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Serving Northern St. Louis County, Minnesota

GRE clean energy transition brings era of rate stability

Most Great River Energy member-owner cooperatives will see wholesale rates decrease in 2022

Marshall Helmberger
Posted 11/9/21

REGIONAL— The power supplier for most rural electric cooperatives in Minnesota, including Lake Country Power, will be reducing the price of its wholesale power as it transitions rapidly away …

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GRE clean energy transition brings era of rate stability

Most Great River Energy member-owner cooperatives will see wholesale rates decrease in 2022

Posted

REGIONAL— The power supplier for most rural electric cooperatives in Minnesota, including Lake Country Power, will be reducing the price of its wholesale power as it transitions rapidly away from coal as its primary source of energy.
Even at a time when prices are rising for many other products and sources of energy, Great River officials say they see rate stability in the foreseeable future for most of the 28 member cooperatives it serves across most of Minnesota. That includes Lake Country Power, which serves an 11,000-square-mile region with 43,000 customers.
“We spent over a decade transitioning to a portfolio of power supply and transmission resources to efficiently serve our member-owner cooperatives,” said Great River Energy CEO David Saggau. “The benefits of those decisions are now being felt. Wholesale rate stability is incredibly important to our member systems in greater Minnesota that are seeing sharp increases in other costs.”
Mark Bakk, general manager at Lake Country Power, agrees.
“With costs increasing in many areas, we welcome stability on our largest annual expense,” Bakk said.
Company officials say their stable wholesale rate projections are due in large part to changes in the way Great River Energy produces and purchases energy. The cooperative plans to eliminate coal from its owned power supply resources, more than double its use of renewable sources of power and purchase a greater portion of energy from the Midwest energy market, which increasingly relies on renewable sources of power.
According to the company, these changes put Great River Energy on track to reduce its carbon dioxide emissions by more than 80 percent by 2023, surpassing Minnesota’s statewide emissions goal more than 25 years ahead of schedule.
The company’s transition to renewable sources of power includes selling off its 1,150-megawatt Coal Creek Station in central North Dakota. At the same time, the company plans to convert its 99-megawatt Spiritwood Station from coal and natural gas to operate primarily on natural gas.
The company had planned to shut down its Coal Creek Station in 2022, due to high operating costs, but intense lobbying by the state of North Dakota eventually convinced the company to sell the facility to Rainbow Energy, a marketing company with no prior experience operating a power plant. Under the controversial deal, Great River will purchase the plant’s electricity for two years, and then will buy a much smaller percentage of the plant’s output for eight more years.
The costs of alternatives, like wind and solar, have dropped dramatically in recent years, yet because these renewable sources are variable, they can create issues with reliability during periods when the wind doesn’t blow or the sun doesn’t shine. Power producers like Great River are increasingly relying on peaking plants to provide that backup source of energy for those periods when renewable sources aren’t producing.
“Great River Energy’s peaking plants can begin feeding electricity to the grid within minutes,” according to a report provided to the Timberjay by Great River Energy. “This allows Great River to respond rapidly to market signals, which can arise from reductions in renewable energy production, increases in demand, or imbalance on the grid.”
Most of Great River’s peaking plants operate on both natural gas and fuel oil, but because they only operate about ten percent of the time, their carbon emissions are much lower than plants that run all the time.
Great River Energy is working with Form Energy, a battery storage technology developer, on a demonstration project using multi-day storage technology. If successful, the technology could allow utilities to bank variable sources of power for use during periods of lower production.
Great River’s announcement of rate reductions and forecasted price stability comes in the wake of last week’s announcement by Minnesota Power that it is seeking an 18-percent increase in its electric rates, in part due to the cost of its transition to carbon-free sources of power.
But for Great River customers, the shift is bringing multiple benefits.
“By shifting to more renewables and market energy, we are not only receiving wholesale power at a lower cost, but our membership is protected from any future regulations on carbon dioxide emissions,” noted Adam Tromblay, general manager at Nobles Cooperative Electric in southwestern Minnesota.  

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