The commitments our members have made to one another and to Basin Electric, all the way from the incorporation of this generation and transmission cooperative through the renewal of the wholesale member contract in 2015, is a powerful testament to the strength of Basin Electric and its members.
Because Basin Electric’s members own the cooperative, they have a say in the decisions that are made here. Will Basin Electric build a new power plant? That’s a board decision, and the board is democratically elected from consumers at the end of the line, the people paying the electric bill. That kind of democratic process doesn’t exist in the investor-owned utility world, or in the rest of the business world in general.
Basin Electric is able to meet member needs having made decisions based on the confidence of commitments, both through contracts and through relationships. What’s good for the members of Basin Electric is good for Basin Electric. And that is where the cooperative model really shines.
The Cooperative Awareness Campaign is an effort to better understand the key challenges of the Basin Electric family. Paulsen, an external consultant, spent much of 2020 conducting interviews and focus groups with Basin Electric directors, senior staff, Class A board members, Class A managers, and their Management Advisory Committees. Paulsen was asked to identify and prioritize the challenges each group is facing, measure alignment within the cooperative family, and provide communication recommendations based on their findings.
Basin Electric’s “reason for being” was consistent throughout — affordable rates and reliability. The top 10 issues identified by all groups were: 1) maintaining rate affordability; 2) delivering reliable power; 3) resolving Dakota Gas issues; 4) development of a long-term strategic plan; 5) member communications; 6) Federal Energy Regulatory Commission (FERC); 7) transition from coal; 8) increasing the use of renewables; 9) maintaining long-term contracts; and 10) future workforce needs.
Paulsen recommended Basin Electric continue communication efforts that provide more context and consistency to create a clear and unified understanding of critical issues throughout the membership. Alignment is a unique challenge at Basin Electric due to its three-tier structure and large service area.
Basin Electric welcomed its newest member, Wyoming Municipal Power Agency (WMPA), on Feb. 1, 2021, after receiving approval from FERC. WMPA is a Class A member through District 9.
Membership was approved by both the Basin Electric and WMPA boards and at Basin Electric’s annual meeting in November 2020, when the members approved a change to the bylaws allowing an association of municipalities located outside of a district the cooperative serves on an all-requirements basis, to become a Class A member.
Additionally, two members modified their wholesale power contracts to increase their power purchases from Basin Electric over time. Crow Wing Electric, a Class A member headquartered in Brainerd, Minnesota, and Federated Rural Electric Association, a Class C member through L&O Power Cooperative, a Class A member headquartered in Rock Rapids, Iowa, both currently receive wholesale power from Basin Electric and also Great River Energy, a generation and transmission cooperative headquartered in Maple Grove, Minnesota. Great River Energy announced plans to shut down its Coal Creek Station in 2022, which accounts for about 70-75% of the power supply these members receive from Great River Energy. After 2022, that portion will be supplied by Basin Electric. Over time, as Great River Energy retires its assets and its agreements terminate, these members will eventually purchase 100% of their power supply from Basin Electric. The Federal Energy Regulatory Commission is set to approve the revised contracts in 2021.
Basin Electric became subject to FERC rules and regulations Nov. 1, 2019, due to the growth of member-owner systems.
The process of submitting filings and getting approval is ongoing. Certain filings received FERC approval, and settlement discussions continue related to others. Basin Electric anticipates successful resolution of all outstanding items.
Regional transmission organizations
After becoming a market participant in the Midcontinent Independent System Operator (MISO) regional transmission organization in 2007 and then fully joining the Southwest Power Pool (SPP) in 2015, the cooperative took another step forward to ensure its members receive the power they need at the lowest possible cost.
On Feb. 1, 2021, Basin Electric, along with Class A member Tri-State Generation and Transmission Association, the Western Area Power Administration (WAPA), and two other participating utilities, went live with SPP’s Western Energy Imbalance Service (WEIS) market. WEIS is a real-time market that takes advantage of a diverse mix of generating resources to optimize the use of the western interconnection transmission system while minimizing overall costs for the participants’ end-use customers.
The real-time balancing market is expected to lower wholesale electricity costs, increase price transparency, and mitigate congestion on the transmission system for market participants.
As the WEIS market’s administrator, SPP supports the participants’ efforts to bolster the reliability of the region’s transmission system and meets demand with the most cost-effective generation available, thereby reducing the participants’ wholesale electricity costs. Like SPP’s existing markets, WEIS provides price transparency to wholesale energy, allowing parties to trade bilaterally and hedge against costly transmission congestion.
Our hope is that the launch of WEIS can lead to a full-fledged regional transmission organization.
SPP has received letters from five western utilities, including Basin Electric, Tri-State G&T, and WAPA, committing to evaluate membership in such a market.
A recent SPP study found that a full-fledged regional transmission organization in the western interconnection could be beneficial to its members, compared to current operations. Additionally, SPP anticipates its wholesale electricity market, resource adequacy program, and other regionalized services could help western members reinforce system reliability, leverage new opportunities to buy, sell, and trade power, and achieve renewable-
Record in wind
SPP holds the record for the highest one-hour and point-in-time wind penetration ever recorded by the Energy Information Administration. It set a wind peak record of 20,108 megawatts on Feb. 4, 2021, and was the first U.S. regional transmission organization to see wind as its main fuel source in 2020.
Benefits to the west
"The startup of the energy imbalance market by SPP in the western interconnection is exciting. Coupled with SPP’s proven stakeholder process, success in operating markets and providing reliability coordination services gives us the reliability and economics in the near term and for the longer term. It also provides a realistic pathway to a full RTO in the western interconnection."
Paul Sukut, Basin Electric CEO and general manager
One project at a time, and with the Aging Substation Infrastructure Replacement
Initiative serving as the guide, Basin Electric is ensuring reliability into the future for
The cooperative’s infrastructure spreads out across its service territory throughout nine states. Most of the infrastructure was installed between the 1960s and 1980s.
In 2018, Basin Electric’s engineering departments started developing a strategy to prioritize replacing the cooperative’s aging substation equipment. The initiative was unveiled in October 2018 as the cooperative’s approach to strengthen and modernize its infrastructure. The initiative was based off several evaluations that involved input from multiple departments.
In addition to evaluating equipment age and test data, transmission system maintenance staff also looked at the availability of manufacturers who can support the aging substation equipment.
Transmission system maintenance and engineering staff review the initiative each year to determine if priorties need to shift, or some equipment replacement schedules need to be moved sooner or later, depending on a number of factors.
The initiative is scheduled to span several years, with all projects anticipated to be complete by 2025.