Operational Excellence

Basin Electric’s focus on excellence is exemplified in its safety and operational milestones. Milestones are achieved each year because employees are focused on continuously improving in all areas of operation, with safety at top of mind. Providing employees with the tools and training helps to ensure they focus on doing things right.

Generation

Antelope Valley Station
Employees and contractors worked through a 10-week maintenance outage at the Antelope Valley Station in the spring.

The entire cooperative fleet consists of four baseload coal-fired power plants, one intermediate natural gas combined-cycle, several peaking power plants that run on natural gas and oil, and wind generation.

Each resource has intrinsically unique operational requirements and challenges, and the baseload units fueled by coal have been the object of significant scrutiny in recent years. Even so, the facilities consistently operate within 100 percent environmental compliance.
There is no question coal is a reliable and inexpensive fuel, and Basin Electric remains committed to the Dakota Coal Company coal operations as well as the operations that support the cooperative’s baseload coal fleet, including Montana Limestone Company and Wyoming Lime Producers.

Supplying Dakota Coal is The Coteau Properties Company’s Freedom Mine, which provides coal to Leland Olds Station, Antelope Valley Station, and the Great Plains Synfuels Plant. The team at Coteau works to ensure the lowest possible cost fuel to the cooperative’s facilities. In 2016, the mine’s efforts to keep costs down included an innovative dragline maintenance project the team developed, which saved millions of dollars in repair costs and time.

This year Wyoming Lime Producers, a division of Dakota Coal, was able to extend the partnership it has with the operator Pete Lien & Sons another 10 years. In August, Wyoming Lime reached 3 million tons of lime produced. The lime facility and Montana Limestone

Company quarry both achieved safety milestones during the year.

Optimizing coal facilities

Coal, lime, and limestone are vital to the reliability of Basin Electric’s baseload resources. During the year, several of the baseload units operated close to 95 percent availability. Basin Electric’s triennial maintenance outage schedule ensures these facilities are maintained to run safely and efficiently while keeping the cost of these outages as low as possible.

Every baseload facility except Leland Olds Station had an outage during the year. In addition, several projects were under way or completed at each of the facilities.

At Antelope Valley Station, Unit 2 had a 10-week maintenance outage in the spring. Some of the work included installing a separated over-fire air system; low NOx (nitrogen oxides) burners; and switching the startup fuel from fuel oil to natural gas. Crews also completed installation of mercury control technology as well as adding six new monitoring wells to comply with the Coal Combustion Residuals Rule. In June, Unit 2 turned 30 years old.

At Leland Olds Station, the facility opened the year celebrating 50 years in operation on Jan. 10. Some of the work completed at the facility included commissioning of the SNCR (selective non-catalytic reduction) technology for regional haze compliance and the temporary bottom ash dewatering project. A permanent solution is under construction. Employees at the facility achieved 3 million man-hours without a lost-time accident.

The Laramie River Station units are running well. Unit 2 had a six-week maintenance outage, which included change out of the air heater baskets. The Coal Focus Team worked to improve the safety and operation of the coal handling system, and crews began construction on the SCR (selective catalytic reduction) system for Unit 1.

Dry Fork Station also had an outage in March and April, the plant’s first major outage since beginning operation in 2011. In addition to a number of electrical and instrumentation projects, flash tank modifications were completed and crews installed a permanent retractable maintenance deck in the boiler. They also installed the guillotine damper for the Wyoming Integrated Test Center.

Diverse resource mix

As the cooperative worked to help create a path forward for these and other coal resources, it also worked to diversify its generation fleet by adding hundreds of megawatts of wind and natural gas generation. The development of these resources was simultaneous because of the intermittency of wind and the need to supplement that using a more stable fuel source, natural gas, that has the ability to start up quickly. The distributed generation fleet will include more than 2,500 megawatts (MW) of wind and peaking resources during the first quarter of 2017.

Within the distributed generation operations, Deer Creek Station ran more than expected during the year and, due to the number of run hours on the gas turbine of the combine cycle, a major outage and inspection was undertaken. Work to enclose the HRSG (heat recovery system generator) continued during the year to increase reliability.

The cooperative’s peaking facilities operated well during the year and exceeded the budgeted megawatt hours of operation, in part because of low natural gas prices. Basin Electric’s Lonesome Creek Unit 2 ran for 45 days straight in July and August.

