Operational Excellence

Operational excellence is about more than Basin Electric’s physical assets. It’s the cooperative’s employees, its focus on safety and a commitment to low-cost, reliable electricity. It’s about ensuring Basin Electric’s generation and transmission resources are well cared for and maintained to ensure the members receive the highest quality service.

It requires fuel supply, reliable transportation, emissions controls, well-planned and executed maintenance activities, equipment updates, full environmental and regulatory compliance, effective and consistent employee training opportunities and a strong understanding of market participation.

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

Since 2005, Basin Electric’s wind generation portfolio has grown by more than 800 megawatts complimented by as much natural gas peaking generation. Each of these resources come with different challenges with regard to operation and maintenance.

In 2000, Basin Electric’s capacity portfolio was 85 percent coal. Today, though the Dry Fork Station was added in 2011 as well as a Class A member, Corn Belt Power, the percentage of the cooperative’s coal resources is just over half its total resource capacity.

With a generation asset mix expanding, Basin Electric must continue to adapt, train and develop the best workforce possible. The focus over the last year has been in providing opportunities for employees to broaden their skills. Training that engages employees and helps them feel empowered in their jobs mean employees won’t just come to work to do a job, they’ll come to work with a deeper connection to the cooperative and its members, and a desire to find greater efficiencies and ways to improve operations.

Employees are the cooperative’s greatest assets. Basin Electric seeks to provide the most effective training and resources possible to ensure they can perform at their highest potentials.

Generation

limestone quarry

Like its employees, each of Basin Electric’s generation facilities is unique with different requirements for operation, which, in this world of one-size-fits-all regulation, can challenge their efficiencies.

The legacy units, have been in operation for 30 to 50 years and they continue to operate reliability and at very low cost. Fuel for the North Dakota units is supplied from The Coteau Properties Company Freedom Mine by Basin Electric’s subsidiary Dakota Coal Company. The baseload coal units in North Dakota and Wyoming also use lime and limestone from Dakota Coal’s subsidiary Montana Limestone Company and division Wyoming Lime Producers.

Whether it’s lignite coal for Leland Olds Station, Antelope Valley Station or Dakota Gasification Company or lime and limestone for wet and dry scrubbers at the facilities, Dakota Coal provides and ensures Basin Electric’s baseload facilities have the necessary quantity and quality of fuel and products to be among the cleanest, most reliable energy producers in the nation.

It was another successful year with regard to safety. In September, Wyoming Lime Producers achieved six years without a lost-time accident. The same month, the quarry marked one year without a lost-time accident, and, in November the Freedom Mine marked two years without a lost-time accident. In December, the fine grind plant/rail load out achieved 12 years without a lost-time accident.

Wyoming Lime, which owns the Frannie Lime Plant, a limestone processing facility near Frannie, not only excels in safety, but also production. Frannie Lime converts limestone to high-quality lime through a heat transfer process called calcination. The cooled lime is then crushed to meet customer handling requirements and loaded onto railcars or trucks for delivery to Basin Electric’s coal-based energy facilities for use in stack emission scrubbers and water treatment facilities. Lime also has other regional industrial and environmental uses.

In addition to its safety achievement, the facility broke an all-time lime production record through 2014 by safely producing 157,289 tons of lime during the year. The record of 150,832 tons was previously set in 2008.

At Montana Limestone’s fine grind plant a new pin mill was completed this year and commissioned in mid-September. The new pin mill was needed because the customer base has shifted to where the fine limestone is in higher demand. The pin mill makes the process very efficient.

Because of the high demand for product at Basin Electric’s facilities and other customers, product transportation is more important than ever.

Though the limestone, lime and coal operations have had challenges in the past with transportation, BNSF Railway has worked with the cooperative over the last year to ensure consistency in product deliveries. Subsequently, Basin Electric’s facilities were able to maintain appropriate stockpiles. Also, going into winter, BNSF offered enhanced service. Instead of running two crews, they ran three crews for a few months at no additional charge.

In addition to improvements in rail deliveries, improvements were made at the Freedom Mine. The mine’s first dragline, Sakakawea dragline, which has been running since 1983, had its boom and mast retired, and a new boom and mast lifted into place.

