North Dakota’s electric cooperatives are led at the state Capitol during the legislative session by NDAREC’s Josh Kramer, far left, and Zac Smith, far right, and augmented by the grassroots advocacy of electric cooperative leaders from across the state.
“Cooperatives were born in politics and will die in politics.”
This oft-used phrase in the cooperative world both recognizes the circumstances through which most cooperatives emerge – in response to political and economic conditions, often as an alternative to traditional business models or power structures, seeking to empower individuals and communities – and acknowledges a critical function for their survival – advocacy.
“There’s government involvement at every phase of the electric delivery model. From generation to transmission to distribution, the government can affect much of what happens behind the light switch,” says Josh Kramer, executive vice president and general manager of the North Dakota Association of Rural Electric Cooperatives (NDAREC). “Our job is to make sure that light comes on for our members and at a price they can afford, so that’s why we advocate for co-ops during the legislative session and with government at all levels.”
Following an extended session marked by procedural delays, N.D. lawmakers adjourned sine die at 4 a.m. on Saturday, May 3, enacting nearly 600 bills and approving a $20.3 billion budget.
“Those last few days were grueling, but I do think we did an OK job,” says Senate Majority Leader Jerry Klein, R-Fessenden. “I know now that I can stay awake for 25-and-a-half hours.”
North Dakotans’ demands were heard this session, with more than $403 million going to resident property tax relief. But it was not without its hurdles. Originally expected to pass early in the session, House Bill (HB) 1176 was finalized on the last day of session after a conference committee met 13 times, eventually dropping a controversial “skin in the game” provision requiring taxpayers to pay at least 25% of their tax bill.
Klein hoped to deliver more tax relief for producers and the ag community, he says, but efforts failed in the end. The final bill, however, lays out legislative intent to extend property tax relief to agricultural, commercial, centrally assessed and non-primary residential property during the next legislative assembly.
Major topics for electric cooperatives this session included coal conversion tax relief, wildfire mitigation, energy policy, rural quality of life, Public Service Commission (PSC) jurisdiction and data centers.
“Several harmful policy proposals were avoided and favorable policy enhancements were achieved for electric cooperatives,” Kramer says.
TAX POLICY
NDAREC and industry advocates helped secure a compromise to extend coal conversion tax relief in HB 1279. This tax relief helps level the playing field for the N.D. lignite coal industry, which has faced pressures from the federal government and operates at a disadvantage in the energy marketplace, says Zac Smith, NDAREC government relations and communications director.
“Despite compelling testimony from electric cooperative leaders on the importance of tax relief for the coal industry and the direct impact it would have on North Dakota’s electric cooperative members, the bill was in jeopardy of failing,” Smith says.
“I think the issues were somewhat minimal for electric co-ops up to the end, with the coal conversion tax,” Klein says, noting an open dialogue and willingness to compromise helped tipped the scales in the end.
“Sometimes, it’s just being able to convey your message and talk about where you are and where they are or we are, and developing that compromise,” Klein says.
The agreement calls for a phased-in approach in which the state will collect a total of $35 million in coal conversion taxes over five years beginning in 2026. This equates to a $70 million savings for coal plants and the Dakota Gasification Company Great Plains Synfuels plant, an expense that would have ultimately been passed to ratepayers.
“Had HB 1279 failed completely, coal facilities would have seen an estimated $105 million tax increase,” Smith says.
WILDFIRE MITIGATION
The passage of Senate Bill (SB) 2339 is a lesson in grassroots advocacy. This legislation supports proactive measures to reduce the risk of wildfires, including utility wildfire mitigation plans, and enhance coordination among utilities and fire-response agencies, while not allowing courts to apply a standard of strict liability to qualified utilities in the case of wildfire-related damages.
Strict liability means a party can be held liable for damages even if they weren’t negligent or didn’t cause the harm. This standard has been used in other states to assess hundreds of millions of dollars in damages against utilities for wildfires, which could bankrupt a member-owned rural electric cooperative.
After the Senate overwhelmingly passed the bill on a 45-1 vote, it failed by one vote in the House. NDAREC worked with Rep. Emily O’Brien, R-Grand Forks, to get the bill reconsidered the next day. The bill passed 62-28 on the second vote, with 17 additional votes flipped to yes.
“Several legislators who flipped their votes received outreach from NDAREC board members and electric cooperative general managers. This grassroots effort was critical in supporting NDAREC's efforts at the Legislature,” Smith says.
“It’s very important that we actively engage in grassroots advocacy and promote the bills that are fair and reasonable and push back on the bills that are bad for North Dakota’s electric cooperatives and our members,” says Capital Electric Cooperative General Manager Paul Fitterer, who testified in support of the legislation. “This means we pay attention to potential regulations and bills that would negatively affect our member-owned, member-governed business model, increase costs, or reduce reliability or safety.”
DATA CENTERS
HB 1579 was introduced by Rep. Anna Novak, R-Hazen, in concern for grid reliability. Specifically, this bill related to the siting of large users of electricity, namely data centers. The bill as amended would have put the PSC in a position to deny or condition electrical service of a data center over 50 megawatts. Commissioner Randy Christmann was a leading proponent of the bill.
Leaders from the data center industry, investor-owned utilities and electric cooperatives voiced opposition to the bill. Commissioner Sheri Haugen-Hoffart also testified in opposition.
Smith says HB 1579 would have diluted the Territorial Integrity Act, which helps protect utility service areas and settle disputes, slowed development of large loads and infringed upon the self-governance of electric cooperatives.
Electric cooperative leaders testified to the sophisticated, significant planning processes and coordination among cooperatives and industry partners that happens before large electric loads are added to the system.
Ultimately, the opposition and testimony against the bill resulted in Novak proposing to turn it into a study, which will take place between the 2025 and 2027 legislative sessions.
THE WORK CONTINUES
Another successful outcome of the 2025 session was the passage of SB 2228, which funds a $1 million rural grocery store sustainability grant program enacted during the 2023 legislative session, spurred by the rural grocery work of NDAREC and its rural development arm.
“While the 2025 legislative session has come to a close, the interim work is only beginning,” Kramer says. “NDAREC will continue to educate, develop plans, carry through on commitments and build relationships as we work toward a positive regulatory environment and policies that help electric cooperatives power the lives of their members and the communities they serve.”
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Cally Peterson is editor of North Dakota Living. She can be reached at cpeterson@ndarec.com.
