We are tripping over the quickstep

It's the tough questions that require time, intensity and participation

Basin Electric Power Cooperative - September 16, 2010

I've received a lot of comments on the last issue of Basin Today - particularly the story, "The EPA quickstep." While the red high heels caught the attention of many, the story hit home with most in our industry.

This issue features a sequel to "The EPA quickstep." While I wish it presented a better picture for our membership, I'm afraid that isn't so. This issue focuses on a range of EPA rulemakings that have tremendous implications for our members. The article details another potential rule for hazardous air pollutants, which, as drafted, could make it challenging for Dakota Gas to technically achieve new standards and also impact the operation of our electric generation units. EPA's new hazardous air pollution rule affecting small diesel generation will impact distribution cooperatives what have relied on those generators in emergencies and periods of high demand. The EPA is also evaluating the prohibition of once-through cooling water systems, which would do away with our Leland Olds Station's current water intake structure. While this rule has not been established yet, the EPA is surveying the public on this matter, and if it goes against us, could cost up to $100 million to make the switch to a cooling tower system. Lastly, you'll read about another potential impact of the new sulfur dioxide National Ambient Air Quality Standard.

Currently, EPA is proposing to use modeling rather than monitoring as the primary means for determining compliance with new standard. If that happens, all our North Dakota areas could be in non-attainment. These are just some of the issues outlined in the sequel to "The EPA quickstep."

It seems to me that our elected officials continue to use the word "balanced" when referring to their desire for a national energy policy. But, what I see is a disconnect between discussion of a "balanced" energy policy and the push by many to create legislation and regulations that essentially single out one significant, domestic energy source: coal.

In the past several years, Basin Electric has made great strides in diversifying our energy portfolio. By year-end 2011, we'll have more than 780 megawatts of wind and green generation in our mix. This will be added to our new natural gas generation, which will total 731 megawatts by year-end 2012. All of this has rounded out a solid energy portfolio, one that is still rooted in coal.

Why have we done this? Because we believe that to have an effective generation strategy - one that reduces our overall carbon footprint - you need a mix of everything: hydro, coal, nuclear, wind, gas, and conservation/efficiency. We have long supported the EPRI model*, which reveals the potential for significant reduction in CO2 from the electric sector. This model is realistic, achievable and balanced.

This model still includes coal - with carbon capture technology. This speaks to the need for technology advancements as well. Basin Electric has long been advocating for time to develop technology and a multi-pronged response to carbon reduction.

If you think about it, our promotion of a balanced approach started years ago as we embarked on our construction program. This summer we've been busy dedicating those facilities - two wind and one natural gas project. Most recently, we've broken ground on our Deer Creek Station. I am proud of our people who are out in the field laying the groundwork and constructing these impressive projects. And, I'm pleased that, despite our uncertainty over what lies ahead, we're still responding to our members' power needs and building facilities!

The EPA article definitely raises a number of difficult questions. For example, what is the future for coal in this nation? And, if others succeed in their anti-coal agenda, what will replace the country's 337,300 megawatts of coal generation, and how? What will happen to our existing facilities? What will it cost to shut them down?

At the February strategic planning session, I asked what will be the fuel that produces that kilowatt-hour 15 to 20 years from now? If it's coal, what do we need to be doing today to make certain we have that ability? If it's not coal, what are we doing with our existing facilities today to prepare for that future?

These are issues Basin Electric and the membership need to diligently apply our knowledge and will toward solving. In addition to our ongoing legislative efforts, I've established a cooperative-wide Environmental SWOT Team to evaluate and monitor existing, new and proposed EPA rules and what they mean for Basin Electric.

Folks, I know these are not questions we'd like to even ponder. Unfortunately, we are faced with a situation where we must. I promise to keep you informed, and as I asked in my previous column, please engage in this dialogue. Provide comments to EPA. We must make our voices known - and the louder the better.