Beginning in April, crews worked to assemble the new boom and mast on a site developed for that purpose. On Sept. 15, the boom was lifted and pinned on the dragline. It was back in operation by the end of the month.

The mine continues reclamation activities and staff have been reviewing the Stream Protection rule proposed by the Office of Surface Mining Reclamation and Enforcement. It requires surface and underground coal mining companies to establish pre-mining surface and groundwater conditions, then return land to those conditions post-mining.

Several of Basin Electric’s baseload facilities operated at or above 100 percent of budgeted generation. That level of reliability doesn’t happen by accident. The cooperative’s triennial maintenance outage schedule ensures its facilities are provided the care and attention needed so they can run safely and efficiently without significant issues.

In addition, Basin Electric consistently maintains full environmental compliance. As the chart shows more and more of the cooperative’s operations budget is spent meeting, and in most cases exceeding, environmental compliance standards.

Work was completed in the spring for new mercury emissions removal equipment at Leland Olds, Antelope Valley and Laramie River. The equipment is being used to comply with the Environmental Protection Agency’s (EPA) Mercury & Air Toxics Standard, which requires coal-based power plants to capture and remove determined levels of mercury emissions from flue gas. They are using amended silicates and activated carbon to remove mercury. These materials are injected into the flue gas after it leaves the boiler and before it enters the scrubber. The use of amended silicates does not raise the fire risk in the baghouse the same way too much activated carbon does.

At Dry Fork Station, there was no need to install the mercury control equipment because it was installed as part of the original construction plan. Dry Fork has been in compliance with the strict standards for about a year. Leland Olds has been in compliance since April and Laramie River and Antelope Valley since June.

Another EPA rule which impacts the Leland Olds Station is the Coal Combustion Residual rule finalized in April. Due to the age, construction and proximity of its ash pond to the Missouri River, Leland Olds closed the pond in mid-October to comply with this rule. An engineering firm familiar with large scale dewatering designed a temporary system. The same firm is working on preliminary designs and estimates for a permanent system as well as requirements for the pond closure. These activities are expected to take place over the next two years.

As Basin Electric works to comply with EPA’s consistent barrage of regulations, one EPA rule stood out in 2015 placing a clear target on coal-based generation facilities. The Clean Power Plan, which is the final rule of section 111(d) of the Clean Air Act with greenhouse gas emission reduction requirements for existing coal-based facilities threatens to do more harm than good throughout the nation.

Basin Electric’s generation fleet will always be the workhorses of the cooperative, but none of it would be possible without a workforce committed to safety. In 2014, the Our Power, My Safety initiative began rolling out at all of Basin Electric’s facilities. Safety is one of the cooperative’s core values. Our Power, My Safety is a process of safety improvement over time with employees in all areas of the cooperative as the drivers.

Transmission

Whether by serving as the boots on the ground working to keep the lines safe and secure, or by serving on the planning team, members of the Transmission Department are vitally important in getting safe, secure and reliable electricity to members.

The planning team help identify what is needed, where and by when. They are actively engaged in studies and developing a strategy to meet the delivery needs of the membership.

Basin Electric is in a unique situation. It’s one of the few generation and transmission co-ops experiencing growth. Current generation and transmission projects are being built to serve all 2.9 million members.

Basin Electric has been enhancing the transmission system in North Dakota to meet members’ needs. The two transmission projects under construction include the Antelope Valley Station to Neset 345-kilovolt (kV) project and the North Killdeer Loop project. (Read more about these projects in Supporting Growth & Innovation.) Despite the decrease in oil prices and slowdown in oil activity, the transmission projects need to be done. Planning studies show they are needed no matter what. The dip in the oil activity is giving crews breathing room to get them done.

The year included intense work in regard to system regulation.

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, which is the Western Electricity Coordinating Council for its western system operations, and MRO, which is the Midwest Reliability Organization for its eastern system operations. Throughout the year, staff has been preparing for NERC compliance audits, which happen every six years. Because Basin Electric has assets in both the WECC and MRO, the cooperative has two audits. Preliminary audit results indicate Basin Electric did not have any issues with the critical infrastructure protection standards, commonly called CIP standards. Several potential violations were identified on the operations and planning side.

