BASIN ELECTRIC POWER COOPERATIVE 8-K

What Happened

• Basin Electric Power Cooperative announced on July 13, 2026 (8-K) that it entered a settlement agreement on July 9, 2026 with McKenzie Electric Cooperative, Inc., Upper Missouri G. & T. Electric Cooperative, Inc., and Mountrail-Williams Electric Cooperative to resolve certain ongoing disputes in North Dakota state court and FERC proceedings.
• Basin Electric says it expects to record a pre-tax charge of approximately $40 million related to the settlement in its consolidated financial statements for the quarter ended June 30, 2026.

Key Details

• Settlement parties: McKenzie (Class C member), Upper Missouri (Class A member), Mountrail-Williams (Class C member), and Basin Electric.
• Effective Date conditions: settlement requires satisfaction of implementation conditions including corporate and regulatory approvals and Upper Missouri securing financing under the Rural Electrification Act of 1936.
• Actions by McKenzie on Effective Date (within 10 days): file dismissals with prejudice of its North Dakota claims against Basin Electric and Upper Missouri, withdraw its FERC Section 204 complaint and withdraw interventions/appeals in FERC proceedings against Basin Electric.
• Rate-related concession: Basin Electric agreed that, effective January 1, 2031, it will not include amounts associated with Dakota Gasification Company (DGC) in wholesale power rates charged to Upper Missouri for power purchased by McKenzie, subject to certain exceptions. McKenzie will remain a Class C member of Basin Electric and stay under its wholesale power contract with Upper Missouri through the contract term (currently through 2075).

Why It Matters

• The settlement resolves significant litigation and regulatory disputes that could have affected Basin Electric’s contracts, FERC matters, and member relationships. Recording a roughly $40M pre-tax charge will directly affect Basin Electric’s reported results for Q2 2026.
• The rate concession regarding DGC could affect future wholesale rate structures between Basin Electric and Upper Missouri (and thus costs passed to McKenzie) beginning in 2031, and the agreement keeps McKenzie as a member and continuing under the current long-term contract through 2075.
• The settlement is subject to approvals and financing conditions, and Basin Electric noted risks that the agreement may not become effective or that actual costs could differ; the company may seek regulatory accounting treatment with the Rural Utilities Service later.