PrairieWinds subsidiaries’ wind resources also operated well and experienced about 97 percent availability. Crews completed blade repairs and preventative maintenance during the year.

Transmission

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Basin Electric has assets in two NERC regions: Western Electricity Coordinating Council for western system operations, and Midwest Reliability Organization for eastern system operations.

Basin Electric’s transmission team works to provide safe, secure, and reliable power to the co-op members, no matter the weather or time of day.

Twice a year, linemen participate in live line training. Spring training is conducted on wood poles, and fall training on steel towers. The training focuses on safety exercises, like self-rescue, cart-rescue and tower rescue of an incapacitated co-worker.

In addition to updates and repairs, Transmission System Maintenance crews tackled several projects during the year.

At the Antelope Valley Station 345-kilovolt (kV) switchyard substation, they installed new protective relaying and control equipment for the Antelope Valley to Charlie Creek 345-kV line. The new equipment is also being installed at the Charlie Creek substation.

The transmission team also supported the cooperative’s transmission system build-out by commissioning and placing into service Roundup, Patent Gate, and Kummer Ridge 345/115 kV substations.

The telecommunication staff completed the installation of new microwave radios and associated equipment at 61 sites in North Dakota and South Dakota in the spring.

Though member growth has slowed, the transmission planning team was still actively engaged in studies and strategy development. The slowdown in growth allowed time to complete needed transmission projects in western North Dakota.

Grid reliability and regulations

Adhering to transmission grid regulations and ensuring reliability, the North American Electrical Reliability Corporation (NERC) sets and enforces standards that address the reliable operation of the electric grid on two fronts: operations and planning, and cyber and physical security.

Basin Electric has assets in two NERC regions: WECC (Western Electricity Coordinating Council) for western system operations, and MRO (Midwest Reliability Organization) for eastern system operations.

The MRO region conducts quarterly guided self-certifications. The WECC region performs the traditional six-year audit, with Basin Electric’s last audit occurring in 2015. By the end of 2016, Basin Electric compliance staff and west-side member cooperatives completed the mitigation plan for the issues identified in the 2015 WECC audit.

Starting in 2017, Basin Electric and member cooperatives will implement a new NERC Compliance Program designed to clarify the roles and responsibilities assigned to Basin Electric and member co-ops for the identified member-owned Bulk Electric System (BES) facilities and equipment.

Additionally, Version 5 of the NERC critical infrastructure protection (CIP) standards went into effect July 1. It applies to securing cyber assets that support the BES. Version 5 of the CIP standards impact Basin Electric in many ways. Physical security is another element of CIP standards Basin Electric must comply with and at the beginning of the year staff enhanced security at substations identified as medium impact.

Regional transmission participation

In 2016, Basin Electric completed its first full year of operation in the Southwest Power Pool (SPP) regional transmission organization (RTO). As a member of SPP, Basin Electric operates its system on a broader basis and now recovers eastern interconnection transmission costs through SPP, which is regulated by the Federal Energy Regulatory Commission (FERC).

Basin Electric engaged in the process in May 2015, filing a formulary rate to recover transmission costs effective Oct. 1, 2015. The filing prompted some SPP parties to intervene and protest. In October 2016, a settlement was reached with the intervening parties. The settlement means Basin Electric receives an annual revenue requirement for transmission cost reimbursement that’s about the same as the cooperative initially filed.

After a full year of membership in SPP, staff is confident Basin Electric’s membership made the right decision in joining the RTO for its east-side operations.

For its west-side operations, over the last two years, Basin Electric and a number of neighboring utilities, including Class A member Tri-State and Western Area Power Administration, have been exploring similar RTO options to improve efficiencies and derive value on behalf of the membership. The group is called Mountain West Transmission Group. Additional work to explore potential west-side RTO participation will be ongoing through 2017 and beyond.

Markets

The establishment of a west-side RTO presence certainly poses challenges, but the benefits have the potentional to outweigh them. For example, as wind and other renewable energy sources continue to expand generation, the RTO ensures the loads can benefit from generation additions while minimizing the impact of transmission and congestion.

Regarding Basin Electric’s membership in SPP, the generation facilities responded very well to the dispatch signals from the market, and the market itself performed as expected.

The cooperative is capturing positive financial benefit from being a member of SPP versus being outside the market – even in a commodity down cycle paired with a long period of mild weather. While national natural gas production and inventories remained high, loads were below average due to the mild temperatures.

