With a promise and a vision

Basin Electric, federal government partnership has paid off

Basin Electric Power Cooperative - March 23, 2010

Ron Harper, CEO and general manager

Dakota Gasification Company started the year off by writing a really big check - $7.1 million - to the federal government. And I've never felt better about making such a payment.

The payment was the last to be made under terms of a revenue-sharing agreement signed between Dakota Gas and the Department of Energy in 1988. Made on Dec. 31, the payment was based on 2009 revenues.

When Basin Electric formed Dakota Gas in 1988 to purchase the Synfuels Plant from the DOE, we committed to not only share revenue, but also to not take advantage of available production tax credits. Today, I'm proud to say that, including the money we returned to the DOE through the revenue sharing, the purchase price of the plant, and the tax credits we surrendered, the government has recouped $1.3 billion of its original investment in the plant.

Additionally, we have invested nearly $400 million to achieve environmental compliance, improve efficiency and develop new coproducts. We have emerged as the largest carbon capture and storage project in the world, sequestering more than 16 million tons of CO2 so far.

We've made nine payments to the DOE under the terms of the revenue-sharing agreement. Through all the fluctuations in gas prices, there were years when our payments to DOE were quite minimal. In recent years, when the price of natural gas skyrocketed, we contributed multi-million-dollar payments. Through it all, our North Dakota congressional delegation - U.S. Sens. Kent Conrad and Byron Dorgan, and U.S. Rep. Earl Pomeroy - have been staunch supporters and believers in the Synfuels Plant. Without their assistance, this plant would not be where it is today.

In 2002, I traveled to Washington, D.C., to deliver a payment to the DOE in person, as I did again in 2006. Our delegation attended, and all spoke about Basin Electric and Dakota Gas sticking to our word and honoring our commitment. I was reminded of that when we sent this final payment. With a promise and a vision for our nation's energy future, we stepped forward to take a giant risk. We made good on our promise, and our nation is stronger for having this remarkable plant in its energy mix.

But, Conrad said something else about the Synfuels Plant in 2002. He said the Synfuels Plant "sent a message" to foreign countries that the United States was serious about using ingenuity to solve an energy crisis.

Today, we're facing another energy challenge. Our nation's consumption of electricity is growing at a time when some policymakers are telling us they want us to curtail the use our most domestic, abundant source of energy - coal - because it creates too much carbon dioxide.

As we close one chapter with the DOE, we opened another one this summer when we received word Basin Electric was selected to enter into a cooperative agreement with the DOE, which could result in $100 million in assistance for our proposed Antelope Valley Station carbon capture project. This is another example of tremendous support of our congressional delegation.

Conrad's words in 2002 still hold true. This project does indeed send a message. It sends a message that we believe in coal as an important element of our energy mix, and that we believe technology solutions will create a viable path for coal. It sends a message that Basin Electric is serious about clean energy and using innovation to help get us there. After all, as I've said before, we've never been one to hit the easy button.

The partnership between the federal government and private industry has resulted in creative solutions to some of this nation's greatest challenges. Today, as we face another challenge, I believe through our strong partnership, we will get there - with a promise and a vision for this nation's energy future.