Basin Electric compliance staff and west-side member cooperatives will be working together with WECC enforcement staff to complete a mitigation plan to resolve the identified issues. This process typically takes one to two years to complete.

The other significant aspect about NERC standards is the implementation of a physical security standard and version 5 of the CIP standards, which goes into effect April 1, 2016. This new version of CIP standards is very significant to Basin Electric. Under the version 5 CIP standards, Basin Electric will transition from not having any critical cyber assets to having a moderate level of critical cyber assets. This is a big transition that requires a tremendous amount of cross-cooperative coordination.

Version 5 of the CIP standards will impact Basin Electric in many ways, right down to the employee level.  Certain Basin Electric employees who have access to the Bulk Electric System, or BES, will be required to successfully complete and maintain a current background check. Aside from a background check, employees will also need to have quarterly exposure to security awareness information and annual security training, specific to each employee’s role.

Physical security is another element of the CIP standards that requires Basin Electric compliance. In response, the cooperative is enhancing security to its substations. That includes fixed cameras along the perimeters of substations, as well as pan, tilt and zoom cameras that sit in corners for tracking activity within the substations. Control buildings will also receive fixed cameras, as well as door sensors, card readers and motion detectors.

The overall goal is to improve Basin Electric’s operations, planning and cybersecurity activities while promoting a strong culture of compliance.

Marketing

Southwest Power Pool go live

One of Basin Electric’s historical events of 2015 was the transition to membership in a regional transmission organization. Following many years of work and months of preparation, Basin Electric is a transmission-owning member in the Southwest Power Pool.

The actual “go live” took place at Midnight Oct. 1 and the transition went rather smoothly.

One of the key factors through all of it was the development of strong communication between the marketing group and plant operators at all facilities. In late August and early September, the plant communication process rolled out with the plant operators. As with all areas of the integration, training has been so important. The effectiveness of communication between the power plants and marketing determines the cooperative’s effectiveness in the market. It’s key.

While the cooperative is operating in a new arena, Basin Electric will always retain control of how it serves its loads and the operation of its assets. There are simply new rules in day-to-day activities in the integrated marketplace. The cooperative now has access to a broad marketplace, which allows it to capture new value for members through lower purchased power costs and new ways to capture non-member sales.

In a seemingly very short amount of time, Basin Electric has been able to get all its market operations under one roof. That includes co-locating Basin Electric’s and its subsidiary Dakota Gasification Company’s commodity marketing functions to manage the collective obligations and assets hour by hour from one central location. In 2015, the team took the steps to better integrate the marketing functions.

The commodities the cooperative produces can have significant price swings, natural gas being the most volatile of all with swings that can reach 500 percent or more. These swings in prices can lead to significant financial challenges. Dakota Gas is operating in an environment of very low energy pricing that is out of the plant’s control. It’s critical to remain very diligent with execution of its strategies over the next two years. Natural gas and oil markets are oversupplied and this will take time for the supply/demand picture to rebalance.

In this challenging atmosphere the team is finding new ways to help stabilize revenues and expenses by looking at how rail agreements and fuel surcharges are managed, how to get price certainty for ammonia sales and how to manage the pipeline capacity the cooperative owns to move Dakota Gas’ production of natural gas.

There is great diversity in the cooperative family. By collectively looking at the commodities within the whole cooperative, including subsidiaries, Basin Electric is able to manage, maximize and hedge its resources to create added value and mitigate risk.

Creating one central market location and full integration in SPP is helping Basin Electric do that. The cooperative is now able to get power where it’s needed, when it’s needed as well as help monetize excess energy.

Achieving operational excellence doesn’t happen by accident. It’s a commitment.

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Clean Power Plan

On Aug. 3, 2015, the Environmental Protection Agency released its Clean Power Plan.

On Oct. 23, 2015, the Clean Power Plan was published in the Federal Register.

On Feb. 9, 2016, the U.S. Supreme Court granted Basin Electric and several other petitioners' Motion to Stay the Clean Power Plan.

Go to the Clean Power Plan 111(d) page for our review of the plan and why it won't work for Basin Electric.

Generation portfolio

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