Wind energy in the market

Additionally, SPP added a lot of wind generation. During late winter/early spring, with loads down, at one point wind generation accounted for 49.5 percent of SPP’s energy resources in the market.

Given the amount of must-run coal baseload generation and the gas peaking generation running to regulate the wind generation, a glut of energy saturated the market, so prices became very soft, resulting in lower values for the cooperative’s generation in the marketplace. Likewise, it resulted in lower replacement or purchased power cost for loads. As Basin Electric migrated through the low-price environment, units responded appropriately by backing down so Basin Electric’s members could realize fuel savings and lower purchased power costs.

The cooperative’s mine-mouth coal plants have a distinct advantage over other coal plants in the country that pay very high coal transportation costs. This benefit will continue to help the plants experience high capacity factors well into the future.

Peaking resources

Basin Electric’s gas peaking plants offer a unique benefit. Initially, they were added for reliability within growing load pockets, and with the new 345-kV transmission line, capacity factors were expected to drop. The ability to get inexpensive gas in the north made those peaking resources economical in the marketplace.

The cooperative continues to monitor all its offers in the marketplace, as well as restructuring them to ensure Basin Electric is capturing sufficient margins from the market to operate the generating units.

To do that, the cooperative runs models for load and wind forecasting; price forecasting to help the day-ahead and real-time traders; congestion forecasting; performance for hedging; scheduling; and load management, working directly with the membership to manage load in the most efficient way possible.

During the year, Basin Electric also took a fresh look at its load management program as one of a number of continuous improvement options to add more value to the membership.

Dakota Gas commodities

As a commodity production organization and with depressed prices across commodity markets throughout the year, staff remained focused on finding new ways to help stabilize revenue and expenses. They looked at management of rail agreements and fuel surcharges, achieving price certainty for ammonia sales and managing the pipeline capacity the cooperative owns to move natural gas produced by Dakota Gas.

The unique operating structure of the Synfuels Plant affords Dakota Gas some flexibility to choose the most cost-effective product to produce at any given time. In the spring, ammonia sales were strong, and were within the top three years in terms of overall ammonia with more than 100,000 tons sold. Staff was able to work around operational challenges to ensure product was available.

Dakota Gas commodity staff meets daily to determine the day-ahead commodity values and production levels. The information allows them to adjust the production plan.

A significant project in 2016 involved continuous improvement, specifically relating to transportation. From pipelines to trucks and trains, employees strive to choose the most cost-effective transportation option. A cross-departmental team reviewed ideas and identified several savings opportunities that Basin Electric and Dakota Gas will continue to benefit from in the future.

The group’s efforts to bring more value to Dakota Gas through new customers continued by adding new tar oil and natural gas customers.

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Generation portfolio

View Basin Electric's generation portfolio on the At a Glance page.

Re-imagine CO2

Basin Electric and the Wyoming Municipal Power Agency finalized a lease and operating agreement with the Wyoming Integrated Test Center (ITC) to facilitate the next generation of clean carbon technology. The agreement allows the ITC to be built and operated at the Dry Fork Station.

The ITC will use 20 MW of actual coal-based flue gas from the facility. Along with testing capture technologies, additional research will use flue gas and turn it into a marketable commodity. Pre-construction engineering and design work started in 2015, and some equipment installation took place during the facility’s outage in 2016.

As Wyoming Gov. Matt Mead says, he “can’t wait to see what great minds come up with to re-imagine CO2. The innovations will be breathtaking and make a profound difference in the future of coal.”

In July, a total of 47 entries from seven countries applied to contend for the $20 million NRG COSIA Carbon XPRIZE. An advisory board of nine leading experts in the fields of chemical and biological engineering, energy and sustainability, and public policy, are advising the Carbon XPRIZE. The board narrowed the field of contenders to 15 teams and, in early 2017, the final five teams will be selected. Each of the five teams will be awarded a $2.5 million prize and after a two-year test period, the board will award the winner a $7.5 million prize.

In addition, Basin Electric is reviewing potential technology providers to use the large test center to evaluate clean coal alternatives using between five and 18 MW of flue gas at Dry Fork Station. That organization will be chosen in 2017.

The ITC is slated to be the second in the United States, and will be one of the few research and testing facilities at an operating coal-based power plant. It’s scheduled to be complete in the summer of 2017.