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Retirements hitting North Dakota coal industry

by Jessica Holdman

BISMARCK, N.D. _ A lucrative pension plan and 30 years on the job have Basin Electric Power Cooperative employees retiring en masse.

Facing a more competitive hiring environment, the cooperative is trying to replace the 259 employees it has lost to retirement in the last two years,including 179 who left in 2013.

The average age of the retirees has been 59 and they have had an average of 29.5 years of service, said Communications Manager Mary Miller. Basin expects those retirements to continue for the next three to five years.

“It’s an exciting time to be in the energy industry in North Dakota,” she said. “With energy growth we’re also seeing more competition. We’re in a position now we have positions to fill.”

In 2010, 82 percent of North Dakota’s net electricity generation came from North Dakota’s six coal-fired power plants, according to the U.S. Energy Information Administration.

In 2011, 15 percent of the state’s power came from wind, making North Dakota the third highest state in the nation for wind generation, and 6 percent came from hydroelectric power.

According to 2012 estimates, about 130.5 trillion Btus (British thermal units) were generated by natural gas in the state.

Those power plants that the state relies on for most of its energy started operating between 1954 and 1981. The plants that came online in the ’70s are seeing the most turnover from retirements, said Curt Pearson, media and community relations manager for Basin.

“The age of the facility, the age of workforce — it’s their time,” he said.

Basin subsidiary Dakota Gasification Co. took over the Great Plains Synfuels Plant, which turns coal into natural gas and other products, in 1988. Antelope Valley Station began operating in 1984.

“Antelope Valley came online and we hired up,” Pearson said. “We saw these retirements coming. It’s not just like we woke up one day and said ‘Oh, we have a problem.’”

The workforce at Basin’s Leland Olds Station, which opened in 1966, has already turned over. The workforce at the cooperative’s Dry Fork Station near Gillette, Wyo., is younger and just getting started because it became operational in 2011.

“Many other utilities industries are experiencing the same thing,” Pearson said. “This is not unique to Basin.”

Great River Energy has two plants in the state, including Coal Creek Station, which opened in 1979.

“We do have an experienced workforce and expect a number of people to retire in the next five to 10 years,” said Lyndon Anderson, a spokesman for Great River Energy, though the company is not expecting the big numbers Basin is.

The difference is Basin Electric’s pension plan. The plan is based on salary, years of service and interest rates. Employees can get their pension through monthly payments or a lump sum. When interest rates are lower, that lump sum is higher and many retirees are taking advantage before rates rise again.

“This is our reality,” Basin’s former Chief Executive Officer Andy Serri said at the cooperative’s annual meeting in November. “We need to take a hard look at our retirement benefits, and make sure we continue to offer employees the retirement they deserve, while still protecting Basin Electric. We must also look at how we are going to maintain the continuity of this great organization.”

Miller said there are no plans at this time to change the retirement plan. Instead, the cooperative has a succession plan.

“It’s been kind of a phased in approach,” Miller said, involving cross training of employees and internships for students and increased recruitment efforts. “We’re looking at a variety of ways to fill.”

Basin and Great River Energy are hiring new employees early to allow retiring ones to train them in. Because of significant growth in power demand, Basin has opened several natural gas-fired power stations in the Bakken and has hired employees for them as they were being constructed.

“The fact remains the workforce changing over,” Pearson said. It means years of institutional knowledge is walking out the door.

“When you look at the (hiring) competition out there, Basin is being responsive to that,” Pearson said.

In the last year, Basin conducted a compensation study of its wages and benefits, Miller said. For positions that it was lower than the market on, it offered higher wages.

Basin’s soft perks, like low interest loan programs and educational reimbursement, also are a draw, Miller said. “Smaller things make a difference,” she said.

Retirements have taken place in all of Basin’s sectors and in all the states where it operates. Some positions are easier to fill than others, Miller said.

At the power plants, the cooperative gets several applicants for each position. Anderson said Great River Energy has had the same for its open positions. In areas like information technology, though, Basin has had to cast a wider net.

Miller said some things that have helped with recruitment for power plant jobs include Bismarck State College’s power plant technology program and the cooperative’s tours program for students and teachers.

Students can come into the plants and see welders welding on different metals and pipes. Fourth- and fifth-graders can stand next to a bulldozer’s tires twice their height and might decide they want to drive it one day.

“These are good, stable jobs,” Anderson said, adding that retention is high. Great River Energy has had some employees working for more than 35 years.

“Once they start to work here they’re in for the long haul,” Anderson said.

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