Basin Electric’s members count on reliable electricity to keep the lights on at home and to power their businesses and the services they need every day. Basin Electric generates and delivers electricity to 131 member cooperatives across nine states. Our generation and transmission assets are the engines of commerce for a service territory that helps feed and fuel our nation, supporting quality of life and economic opportunity for consumer-owners and industries across rural America.
Reliability is achieved and maintained at Basin Electric in a number of ways: fuel choice for generation, generation availability, proactive plans for additional resources to both generate and deliver electricity, focus on diligent maintenance, consistent communication with members regarding load growth, and a dedicated workforce that understands the priorities of the cooperative and works toward those goals in everything they do.
The Value of Diversity
Basin Electric’s generation fleet is diverse, from the fuel that turns the turbines, to the way our units are offered into the power markets, to the geographic location of our units and how that can drive value for our membership.
Our all-of-the-above energy strategy has proven successful in maintaining a reliable electric system. This strategy employs a diversified portfolio of dispatchable and non-dispatchable resources. The distinction between these resources is dispatchable resources have a readily available fuel supply to power their generation, whereas non-dispatchable resources rely on intermittent, renewable fuel and produce electricity when weather conditions are right.
The majority of our dispatchable resources — coal, natural gas, and fuel oil generation facilities — are situated in relatively close proximity to the mines, wells, and pipelines that provide their fuel. This proximity enhances reliability, lowers costs, and reduces the environmental footprint of our dispatchable resources. Our portfolio of non-dispatchable, renewable resources, currently consisting of wind facilities, has a generating capacity of more than 1,800 megawatts (MW) of electricity. Our system also benefits from access to hydroelectric power, which provided approximately 4.3% of our winter season generating capacity in 2022.
Our all-of-the-above energy strategy capitalizes on Basin Electric’s service territory being one of the best areas in the nation for wind generation. In the past decade, we have added nearly 1,200 MW of wind resources to our portfolio, and will soon add solar generation to our portfolio through a power purchase agreement with a new solar project under construction in South Dakota.
In addition to environmental benefits, the cooperative’s renewable assets, both through the wind projects Basin Electric owns and operates and the power purchase agreements we have with independent power producers, bring value in that they have a fixed fuel cost, thereby providing mitigation against volatile market prices.
Building for Reliability and Growth
Basin Electric’s 2023 member load forecast projects growth of 1.14% over the next 10 years. Basin Electric’s projected growth is driven by the residential and commercial sectors, as well as high density computing facilities, the projected emergence of agriculture-based carbon dioxide (CO2) capture and sequestration, and continued economic development in western North Dakota.
But even before the latest member load forecast was released in January 2023, the cooperative determined it needed to build new generation and transmission to be able to keep providing reliable electric service to the membership.
As a result, Basin Electric is pursuing its largest single-site electric generation project since the 1980s. The cooperative is constructing approximately 600 MW of natural gas generation near the existing Pioneer Generation Station, northwest of Williston, North Dakota.
The project is referred to as Pioneer Generation Station Phase IV (PGSIV). The project team plans to have the first simple-cycle turbine and set of reciprocating engines online by 2025 and an additional simple-cycle turbine online in 2026. The project also includes a 15-mile, 345-kilovolt (kV) transmission line expected to be in service in 2024.
Separately, Basin Electric is on track to energize nearly 350 miles of high-voltage transmission line in western North Dakota by the end of 2027. These projects, summarized above, are being constructed to address concerns with future reliability and service. The two 230-kV transmission lines that will connect with SaskPower at the Canadian border will support reliability by providing larger transfer capability between Canada and the Southwest Power Pool (SPP) system, a regional transmission organization of which Basin Electric is a member.
The cooperative also serves load, and develops plans to serve future load growth, with power purchase agreements and energy and capacity purchases. Basin Electric entered into a 200-MW power purchase agreement in December 2022 with ENGIE North America for the output of its North Bend Wind Project in Hughes and Hyde counties in South Dakota. The project is set to begin commercial operation in 2023.
In addition, the cooperative began receiving 142 MW from the Aurora Wind Project near Tioga, North Dakota, on Jan. 1, 2023.
Basin Electric’s efforts to contract for solar power have been impacted by supply chain disruptions and inflation. Fortunately, the Wild Springs Solar Project, a 128-MW facility in Pennington County, South Dakota, began construction in January 2023. Basin Electric will purchase 114 MW of the output. The project, owned and operated by National Grid Renewables, is set to begin commercial operation in 2023, and will be the largest solar project in South Dakota.
Addressing Maintenance to Ensure Reliability
Without upgrades, aging transmission infrastructure will eventually falter, affecting reliability.
To prevent this from happening, Basin Electric launched the Aging Substation Infrastructure Replacement Initiative in 2018 as the cooperative’s approach to strengthen and modernize its infrastructure and help ensure reliability for the cooperative’s members. Basin Electric is on track to complete upgrades to an additional 15 substations by 2027.
With the Engineering team leading the coordination efforts, a cross-functional team was developed to create a ranking system to help identify infrastructure most in need of equipment replacement. Ranking was based on age, test data, and the availability of manufacturers that could supply replacement substation equipment.
Major maintenance on generation units is typically completed during coordinated plant outages in the spring and fall, the times of year when demand for electricity is lower due to milder temperatures. These outages include activities such as replacement of components affected by wear and catalyst replacement for environmental control equipment.
The cooperative evaluates maintenance costs in conjunction with how they affect the competitiveness from each generation facility and how that energy is priced in the market. The cooperative’s Outage Cost Analysis Report documents the source of unplanned plant outages and tracks patterns to determine whether attention needs to be directed toward a particular element for maintenance. Costs of both maintenance and fuel are compared against the energy prices, cost of replacing that generation with energy purchased on the market, or selling surplus electricity on the market. Based upon this information, decisions can be made as to what will bring the best value to Basin Electric’s consumer-owners.
Strategically Focused Teamwork
A realigned organizational structure and emphasis on strategic planning has contributed to Basin Electric’s ability to develop guidance for employees to follow as they make decisions at work every day to provide reliable, affordable, and responsible electricity for the membership.
Basin Electric has experienced several retirements in its executive ranks. Many of the positions were filled through internal promotions, while the cooperative was able to hire a number of executives to further enhance the cooperative’s workforce. The Executive Leadership Team’s streamlined reporting structure provides a single point of accountability and responsibility for leadership regarding key risks, opportunities, and assets.
In addition to the leadership team’s new structure and diversity of experience, strategic planning with the board of directors and Executive and Senior Leadership Teams contributes to better-focused efforts throughout the cooperative.
Several times each year, the Basin Electric board and Senior Leadership Team hold strategic planning sessions to develop and monitor initiatives for Basin Electric and its subsidiaries. Efforts are focused on building upon our all-of-the-above energy strategy to further augment the value Basin Electric provides to its members.
Three cooperative-wide initiatives have been developed for the cooperative, falling in the areas of safety, reliability, and financial agility. These cooperative-wide initiatives are supported by well-defined objectives, departmental initiatives, and individual goals throughout Basin Electric.