Sustainability Reporting

2019 Sustainability Report

This is Otter Tail Power Company’s eighth Sustainability Report. In 2019, we moved from a biennial text Sustainability Report to an annual web-based Sustainability Report. We selected this year's content based on the environmental, economic, community, and other standard disclosures outlined in the Global Reporting Initiative (GRI) Standards reporting guidelines. We comply with the GRI Standards at the core level. The GRI guidelines provide a voluntary reporting framework used worldwide to communicate meaningful information about issues that impact reporting organizations and their stakeholders.

We’re reporting 2019 information throughout this report unless we indicate otherwise due to data availability. Our GRI Index shows what we reported relative to the guidelines. In some cases, our GRI Index links to Otter Tail Corporation documents. These documents may or may not specifically cite Otter Tail Power Company information, which is the overall scope and boundary of this report’s content. Otter Tail Power Company retained Silver Birch Communications LLC to provide a third-party check of the content and its accordance with the GRI Standards at the "Core" level. We published our last report in 2018 using 2017 information.

For questions about the report contact Otter Tail Power Company Public Relations Specialist Kaiya Johnson at communications@otpco.com.

Materiality Assessment

We conducted a materiality assessment in 2018 to learn what our stakeholders view as important in environmental, social, and governance areas and in our long-term sustainability. This is our second materiality assessment, and it helped us define the contents of this report. In 2018 we gathered feedback from stakeholders in Minnesota, North Dakota, and South Dakota.

Who we engaged

As a public electric utility, we’re required to regularly engage with our stakeholders and solicit feedback. We also proactively reach out to our stakeholders to ensure they’re satisfied with our service. For the materiality assessment, we engaged stakeholders to identify the issues of most significance to them. 

Stakeholder Engagement

We collected feedback at public meetings and public input hearings. And we reviewed complaints from our toll-free customer service phone line. We also used online and social media comments to gather feedback.

We solicited feedback on specific projects. For our hydro-relicensing project, approximately 30 representatives from eleven entities, including the Federal Energy Regulatory Commission and the Minnesota Department of Natural Resources, participated in a public meeting. For our request to review rates in North Dakota, a combined five customers attended two public input sessions. For our request to build Astoria Station, a natural gas-fired electricity-generating facility in South Dakota, approximately 40 people attended a December 2017 public input hearing.

We surveyed our customers for satisfaction using the independent vendor J.D. Power. Key metrics included power quality and reliability, billing and payment, price, corporate citizenship, communications, and customer service. The organization surveyed approximately 300 residential customers.

We engaged Bellomy Research, Inc., to evaluate transaction-specific customer satisfaction and issue resolution. The survey targeted all customer contacts—phone, web, mail, and after-hours calls—and measured specific aspects of service provided. The organization surveyed 3,000 customers.

We held several employee events to share information about our company’s performance and goals and encouraged employees to ask questions and voice concerns aloud or anonymously on paper. Events included, but were not limited to, Annual Strategy Forums, during which senior management reached all employees; Customer Care Conferences, during which customer service leadership reached almost all of our approximately 30 customer service representatives and administrative support staff; and Managers’ Meetings, during which subject matter experts reached almost all of our approximately 50 managers. Otter Tail Corporation, our parent organization, offers an anonymous ethics hotline for all employees.

Almost 50% of our registered shareholders live in Minnesota, North Dakota, or South Dakota. Many shareholders also are Otter Tail Power Company customers, allowing us to gather their feedback as both customers and shareholders. We also have strong participation at our annual shareholder meetings that are represented on average, by proxy or in person, by more than 80% of the corporation’s total outstanding shares.

We continued to work with regulatory agencies on the local, state, and federal levels. Through agency and public meetings, our unified efforts helped to implement procedures that were transparent and encouraged participation from interested parties.

Otter Tail Power Company has a Legislative Affairs team that works in each of the states we serve. The team reached out to elected officials to share information about topics and pending legislation related to electric power generation and delivery.

Our Resource Plan identifies the most cost-effective combination of resources for meeting our customers’ needs for reliable service during the next 15 years. We met with stakeholder groups to review our progress and plans.

What We Learned

Per GRI’s guidance, we identified material topics based on the two dimensions of the materiality principle: first, the significance of the organization’s economic, environmental, and social impacts and, second, their substantive influence on the assessments and decisions of stakeholders.

Our Sustainability Report Team reviewed stakeholder feedback documents and created an initial list of issues. We deemed issues material when identified in three or more stakeholder groups. We then shared the issues with relevant internal subject-matter experts and with senior management to secure final approval. While stakeholders raised other topics of interest, below are the topics with trending feedback.

  1. Reliability. New technology can help us more quickly locate, inform customers about, and restore electrical outages. Teams are working on this as part of our long-term technology and infrastructure strategy.
  2. Customer satisfaction. To keep pace with evolving customer expectations, in early 2019 we installed a new Customer Information System that allows customers more access and options related to their energy use and our services.
  3. Generation resources. Industry trends show growing interest in electricity generation and environmental impacts. Because this is a topic of great interest, we dedicated a section of this report to it.
  4. Cost. In 2019, the South Dakota Public Utilities Commission approved an increase in rates, in part to recover costs associated with our investments in new technologies and infrastructure.
  5. Energy efficiency. We educate customers about energy efficiency, because the less energy our customers use, the more money they save, and the longer we can delay adding more generation resources.
  6. Community engagement. We’re an important part of the communities we serve. Our employees serve on city councils, fire departments, school boards, or in other prominent community roles. Our charitable contributions support young minds, create vibrant culture and vital communities, improve health and human services, and protect our natural resources.
  7. Workforce investments. We work with area institutions of higher learning on career paths and recruiting to ensure we have a ready workforce. We also provide training and continuing education opportunities for existing employees to build bench strength.

When defining key topics to include in this report, we also reviewed material issues presented specifically for electric utilities by GRI’s Sector Guidance, the Edison Electric Institute, and the Sustainability Accounting Standards Board.

EEI ESG/Sustainability Report

Environmental, Social, Governance, & Sustainability Report

As a member of the Edison Electric Institute, we've joined with member companies to provide environmental, social, governance, and sustainability information that provides investors and others additional insight into our commitments to sustainability. The reports below are based on 2019 year-end data.

Quantitative Section

Qualitative Section

   

Executive-level responsibility for economic, environmental, and social topics

Otter Tail Power Company's Chief Financial Officer is the top executive responsible for our economic impact; our Vice President, Energy Supply, oversees our environmental impact; our Director, Communications, is responsible for our social impact that includes charitable contributions; our Vice President, Customer Service, oversees our social impact that affects community relations; and our Director, Human Resources and Safety, manages the company's impact on our workforce and suppliers.

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