asset—people. 

Why? The boards see the utility world evolving and much like in our everyday lives, the costs have and will continue to rise in the foreseeable future. One of our best defenses against rising costs is growth and scale. This allows us to spread costs over a greater footprint, combine skill sets and create efficiency that we simply can’t on our own. It all boils down to greater financial stability, more efficient operations, greater bargaining power, greater reliability and operational resilience, and improved ability to provide service to our members. 

Thus far we’ve had three independent consultants analyze everything from governance models, finances, facilities, employees, and contracts to the nitty-gritty of day-to-day operational practices, software systems, and fleets. We coupled that due diligence with our own internal analysis and in the end all roads led to this being beneficial to the membership of both cooperatives. 

Prior to May, both general managers attended both board meetings to create continuity and keep each cooperative informed about the other. In July, we moved to officially sharing a general manager and are already taking advantage of the economic benefit in doing so. We’ve since taken further steps to work on cooperative policies through a committee made up of directors from both cooperatives. We are working toward merged articles and bylaws as well. 

In September we kicked off work with our software vendors to create a plan to merge the systems into one. One of the advantages we have is we are both utilizing the same primary software for billing, accounting, and member facing interfaces (SmartHub for example). We are looking for ways to integrate our mapping and staking even prior to an official merger or consolidation. We can gain an economic advantage in doing so through a shared services agreement, much like we do with the shared manager. 

There’s still plenty of work to be done. In the next few months, we will finalize the joint board policies and consolidation articles and bylaws, work on a new name and logo, and continue to build our system integration plan so we’re ready to act once the consolidation is approved. 

Most importantly, we are working to have all the required materials prepared and made available to you, the members, as you will have the final say when you cast the final vote on the effort. The boards can decide to move the vote up or delay it as necessary, but the goal is to vote in conjunction with our normal annual elections in 2027 and have the results for the annual meeting in June. 

As always, we will continue to provide updates and the information you will need to make a fully informed decision as a member-owner of your cooperative. #swceTRUST