Basin Electric’s ability to adapt has proven itself over its 60-year history. From engineering the combustion of lignite coal for electricity in the early years, to finding ways to stabilize rates in the 1980s, to adding more than 2,500 megawatts of increasingly diverse capability to our portfolio in just over a decade, Basin Electric has provided all the energy our members need, and the capacity required as the membership grows as well.

The ability to navigate will continue to be an asset as the cooperative faces an increasingly complex world in which the pace of technological change is ever-quickening and volatility is increasing.

Navigation and Mitigation of an Evolving Grid

There has been a significant increase in renewable generation over the last five years in the Southwest Power Pool (SPP). Since Basin Electric joined in 2015, wind generation has doubled and then some in that market to more than 30,000 megawatts of wind generating capability. Renewable penetration has grown in the Midcontinent ISO (MISO) market and in the western markets as well.

In addition to the renewables on the grid, natural gas prices are rising as well. On days in which wind generation is high, lower or negative prices in the market occur. Then, when wind generation decreases and gas units are ramped up, prices are much higher in the energy market. Wind power is a fuel displacer for dispatchable generation, such as coal-, natural gas-, and fuel oil-based power plants. The markets have worked to adapt to the different generation mixes, and market rules have been adjusted to ensure grid reliability.

When there are different types of generation across the cooperative service area, it creates different market dynamics. Because of Basin Electric’s widespread membership, the cooperative is also able to achieve widespread generation that allows us to participate in multiple market areas including the MISO market on the Eastern Interconnect, and in the SPP market, in the western bilateral markets, and the Western Energy Imbalance Service (WEIS) market. This multiple market participation, along with ownership of firm rights on the DC ties, allows Basin Electric the ability to serve loads with lower cost resources from different markets at different times.

You can read more about the weather event in February 2021 that caused extremely high prices across SPP and MISO. For an extreme event like that one, the exposure can be significant. Basin Electric’s owned and operated generation facilities and power purchase agreement generation were able to hedge, or mitigate, a majority of that exposure.

Bonus of Depth and Breadth

The cooperative’s scale and diversity has proven helpful in another way: mitigation of supply chain delays. The cooperative has warehouses at several facilities throughout its footprint and also maintains material purchasing agreements with outside vendors.

The Procurement division’s focus on efficiency and coordination means facilities are able to share parts and knowledge about vendors to help make sure the cooperative is getting the best value for members. Purchases are made mainly through the division and not by singular employees, meaning inventories are standardized and purchasers are able to buy at a better rate.

These changes have come about largely through work done by the Process Assessment Team, a group of cross-functional employees formed in 2018, tasked to perform a detailed review of all areas of the cooperative. The team’s mission is to provide strategic decision-making justification and recommendations, provide process improvement suggestions, and provide feedback on special team assignments to the CEO and general manager.

Strategic contracting is taking place for outages which puts more responsibility on the contractors as they bid the project. Also, contractors are brought in only when work is defined rather than being stationed on site to work as needed.

Adding Flexibility to Serve a Growing Membership

Basin Electric announced in September a partnership with Dairyland Power Cooperative of La Crosse, Wisconsin, and ALLETE, of Duluth, Minnesota, to develop new natural gas-based generation.

Nemadji Trail Energy Center, a proposed 600-megawatt combined cycle power plant, will be located near Superior, Wisconsin, and interconnect into MISO Zone 1. Basin Electric will own 30% of the project through its subsidiary Nemadji River Generation LLC. The subsidiary purchased an ownership stake from ALLETE.

The partnership will give Basin Electric 180 MW of economical, dispatchable generation. Nemadji Trail will provide a hedge against the cost of serving load in MISO, and will diversify the cooperative’s energy and capacity in MISO. Nemadji Trail is a cost-effective, timely option for serving members with reliable electricity and will help in the transition of additional renewables into the grid.

Nemadji Trail will also help Basin Electric move toward more diversification within MISO. Currently more than 75% of the energy Basin Electric serves to its members in MISO is through the market. The long-term strategy to diversify with more dispatchable and renewable resources will maintain reliable, affordable power for the membership.

Additionally, Basin Electric signed a contract to add more solar energy to the resource portfolio, a result of the cooperative’s continuing goal of providing a diverse mix of cost-effective energy for its members. Custer Solar, a 20-megawatt solar project to be located in Yellowstone County, Montana, was approved in April, and the contract was signed with Energy of Utah, a solar developer, in June. The project is set to be operational in late 2023 or early 2024. With the addition of this contract, Basin Electric has plans to bring on more than 300 megawatts of solar capability through 2025.

On Oct. 18, Lonesome Creek Station Unit 6 went commercial with an additional 45 MW of dispatchable natural gas-based generation, located near Watford City, North Dakota. Unit 6 is adjacent to the first five units at the site, bringing the plant’s total generation capacity to 270 MW.

Ability to Adapt for Members

Basin Electric’s role with some members located in the MISO region is changing. Some members of Basin Electric receive a portion of their power supply needs from another generation and transmission cooperative in the region. As the other cooperative retires assets and agreements are terminated, these members will have more of their power supply fulfilled by Basin Electric.

Basin Electric also welcomed a new member on Feb. 1, 2021, Wyoming Municipal Power Agency (WMPA), after receiving approval from the Federal Energy Regulatory Commission. WMPA is a Class A member through District 9.